PROJECT

PROPOSAL OF GROUP PROJECT ASSIGNMENT

THE CONSTRUCTION OF PERFORMANCE INDICATORS IN THE MALAYSIAN PUBLIC SECTOR ORGANIZATION

GROUP E

PREPARED FOR:

PREPARED BY:

GROUP 1

DATE OF SUBMISSION:

1. Introduction/ background

Performance indicators are quantitative or qualitative measures that describe the extent to which service is achieving its objectives and resources. The construction of some performance indicators in the public sector is difficult task due to not all goals are measurable. Performance indicators initially used in private sector, after that only public sector start being active in adopting approach to measure the organization. Public sector organization should be aware of the importance of constructing performance indicators. Hence, they are limitations and obstacles faced.

2. Objectives of the study

I. To describe the process of construction performance indicators for public sector organization

II. To explain the importance in constructing performance indicators for public sector organization

III. To discuss the obstacles in construction of performance indicators in Public Sector

3. Literature Review

3.1 Concept and definition of Performance Indicator in Public Sector

Government of Malaysia issued a manual called ‘guidelines for establishing performance indicators in government agencies’ in 1993 to guide agencies in implementing performance measures. (Ruzita Jusoh et al.)

3.2 The Construction of Performance Indicators

In order to measure performance of public sector’s organizations, it is crucial to apply suitable performance measurement approaches (Ingrida and Giedre, 2015). The construction of some performance indicators in the public sector is a difficult task because not all goals are measurable, so it is often resorted to benchmarking analyses. If initially the performance measurement was based on the results obtained, current theories have introduced the need to introduce inputs, process indicators used in obtaining the results and the outcomes indicators, namely the effects generated by results, creating a comprehensive performance management system. There are traditional and multidimensional model for measuring performance of public sector. Tools in multidimensional are Total Quality Management of public sector (TQM), Benchmarking and 5 E’s model.

3.3 Importance of Constructing Performance Indicators in Public Sector

Performance indicator is powerful because people in organization tailor their behavior to the standards by which performance is evaluated. Interest in performance measurement has been enlarged in public sector organizations as a result of increased demands for accountability on the part of governing bodies, the media, and the public in general, and a growing commitment on the part of managers and agencies to focus on results and strengthen performance (Markić,2014)

3.4 Obstacles when Constructing Performance Indicators

If the organization's strategy and key objectives are not clear, a conflict of interest and considerable bias into the process, identifying leading indicators is a very difficult process, and the ability to accurately measure and report on the identified measures may be difficult or impossible. (Mallow,2017)

4. Methodology

4.1 Data collection method

To achieve objectives of current study, secondary data is used to gather the information regarding the construction of performance indicators in Malaysia. The secondary data that is used are journals, articles, and public sector accounting books.

5. Discussion

There are different approaches in measuring the performance in public sector organization. . Next, The Benchmarking approach performance indicator is widely used in public sector organization. Secondly, there are obstacles in construction of performance indicators in public organization as there are boundaries in the reviewing activities. The performance indicators keep the organization accountable on their performances.

6. Conclusion

This project runs an overview of the performance indicators commonly used in public sector, discuss on the importance and obstacles when construction of performance indicators in Malaysian public sector organizations.

References

Abu Bakar, N. B., Saleh, Z., & Mohamad, M. H. S. (2011). Enhancing Malaysian public sector transparency and accountability: Lessons and issues. European Journal of Economics, Finance and Administrative Sciences, 31, 133-145

Abdul Rahman, Intan Safura, and Shahimi Mohtar. “Importance of Performance Measurement and Intellectual Capabilities in Government Sector of Malaysia.” International Journal of Academic Research in Business and Social Sciences, vol. 10, no. 5, 29 May 2020, 10.6007/ijarbss/v10-i5/7321. Accessed 23 Aug. 2020.

Ajmal, Mian M, et al. “TQM Practices in Public Sector”: researchgate, IGI Global, 2016, www.researchgate.net/publication/289366530_TQM_Practices_in_Public_Sector. Accessed 23 Apr. 2021.

Ali, D. E. (2020). Public Sector Financial Accounting and Reporting Practiced in Malaysia. UUM: UUM PRESS.

CGMA. “The Performance Prism.” CGMA, 11 June 2013, www.cgma.org/resources/tools/essential-tools/performance-prism.html. Accessed 23 Apr. 2021.

Ingrida Balaboniene, and Giedre Vecerskiene. “The Aspects of Performance Measurement in Public Sector Organization.” International Scientific Conference “Economics and Management, ICEM,” vol. 1, no. 1, 2015, icem.lt/index.php/icem/article/view/1701. Accessed 23 Apr. 2021.

Markić, Danijela. “A Review on the Use of Performance Indicators in the Public Sector.” TEM Journal, vol. 3, no. 1, 2014, pp. 22–28, bib.irb.hr/datoteka/689608.temjournalfebruary2014_22_28.pdf.

Mallow, MS. “Implementation of Performance Indicators and the Issue of Occupational Stress

in Malaysia.” Usim.edu.my, 2017, oarep.usim.edu.my/jspui/handle/123456789/3494,

WOS:000405856200006. Accessed 24 Apr. 2021

Ruzita Jusoh, et al. “Performance Measurement Practices of Public Sectors in Malaysia.” Researchgate, Journal of Global Strategic Management, 15 June 2012, www.researchgate.net/publication/267408989_Performance_Measurement_Practices_Of_Public_Sectors_In_Malaysia. Accessed 23 Apr. 2021.