The Performance Of Public Enterprises

Download or read book Performance Evaluation for Public Enterprises written by Leroy P. Jones and published by World Bank Publications. This book was released on 1991 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Performance evaluation is not a simple task in private enterprises and it is all the more complicated in public enterprises. This paper emphasizes three main points: (a) a public enterprise must be evaluated; (b) a public enterprise must not be evaluated like a private enterprise; and (c) a public enterprise should be evaluated by starting with private profit and making a series of adjustments to make it fair to the nation and to managers. This paper suggests introducing a signaling system which consists of three major components. The first is a performance evaluation system, in which national goals are translated into explicit enterprise objectives and quantified in a performance criterion. The second is a performance information system, in which actual achievements are monitored. The third is an incentive system, in which the welfare of managers and workers is linked to national welfare by a pecuniary or non-pecuniary bonus system based on achievement of particular target values of the criterion variables. The paper proposes a phased system of implementation stressing how performance evaluation must be the product of an evolutionary process involving both enterprise managers and government supervisors.