The aim of this paper is to find out how the productivity of public services can be measured in the operative level of organisations. In particular, the role of different output elements (tangible and intangible) is examined.
A qualitative research approach is used. The current knowledge of the issue is presented by examining literature on public service productivity, intellectual capital and performance measurement. In the empirical part, the findings of the literature review are applied and further examined in the context of two services of the City of Helsinki, Finland.
The paper identifies tangible and intangible output factors in two case services. It also illustrates how the factors can be measured in practice. The empirical examination suggests that the challenges in the operative level productivity measurement relate especially to defining measures. Identifying of different output factors is an easier task.
The study presents and applies a novel approach of designing productivity measures for public services. More empirical studies using the approach are called for.
The measurement approach presented here can be utilised as a basis for designing sophisticated productivity measures of public services.
A key challenge in examining public service productivity relates to the intangible nature of services. Despite the great potential and practical relevance of the topic there seems to be no understanding of how to capture this feature in order to design valid productivity measures. The paper adds to the current knowledge by describing the process of designing measures for disaggregated components of productivity, shares practical experiences related to the design process and highlights the main challenges.
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