Performance evaluation through DEA benchmarking adjusted to goals

TL;DR

This paper extends Data Envelopment Analysis (DEA) to evaluate organizational performance by incorporating management goals, ensuring targets are both attainable and aligned with improvement policies, demonstrated through a case study of Spanish universities.

Contribution

It introduces DEA models that integrate goal information to produce performance targets close to actual performance and management objectives.

Findings

DEA benchmarking adjusted to goals provides attainable and relevant targets.

Models successfully incorporate goal information into efficiency evaluation.

Application to Spanish universities illustrates practical utility.

Abstract

Data Envelopment Analysis (DEA) is extended to the evaluation of performance of organizations within the framework of the implementation of plans for improvements that set management goals. Managers usually set goals without having any evidence that they will be achievable at the moment of conducting performance evaluation or, on the contrary, they may set little too unambitious goals. Using DEA for the benchmarking ensures an evaluation in terms of targets that both are attainable and represent best practices. In addition, the approach we propose adjusts the DEA benchmarking to the goals in order to consider the policy of improvements that was pursued with the setting of such goals. From the methodological point of view, the models that minimize the distance to the DEA strong efficient frontier are extended to incorporate goal information. Specifically, the models developed seek DEA targets that are as close as possible to both actual performances and management goals. To illustrate, we examine an example that is concerned with the evaluation of performance of public Spanish universities.