Performance management in a setting of deficient output controls

Nico P. Mol and Robert J.M. Beeres

International Journal of Productivity and Performance Management, 2005, vol. 54, issue 7, 533-550

Abstract: Purpose - Sets out to stress the need to adjust performance management to the deficiencies inherent in the output controls within The Netherlands defence forces. Design/methodology/approach - By analysing the management control reforms of the recent past, the paper assesses the scope for a “decision revelation” within the Defence organisation. It develops a framework for disclosure of decentralised decision making focusing on the allocation of labour time within the fixed labour force. Recent developments in the Defence organisation units for officer education and training are used to illustrate the framework. Findings - Management control systems fail because of weaknesses in the management accounting information underlying them. Management accounting information with respect to defence expense budgets does not grasp the relevant decentralised decision making to be controlled. This decision making is primarily concerned with the opportunity costs of the allocation of time within the labour force of the Dutch Department of Defence. Practical implications - Variability of costs should be disclosed in terms of labour time information. Budgetary accounting restricted to the department's (fixed) expenses on military personnel will not reveal for which purposes defence money is actually spent. Originality/value - Outlines a framework for decision revelation as a base for management contracting between central management and lower level organisation units.

Keywords: Performance management; Control; Armed forces; The Netherlands (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijppmp:17410400510622214

DOI: 10.1108/17410400510622214

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