Performance management in government and public services – balanced

score card

An organization is akin to a human being. It has a life. It is born, it grows, matures,

ages and dies or transforms during its life time. It goes through businesses and
economic cycles of boom and bust, growth and recession, just like individuals /
families go through highs and lows in life. It is a living system. It has several parts
(subsystems), dimensions of performance, demands, expectations, shortcomings,
special strengths and weaknesses, which may vary with time. It has to live in the
business environment just like human s have to live in the society composed of
fellow humans and also members of other species. It gets opportunities to exploit
and enjoy and also have to live with threats from fellow beings or species of a
different kind.

An individual has several capabilities not all of them equal in their degree or across
various individuals. There may be individuals who are competent in mathematics
but poor in sports or arts, there could be someone who is a great scientist but has
simply unacceptable manners, grooming, dress sense, appearance and behavior.
Some are very easy going, social animals, liked and appreciated by many in society.
Others may be morons and are just matter of fact, official, rigid.

Organizations and individuals exist and grow in this complex environment where all
these attributes / subsystems coexist and are necessarily needed for one attribute /
subsystem to function, just like individuals need all the subsystems like respiratory,
circulatory, sensory, and digestive and so on, for their healthy existence. A balanced
functioning of these several subsystems enable the individual to live.

Similarly, there is a great amount of interdependency among various subsystems /

departments / functions, whose cohesive and synchronous functioning alone will
enable the organization to move forward in pursuit of its objectives. Organizations
perform due to the collaborative and synchronized functioning of the finance, HR,
marketing, technology, production, subsystems.

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One cannot have an individual whose only competency is mathematics, as for him
to use his competency he necessarily has to communicate with other people, get
their support, and convince them and so on. One cannot therefore assume a uni-
dimensional assessment of an individual and typecast as good, bad or ugly. On the
similar lines organizations have a multidimensional character reflected in their
several functional areas. Only a well orchestrated functioning of the various
subsystems allow the organization to progress.

Assessing the health of an organization has to take into account the contribution
from each subsystem and their coordinated functioning. A balanced score card
helps assess the health of the organization as an organization, collectively. Compare
a cricket team that has batsmen, bowlers, wicket keeper, fielders, captain and team
manager. Each if these is an asset to the team individually, but the team will win
the match only if there is a balanced contribution from and coordinated functioning
of the various experts. Similarly, the organization’s performance has to be seen
distinctly from the individual functional area performance such as finance, market
share, employee strength, image, alone

A balanced score card recognizes the vision, mission, goals of the organization. It
also recognizes the drivers of competitive advantages for the organization that may
be industry specific. For instance, in the knowledge/service industry, the role of the
HR department assumes great significance while in a trading business it could be
working capital management and merchandising functions. In a high technology
industry such as engineering, it could be the technology group and their
functioning, say the no. of patents registered. Similarly, the top management may
have their own managerial vision, value systems and priorities. For instance, some
organizations attach great importance to employee care and retention, while others
are hungry for market share and PAT. Some may be focusing on short term financial
objectives such as profitability every quarter, while others may focus on working
towards gaining a strategic advantage over a three year horizon. Depending on the
nature and line of the business, the strategic thinking and organizational values,
priorities, the inter se weight age attached to various performance parameters in
the BSC could vary.

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To measure organizational performance, once also has to ask ‘on what performance
parameter’? The various performance parameters are expected to sync to enable
the organization to grow. Some of the performance measures are quantitative ,
whereas some are qualitative (collected through measurement of perceptions). It
may also be necessary to develop indices for measuring performance of each
performance parameter, for instance % growth in monthly sales, market share, and
% of employee separations in the last month,….

The expectations of various stakeholders are not necessarily aligned. It could even
be in conflict with each other. In such a scenario, for one to assess organizational
performance, one has to adopt a balanced approach to rate an organization against
its own industry peers or across all organizations.

All organizations whether they are in business or government, exist to meet certain
expectations of their stakeholders. All operations of organizations across industry /
service / objective categories, are governed by three common dimensions : input ,
process and output. Therefore, at a high level, it would suffice if we measure these
key parameters and assign weight age to each factor based on the assigned priority
and reduce it to a common index to rank / rate organizations on a uniform balanced
yardstick. The factors considered and weight age assigned reflect the priorities of
the evaluators.

A balanced scorecard is an excellent normalizing tool to assess how in a balanced

manner organizations are able to meet multi stakeholder expectations. A balanced
score card also ensures that organizations maintain a sense of balance while acting
in pursuit of their stated / unstated objectives. The focus is not sitting in judgment
over what objectives organizations should pursue and how do the various objectives
rank in terms of priorities attached.

On the other hand, the focus is on highlighting the need for a holistic approach to
an assessment and evaluation of performance vies-a- vies a narrow approach,
whereby some stakeholders interests get more attention in comparison with that of
others. For eg. One can over focus on achievement of shareholder interests through
EPS. This may jeopardize the interests of employees whose wages get cut to make
more earnings to shareholders. Over emphasis on profitability may also result in

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poor tax compliance or using means that are not necessarily legally and ethically
acceptable.

A balance growth supports long term sustenance, sustained positive, brand value,
enables attract employees, suppliers and customers as also a positive attention
from regulators. In the long run, image and brand value as a good corporate citizen
carry much higher, market value than PAT, EPS, share price in the market. The value
of a balanced growth and hence a BSC have been well recognized among global
corporations as a good growth strategy. The BSC also helps to effectively
communicate management’s priorities and help implement the same through
appropriate relative weight ages assigned in the BSC.

Let us now look at what are the elements of the balance score card, how are these
data identified, collected, measured, analyzed, ad arrived at as a BSC to reflect
organizational standing.

BSC as a performance monitoring tool for government organizations /

public services

The government and the public services sector has been at the receiving
end of management practitioners, the citizens, media as well as the policy
makers. Performance management in government has also been the
subject of criticism and debate at the highest levels such as the PMO, the
Planning commission, the CAG, several committees, the various consumer
grievance redressal fora. Is it because the stakeholder expectations are
unrealistic, diverse, not stated / known clearly to the service providers, we
use in-appropriate yardstick to measure performance, lack of clarity on
what performance is among the decision makers and employees in these
organizations, they do not have realistic infrastructure / support system to
deliver, incompetency among the employees, lack of involvement /
indifference of employees, inappropriate inventive and disincentive to
direct efforts towards achievement of goals / work towards defined
performance measures or a combination of these? Is it that all government
organizations providing varied services / performing varied roles are
victims of perception of low performers? Is it that the gap in the

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expectation / delivery mismatch has a common pattern for organizations
performing similar roles such as ULBs, Revenue departments, Utilities, law
enforcement agencies, administrative departments, PSUs in business? Is it
that everyone is complaining including the service providers, citizens,
policy makers,….and if so, it appears there is no clarity on what to expect,
who is to deliver, how do you measure performance, .. or these are not
uniformly understood and communicated and also used for measuring
performance and publishing the same for dispelling myths. I sit also that
in this cacophony, there are certain elements are rejoicing over the
opportunity to benefit themselves at someone else’s cost?

It is possible to address this complex scenario through performance

management systems such as BSCs in government. In fact the BSCs are
more relevant for the government than the private sector which
apparently exist for commercial benefit as their super-ordinate goal, while
the govt. exists to achieve society’s goal that are more complex, diverse,
all encompassing, cannot choose their customer - the citizen, … Also since
the government’s outputs are not measured in monetary / tangible terms
such RoI, EPS, market share,…the value of the service rendered is also not
visible. In fact, for many government organizations, their presence may
not be felt, but their absence will be, for eg. The Police department.

In this scenario, it is possible for using tools such as the BSC for
assessing performance of the department, unit at any level. The BSCs will
be able to define performance expectations, measures weight ages, data
sources and collection methods, verification and data analysis, result
aggregation and arriving at indices for the BSC, comparison across
organizations, units, geographies, services, as well as longitudinally over
time. This approach will force definition of objectives, means, priorities,
performance parameters and measures, and thereby transparently share
the results and feedback to all stakeholders.

Sharing of the BSC indices and discussing on varying levels of

performance with all stakeholders will provide a forum and method for
bringing in clarity on expectations as well as performance diagnostics. We
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believe that the approach will help bring in transparency, professionalism
and logically tread towards higher levels of expected performance. It will
also help reduce scope for corrupt practices and active participation of
stakeholders.

The objectives, expectations and parameters themselves can be arrived at

through a consensus process involving all stakeholders so that the buy in /
taking ownership for the action points from the deliberations can be
ensured.