Chapter 19 - Performance In The Non Profit Sector

Question 1

What are the three Es for value for money

Answer 1

Economy
-attaining the appropriate quantity and quality of imports at the lowest cost
-Pay fair price for the best resources
- e.g. Building costs and equipment should be put out to tender and staff costs should tie wage increases to the jobs in the private sector

Efficiency (resource utilisation)
-maximising the outputs for a given imports (or for a given output achieving the minimum input)
-building/equipments. If beds are only 40% full in hospitals why are we paying for the full building. Percentage of beds occupied on average
-staff e.g. nurses ratio of nurses to patients they shouldn’t be waiting around for new patient numbers are balance between patients and nurses

Effectiveness
-determining how will the organisation as achieved its desired objectives
- How successful we are at achieving our objectives for example death rates for hospital or percentage of patients returning the same problem

Question 2

What are the problems with performance measurement within the not-for-profit sector

Answer 2

Multiple objectives
– even if all objectives can be clearly identified it may be impossible to identify an overriding objective or to choose between competing objectives

The difficulty of measuring outputs
– an objective of the health service is obviously to make ill people better however how can we in practice measure how much better they are

Financials constraints
-public sector organisations have limited control over the level of funding that they received on the objectives that they can achieve

Political social and legal considerations
– the public have higher expectations from public sector organisations and commercial ones and such organisations are subject to greater scrutiny and more odorous legal requirements

Little market competition and no profit motive