The shift from an internal focus on efficiency and effectiveness in public service organisations (PSOs) towards the external co-creation of services with service users and customers is espoused in the theory of Public Service-Dominant Logic (PSDL), as proposed by Osborne et al. (2013). According to Osborne, et al. (2013), customers and citizens are the key stakeholders within PSDL and by co-creating services with PSO staff, the PSDL approach ensures public services are shaped by the experiences and knowledge of the service user. However, “what is now needed is an agenda of empirical research to test out the insights and limitations of this theoretical approach” (Osborne et al., 2013, p. 151). This paper examines how performance management in UK PSOs, specifically, can help scholars to understand the strengths and limitations of using PSDL in practice. In doing so, this article seeks to develop a greater understanding of value co-creation in the context of performance management.
This article examines how UK PSOs use performance measures and reporting mechanisms to inform performance management activities through a two-stage exploratory, qualitative case study approach. Drawing on the PSDL as a theoretical lens and the SERVICE Framework (Osborne et al., 2015), stage one of the research explored the cycle of performance management activities in seven case organisations (including a community NHS provider and a UK university). Stage two, then focused upon how performance management activities informed service improvements and co-creation activities with key stakeholders in four case organisations (including a police authority and a tertiary UK health authority). During both research stages, semi-structured interviews were conducted with different staff hierarchies involved in performance management activities. A thematic analysis approach based upon methodologies by Braun and Clarke (2006) and Zimmermann et al. (2015), was used to examine the qualitative data from the case organisations.
Preliminary findings suggest that performance measurement and reporting mechanisms within the case organisations often focused upon internal efficiency and value for money activities, rather than upon external service effectiveness and equity. Performance management structures and activities within the case organisations also seemed to hinder the external co-creation of value with key stakeholders. We therefore suggest that the case organisations in this study, were often using aspects of performance management in such a way that are reflective of aspects of New Public Management (NPM), but not of PSDL or the SERVICE Framework.
Our analysis has highlighted examples of how some case organisations have started to move towards using aspects of PDSL and the SERVICE Framework, to ensure public value co-creation is an ‘inalienable component’ (Osborne, Radnor, and Nasi, 2013, p. 149) of performance management activities. For example, the tertiary UK health authority, regularly holds discussion sessions with patient groups, to ensure patient feedback is a core part of organisational improvement projects. The next stage of this study, will therefore focus upon what are the enablers and barriers for PSOs to move towards using PSDL and the SERVICE framework in day to day performance management activities.
Value co-creation, co-design and co-production in public services
