Rusdi Akbar

Performance measurement in Indonesia: The case of local government

Purpose: The purpose of this paper is to investigate the implementation of performance measurement systems (PMSs) in Indonesian local government (ILG) using Smart PLS. Couched within an institutional theory framework, it explores a conceptual model developed to explain the hypothesised relationships between technical and organisational factors and the development and use of performance indicators and accountability practices. Design/methodology/approach: Surveys were sent to senior finance officers in all local governments (457) across Indonesia with a response rate of 21.4 percent being achieved. Smart PLS was used to assess the quality of the data and analyse the research model proposed. Findings: Findings revealed that ILGs developed performance indicators more to fulfil regulatory requirements than to make their organisation more effective and efficient. As a way of increasing the success of PMS implementation management commitment through good leadership was found to be a major contributor. Coercive pressure from central government impacted on the result as did normative isomorphism by way of widespread training by universities (and others) and the subsequent sharing of this knowledge.

Implementing performance measurement systems: Indonesian local government under pressure

Purpose - – This paper aims to explore the perceived drivers behind the implementation of performance measurement systems (PMSs) in Indonesian local government (ILG). It analytically assesses Indonesia’s attempt to introduce PMSs by addressing three research questions: Do organisations in developing countries actually use PMSs to aid decision-making and help plan for future performance improvement? ( Design/methodology/approach - – This research explores the perceived drivers behind the implementation of performance measurement systems (PMSs) in Indonesian local government (ILG). It analytically assesses Indonesia’s attempt to introduce a PMS by addressing three research questions: Findings - – Results determined that although employees perceived coercive isomorphism as being a driver of ILG compliance with President B.J. Habibie’s presidential instruction (Inpres No. 7/1999), the Laporan Akuntabilitas Kinerja Institusi Pemerintah/Performance Accountability Report of State Apparatus (known as LAKIP), many councils were still not reporting and those who were, were not doing it well. Many councils lacked management motivation, with some choosing to merely mimic (mimetic isomorphism) what others were doing. Better-resourced councils made use of external consultants or local universities where knowledge was shared (normative isomorphism). Practical implications - – An understanding of factors influencing the development and use of performance measures, in turn, can be used not only to improve PMSs in the future but to improve the quantity and quality of LAKIP reporting. Originality/value - – The theoretical development and interpretation of this research is drawn from institutional theory with a major contribution being that it provides an in-depth conceptual overview and understanding of factors influencing the development and use of performance measures. Further, it fills a gap in the literature exploring PMSs and accountability in a developing country – in this case, Indonesia.