A general overview of the literature of PM is provided that includes an overview of the current status of PM in public libraries and an in-depth review of the use of PM in Florida public libraries.
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Overview of Performance Measurement
Evaluating business organizations was simple until the mid-18th century.
Business organizations consisted mostly of families who shared the respon- sibilities of work and worked for the common good. Success was measured in the strict terms of financial reward and organizational survivability.
However, with the advent of the Industrial Revolution, many business or- ganizations began to grow both in size and in complexity. It was during this period of growth that Adam Smith stated that, by dividing labor into smaller, specialized tasks, efficiency would improve and production costs would decrease. In related performance literature, Robert Owen wrote in 1813 that managers should pay as much attention to the people working in a company as they did to the machinery. Owen’s work was the beginning of the study of organizational dynamics and organizational administration, work designed to gauge how the (efficiency) of work contributions of in- dividual or small specialized groups related to the overall performance of a company.
The need for organizations to harness greater amounts of efficiency from machinery and people increased due to the effects of the advances in com- munications and technology during the late 19th and early 20th century.
Businesses began to access markets that were previously closed to their goods through the use of such devices as the telegraph and railroads. Busi- nesses and industrial plants grew and serviced larger geographical areas of the world. The geographic reach of businesses caused organizational size and complexity to increase further. Businesses required more employees and opened new facilities with increasingly mechanized production technologies, further complicating the operation of their organizations. Obtaining greater amounts of efficiency and reducing cost in producing or providing goods and services became of paramount importance to owners and stockholders during this expansion of global markets.
From the mid-19th to the early 20th century, most administrative or performance research was based on the perception by business managers and owners that increasingly higher levels of efficiency were possible and necessary to maintain or increase profitably. Because of the broader global markets, business owners and managers found themselves in an increasingly competitive arena. Businesses that could produce large quantities of goods at the highest level of efficiency and thus an affordable cost in a highly competitive market were deemed to be the most successful, with success being measured solely on the scale of profitability for business owners and stockholders. Business owners and stockholders believed that increased
profitability was to be accomplished only through increased organizational efficiency and cost reduction.
It was with the viewpoint of generating the highest efficiency and in re- ducing costs in the workplace that in 1885 Henry Metcalfe used his obser- vational studies of soldiers in a military arsenal to advocate that the ‘‘science of administration’’ would be beneficial to managers. Work organization research led to the field of scientific management. Louis Brandeis coined the phrase ‘‘scientific management’’ in 1910 when he stated before the Interstate Commerce Commission that through scientific management of resources and men, the nation’s railroads could save over $1 million a day (Shafritz &
Ott, 1997, p. 11).
While Brandeis may have coined the term scientific management, its fa- ther is considered to be Frederick Taylor. Taylor conducted a series of scientific time and motion studies on different groups of workers in order to determine the most efficient way to accomplish tasks, thus reducing costs. It is from Taylor’s work, as well as other PM researchers, that many of today’s PM systems derive their scientific or analytical qualities.
Scientific management researchers such as Taylor attempted to organize workers and resources into effective, scientific patterns of operation in order to improve production and reduce costs of an industrial or commercial plant. The organizing process focused on determining the most effective size and operation of an organization to maximize the quantity of work pro- duced, but not necessarily the quality of the work. Emphasis was placed on management’s absolute control of the organization and its employees as the primary means to achieve increased productivity, efficiency, and cost re- duction. In order to determine the performance of organizations under this philosophy, managers measured the efficiency, degree of control, and profitability of the organization. The high quantity-control style of oper- ations management and PM continued through the early 20th century up through the post-World War II era.
The emphasis of scientific organizational control and optimization of the quantity of work slowly shifted to an emphasis on quality after the post- World War II era. In the late 1950s and early 1960s, advances in com- munications and technology were again providing the foundation for the expansion of the global economy. These advances allowed new competitors and products into older competitive markets where they had never been be- fore. Because of increased competition, many business organizations seeking a competitive edge were forced to switch from a focus on providing and deliv- ering large quantities of affordable, but cheaply produced goods and serv- ices, to a focus on providing and delivering high-quality goods and services.
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The culture of business organizations was affected by this change in pro- duction philosophy. New organizational structures, values, and practices that supported the quality production philosophy were encouraged, created, and rewarded. New types of PM methodologies and measures were created to assist business owners and managers in evaluating the production and service quality of their organizations. It was during this period that such quality-driven, cost accountability tools as total quality control (TQC), total quality management (TQM), reengineering, and the like became prevalent.
Business organizations emphasized and prioritized the quality of work. The new quality-driven, cost accountable PM tools enhanced the administrator’s ability to monitor the quality of production through tight control of re- sources, staff, and processes to reduce costs and improve the quality of products and services by using PM information to identify problems and make corrective changes in organizational processes.
Quality-driven, cost accountable PM tools also enabled managers to ad- dress their stockholders’ demands for accountability and quality perform- ance by providing them with tangible and mutually understood performance information. Customers and stockholders began appreciating, because of increased service quality, profitability, and/or access to accountability in- formation, the new competitive practice of quality management and began to expect such control, accountability, and quality assessment in the social and political aspects of their lives.
The quality-driven, cost accountable production culture of businesses began to encroach on the overall societal culture in the mid-1990s. The culture encroachment began in the early 1990s into government agencies, community service groups, and other nonprofit organizations that began incorporating qualitative PM methodologies and measures into their tra- ditional quantitative PM systems. The qualitative PM was appealing to many nonprofit organizations and their stakeholders. The interest by non- profit administrators and stakeholders in the shift from quantitative to quality-driven, cost accountable PM was due in large part to the growing number of increasingly difficult inquiries related to accountability facing administrators and stakeholders of nonprofit organizations. Nonprofit ad- ministrators found it increasingly difficult to answer public concerns about the effective or efficient delivery of public services as their stakeholders made inquiries regarding the impact of the service provided. Nonprofit admin- istrators perceived that to more effectively respond to these impact inquiries, quality-driven, cost accountable performance measures could be used to address the question of whether the service provided was truly needed and what difference the service made for its recipients. While traditional
quantitative PM could potentially demonstrate the cost-effectiveness of a nonprofit organization, these measures alone could not provide many non- profit administrators with the necessary tools to effectively address impact.
Nonprofit organization administrators and stakeholders also perceived that just as businesses had adopted a quality-driven, cost accountable cul- ture and system, they could do so to improve their competitive abilities.
Nonprofit organizations that used the quality-driven, cost accountable per- formance measures could also derive a competitive advantage over other nonprofit organizations in obtaining community and funding support. As nonprofit organizations incorporated quality-driven, cost accountable PM systems, their organizational cultures, priorities, and values began to change just as they had in by business organizations. The performance measures that addressed customer satisfaction and impact or outcomes assessment were of particular interest to nonprofit organizations.