The Importance of Performance Management Implementation Based on Balanced Scorecard and Local Government Governance on Local Government Performance in Indonesia

Every local government in Indonesia are competing to achieve the development goals in each region and achieve performance excellence. Various variables may be driving the achievement of performance targets of local government. The purpose of this research is to study the effect of the application of the performance management system based on balanced scorecard and the implementation of governance on the performance of local governments in Indonesia. This study uses quantitative method. Its population is the local government in Indonesia. The sample is 33 (thirty three) government districts and cities in Indonesia. The Data used are secondary data from the website of city district government, the Central Bureau of Statistics, and the Indonesia Governance Index (IGI). Local Government performance is measured by Index Pembangunan Manusia (Human Development Index) made by the Central Bureau of Statistics; governance is measured by the Indonesia Governance Index (IGI); and the application of the balanced scorecard is measured by assessing the level of implementation. The results showed that the performance management system based on balanced scorecard has no effect on the performance of local government, but the implementation of local government governance effects local government performance.