Designing a performance measurement system to support outsourcing decisions in a Finnish university

In recent years, the role and importance of performance measurement in public organisations has been much emphasised. However, the discussion on the issue so far has been on a rather general level. This paper aims to understand the challenges faced by public organisations in developing performance measurement systems (PMSs) for a specific managerial purpose, to support outsourcing decisions. The objective of the paper is approached with a literature review and a single qualitative case study carried out as an action research. The case study introduces a detailed description of a PMS development project carried out in the support services of a Finnish university. A framework developed in prior research is utilised to analyse the impacts of two typical characteristics (conflicting stakeholder needs and undefined objectives) of public organisations in a PMS design project. The contribution of the paper is to extend the existing understanding about public sector PMS especially regarding two key points: 1) to understand the impact of different purposes for measurement (in this case the outsourcing context) on the PMS development process; 2) to understand the need to align the PMS system with the organisational culture and other managerial control systems in order to achieve desired performance outcomes.