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This paper investigates the relationship between performance management system and innovation in the public sector. Performance Management system is a tool to boost organizational efficiency and effectiveness and to secure accountability of public actions on citizens’ demands. Innovation at the organizational level emphasizes adoption or application of ideas beyond the consideration of new things. In particular, government innovation is to put citizens at the center of governance efforts. This study suggests that government innovation extends the concept of performance management. Appropriate feedback processes by performance management system stimulate government innovations. Both performance management system and government innovation are a route to better organizational effectiveness. Managing government performance and innovation are closely associated with the survival or success of modern public organizations.
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