ABSTRACT

This chapter examines how the Performance Evaluation of Public Institutions (PEPI) system in Korea has contributed to improving performance of public corporation from the perspective of financial efficiency and public values A monitoring tool for performance is indispensable considering that public corporations often have separate ownership and enforcement. For several decades, the PEPI system has developed various performance indicators for evaluating financial aspects such as business process efficiency, management of finance and budget, and total labor cost increase rate, and so on. In addition, in order to reflect diverse social values that change with the stages of economic development, the system has actively developed new indicators including – but not limited to – disaster and safety, gender equality policy, environmentally friendly management, and improvement in job quality. Although the PEPI system considers both the financial and public aspects, the criticism is dominant that the system is overly weighted toward financial evaluation. In this regard, this chapter investigates the historical change of indicators of the PEPI and presents that the PEPI system has positive effects not only on the financial aspect but also on the realization of public value. The case of Korea will provide useful implications for the performance management of public corporations in developing countries.