Finding the path to organizational excellence in Portugese local government: A performance measurement approach

Abstract

Performance measurement is essential to support the quest for Organizational Excellence. To be effective, the performance measurement system must be based on the drivers of success. A literature review and previous empirical research suggest that Total Quality Management principles and core concepts are the drivers of Organizational Excellence. Moreover, because Organizational Excellence implies the simultaneous satisfaction of the various stakeholders, performance has to be measured taking into consideration their distinct views. This paper presents a new performance measurement system that is holistic, comprehensive, valid, reliable and easy to use, and reports the results of its application to the Portuguese municipalities, discussing the lessons that can be learnt from the assessment exercise. With the purpose of testing and validating the measurement system proposed, data were collected from political leaders, managers, employees and citizens. By using a performance measurement system based on the critical success factors and by measuring their relative impact on an aggregate performance measure, municipalities have a sound basis for implementing successful improvement strategies. Owing to its mathematical foundation and sound methodology, the system provides decision- makers with valuable information on where the major problems lie and how efforts can be directed towards the areas that have a greater impact on performance. The performance system proposed will thus help municipalities to find their path to Organizational Excellence.