New cost accounting models in measuring of library employees' performance
| Published date | 30 December 2011 |
| Pages | 50-65 |
| DOI | https://doi.org/10.1108/01435121211203310 |
| Date | 30 December 2011 |
| Author | Kate‐Riin Kont |
| Subject Matter | Library & information science |
New cost accounting models in
measuring of library employees’
performance
Kate-Riin Kont
Academic Library of Tallinn University and Acquisitions Department,
Tallinn University of Technology Library, Tallinn, Estonia
Abstract
Purpose – The current article aims to give an overview of how the new cost accounting models, such
as activity-based costing (ABC) and time-driven activity-based costing (TDABC) are researched and
adapted by university libraries, focusing on the methods used for measuring work time allocation as
well as on the strengths and weaknesses of both models.
Design/methodology/approach – The data used in this paper are based on reviewing and
summarizing of relevant studies which were conducted in libraries inspired by the ideas of modern
theoretical considerations and treatments relating to cost accounting and costing, originally developed
for industry and private sector organizations.
Findings – The implementation of cost accounting systems in libraries has historically been treated
as a technical innovation rather than an organizational or management innovation. The most
important consideration is that librarians are not machines, which can be set at a given speed and
expected to produce a uniform product. It turns out that the results of such research are largely
affected by what methods are used to identify the time spent on activities and how well the
management of libraries or researchers were able to explain to the staff the necessity for such research.
Originality/value – Besides the articles published so far dealing with the implementation of ABC
and TDABC in libraries, no research or surveys focus on these issues from the perspective of
employees.
Keywords Cost accounting,Costing, Activity-based costing,Time-driven activity-based costing,
Employees’ performance measurement,Libraries
Paper type General review
Introduction
It is assumed that public sector organizations have less incentive to be efficient
stemming from the principles of budgeting. Indeed, the budget does not depend on the
efficiency and performance of the public organization. Because of lack of control public
sector organizations are not too often interested in saving in their budget fun ds. If an
organization or its department strives to be financially effective and save money, it
may result in a lower budget for the next year.
In the library, the words “efficiency”, “productivity” etc. are rarely used except in
their most pejorative sense. To talk about the number of books catalogued per hour by
a cataloguer is to move beyond the accepted professional norms. The concept is not
culturally accepted in the context of library work.
In the current socio-economic situation, efficiency and performance have become
very important in libraries. It is challenging to cope with the same or reduced resources
in managing the same processes and activities, so that the quality of the result would
The current issue and full text archive of this journal is available at
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LM
33,1/2
50
Received 1 April 2011
Revised 27 June 2011
Accepted 17 August 2011
Library Management
Vol. 33 No. 1/2, 2012
pp. 50-65
qEmerald Group Publishing Limited
0143-5124
DOI 10.1108/01435121211203310
not be affected. University libraries are faced with the challenge of retaining effective
staff who have skills necessary to respond to new and changing circumstances and
increased user demands.
In ensuring the work efficiency of public organizations, the role of the employee has
been underestimated, as also evidenced by the lack of respective academic research.
Public sector organizations are generally considered old organizations. Throughout
centuries, public organizations have retained a relatively unchanged hierarch y,
structure and strict rules of procedure and their long-term status is characterized by a
certain inertness, which makes it difficult to carry out rapid changes in public
organizations and their structural units.
Libraries are considered structures, which are slow in integrating in the new
economic environment – the implementation of the methods of library performance
evaluation and benchmarking in the management processes of the library and in
forming strategies is taking place gradually. Basing one’s management practices on
the evaluation of effectiveness, capabilities and contribution, and measuring the usage
of resources requires efforts, willingness and understanding.
Reform endeavours in public sector are targeted to saving or improving work
performance, often broad organizational changes accompany it like decentralization or
reforms of finance management, inculcating the values among employees of public
sector, which conduce stronger concentration to services or greater wish to take
responsibility for the results. Better management of the public sector is vitally
important to achieve economy, effectiveness and expertness in a short- and long-term
perspective. The potential to activate better management practices definitely exists in
almost every public sector organization. Cutting costs can have a great influence to
organization and management – it exposes weaknesses and deficits, which can be
hidden in better conditions. Traditional public sector values emphasise primarily
stability, predictability, consistency and certainty (Metcalfe and Richards, 1993).
In the library as a service enterprise, efficiency depends mainly on the employees,
and thus, if the organization begins to pay more attention to efficiency and the
optimization of costs, the work of all employees is considerably affected.
Dependence on local government and state finances as well as the increasing prices
of publications, electronic databases, etc. have influenced the library and information
sector in both positive and negative ways in the decades since the 1980s (Roberts, 2003,
p. 463). Libraries have traditionally offered their services free of charge. New services
based on expensive licence fees make it economically difficult for libraries to serve with
limited and shrinking resources when price increases exceed the annual increase of
library budgets (Haarala, 2004, p. 3). In the 1990s, savings in staff and in information
resources became common. Downsizing staff was and still is, a painful operation –
civil servants were laid off, and voluntary vacation was recommended. The lack of
workforce was evident, and actions were needed (Haarala, 2004, p. 4). To get a better
picture of the activities that libraries are actually engaged in and their cost, studies
using new cost accounting/costing models in libraries around the world have become
common. Constraint on public funds and a shift to an enterprise culture have
undermined the welfare tradition of social provision. However, this has also
encouraged a climate of innovation and so gained new potential and momentum
(Roberts, 2003, p. 463).
New cost
accounting
models
51
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