The NHS performance assessment framework as a balanced scorecard approach: Limitations and implications

The use of the balanced scorecard has been subject to increasing scrutiny and criticism in academic literature. The purpose of this paper is to explore the limitations of, and implications for, the Performance Assessment Framework (PAF) as a balanced scorecard approach in the NHS. Although Kaplan and Norton suggested that the balanced scorecard can be adapted for strategic performance management purposes in the public sector, this study aims to argue that such claims fail to give sufficient weight to the political context in which a public sector organization operates.

Semi‐structured interviews were employed to investigate the perceptions about the PAF of local managers and whether and how they incorporated central government's performance targets into their local operations within two health authorities. Furthermore, in order to examine these two health authorities' performance measurement practices, documents relating to their internal performance reports and local delivery plans were analysed.

Empirical findings drawn from local health authorities indicate that the use of the PAF was primarily for legitimacy seeking purposes rather than for rational performance improvement. For central government, the PAF was used to make the performance of the NHS visible to the public so that the public would receive the signal that central government has attempted to deliver government mandates. For local health authority managers, in order to seek legitimacy from central government, imposed performance indicators were incorporated into their local performance measurement practice. However, the use of the PAF was symbolic and ceremonial and had little impact on improving performance valued by local managers in NHS.

This study agrees with institutional theorists' argument that the use of performance measurement systems should take into account politics and power faced by an organization. In the NHS, performance measurement might be used by local NHS organizations primarily as a ceremonial means of demonstrating their symbolic commitment for legitimacy seeking purposes.