Research analyzes how to measure performance management in the public sector
The bibliometric analysis shows that the use of the BSC in the public sector is still evolving, with a need for more long-term contextual studies.
Over the last 30 years, the Balanced Scorecard (BSC) has established itself as an essential tool for performance and strategic management. It has been widely adopted due to its flexibility and ability to align organizational strategies with measurable results. Although initially developed for private organizations, the BSC has been adapted for the public sector. However, this application has generated debate about its effectiveness in non-profit organizations, such as government and non-profit institutions.
To investigate the trajectory of the BSC in the public sector, researchers Ricardo Correa and Clóvis de Azevedo, from FGV EAESP, carried out a systematic literature review using the Web of Science database. They analyzed 2,815 articles published between 1992 and 2022, 36 of which dealt with Public Administration. The study was published in the International Journal of Public Administration. Thus, it presents two fronts: a bibliometric analysis, which identified the most influential authors, countries and journals, and a semantic analysis, which explored the application of the BSC in the public sector.
The results showed that local governments use the BSC more for performance measurement in areas such as water services, health and education. China and the United States lead academic production on the subject, with authors such as Hasan Dincer and Serhat Yuksel standing out. In addition, the analysis highlighted that the term “performance” is the most frequent in the abstracts of the articles. This reflects the focus on the BSC as a performance management tool.
Despite the usefulness of the BSC in performance management, the research pointed to challenges in its application in the public sector.
The main difference between its use in the private and public sectors lies in the missions of these organizations. While private companies seek to maximize profits, public organizations need to balance the interests of multiple stakeholders, which requires adjustments to the traditional model. Many local governments, for example, adapt the financial perspective of the BSC to prioritize the public mission.
The BSC is structured around four main dimensions that underpin organizational performance. The first is the financial dimension, with a focus on monetary results and value creation, which in the public sector is usually adapted to efficiency in the use of resources. The second is the customer dimension, which measures satisfaction and relationships with stakeholders such as citizens and patients. The third dimension assesses internal processes, focusing on operational efficiency and continuous improvement. Finally, the innovation and learning dimension deals with the development of competencies and innovation, ensuring that the organization is prepared for the future. These four dimensions provide a balanced view, integrating short- and long-term goals, as well as financial and non-financial aspects.
The research concluded that the BSC has proved useful in the strategic planning and performance management of public organizations. However, future long-term studies are needed to assess the real and sustainable impact of the BSC in these organizations, especially in contexts of greater complexity and multiple stakeholders.
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