Public

Public Management
Management

Lecture no. 8

Aleksandra Torbica
 Measuring
Measuringperformance
performanceininthe
thepublic
publicsector:
sector:
opportunities
opportunitiesand
andchallenges
challenges

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Performance management in the public sector: why
promote it?

1. Democratic control (performance as accountability)

2. Orient consumer choice

3. Promote efficiency and effectiveness

4. Decide on resource allocation
5. Focus on Public Values

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PM: arguments «against»

 PM distorts public service delivery because it should be about

process/services, not only about products
 Governments produce multiple products and services
(multidimensionality) so it is difficult to measure
 Products and services are interconnected with other actors in
society
 It hinders innovation because public managers will only try to
meet the stated objective
 PM leads to endless «number crunching» and requires
additional bureaucratic machinery to be put in place
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 Critical issue #1:
ambiguity of the concept of “performance”

 Public sector organizations pursue multiple goals, in the attempt

to satisfy diverse constituencies at the same time
 The concept of “result” or “performance” is intrinsically
ambiguous
 There is no summary indicator as for private firms
 It is difficult to identify “objective” performance measures
everybody can agree upon

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“We make important what can be measured, but we cannot measure what
is important”

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Critical issue #2: measurement problems
 Performance management systems are centred on measures
and measurement
 Input, process, output and efficiency measures are simpler
to identify, but they matter less
 The measurement and evaluation of social outcomes is much
more troublesome (i.e. interdependence and co-production
phenomenon)

 As a consequence, there may be a disconnect between

– the phenomenon to be observed
– the measures selected to track it
– the measurements actually collected and supplied to decision-
makers
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Critical issue #3: rationality and representation

 Performance management systems envisage the ex ante

definition of goals to be pursued
 These goals are expected to be measurable, explicit and
stable over time

 Decision-making processes in public sector organizations,

though, are basically incremental:
 decision-makers pursue the consensus of a broad
coalition of players with different, evolving stakes
 decisions are taken on an ad-hoc basis, rather than “once
and for all”

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Critical issue #4: opportunistic behaviours

 The players undergoing evaluation are self-interested and

thus have an incentive to “play with the rules”: they try to
reap the benefits and avoid sanctions
 Typical “gaming” problems:
 threshold effect: effects of targets putting pressure on those
performing below the target to do better, but also inducing
those doing better than the target to allow their performance to
deteriorate to the standard
 output distortion: attempts to achieve targets at the cost of
significant but unmeasured aspects of performance
 ratchet effect: tendency for controllers to base future targets
on past performance, meaning that managers have an incentive
not to exceed targets even if they could do so
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Threshold effect-
performance target paradox

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 Examples of output distortion as a result of PM:
Police in the UK

“Crime statistics are manipulated”, says police chief

 An "obsession" with reducing crime is creating pressure on police to

"manipulate" crime figures, a senior police officer has said.
– Derbyshire's Chief Constable Mick Creedon said numerous officers in "many forces" had told
him it was happening.
– He said officers were "doing everything they can" to avoid crime going up.
– Policing Minister Damian Green said a "robust" inquiry into recording practices by the
Inspectorate of Constabulary would report next autumn. MPs heard claims that forces were
routinely manipulating crime statistics to meet targets.
– He said manipulation of the figures was the "unintended consequence" of pressure from
police leaders, inspections and plans drawn up by police and crime commissioners to cut
crime.

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Critical issue #5: paper-based reform process?

 Every innovation must be rolled out within a pre-existing

administrative culture, which influences its actual features

 The managerial model must be implemented to modify a pre-

existing culture which emphasizes uniformity and
bureaucratic procedures

 Performance management systems can be implemented “on

paper only”

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Critical issue #6: features of public institutions

 The pilot institutions when establishing performance

measurement systems are usually large, but many public
sector organizations (e.g. municipalities, hospitals) may be
small or very small
 Their functioning mechanisms are very different as
compared to those of larger organizations: roles are often
unclear, and social control is the most important
accountability mechanism
 Under these circumstances, performance measurement
and management systems can be dysfunctional or not very
useful

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 Take home messages

 Performance measurement systems can make a difference in

the government

 Good performance measures signal what the real priorities

are, and they motivate people to work harder to accomplish
organizational objectives

 But success doesn’t come easily: designing and implementing a

performance measurement system in public or non profit
agency is vary challenging process with many risks!

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