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SECTION 3: PERFORMANCE MANAGEMENT IN A CENTRAL GOVERNMENT CONTEXT
Section introduction
3.1 This section considers examples of good practice in organisational performance management systems currently found in governmental activity. National cultures exert influence over organisational and governmental practices in many countries (Hofstede, 2001) and there is clear evidence of global convergence in relation to organisational performance management in a government context. The exact nature of the degree of convergence is not within the scope of this study. According to Pollitt (2001, p 943):
Many benefits flow to many players from a situation in which there is a dominant, but loosely-specified set of reform ideas which apparently can be applied to a very wide range of public sector contexts.
3.2 There is therefore an expectation that changes in organisational performance management in one system of government would be replicated in other governments at least in the short term. The OECD (2007:19) has noted that within the past five years 75% of OECD countries have introduced a new initiative on performance management in government. Despite apparent convergence, there remains diversity across countries and differences within countries reflecting governmental policy priorities. The triggers for change are commonly financial crises, pressure to reduce public expenditures and changes in political administration. The objectives of the reforms focus on:
- Budgetary priorities of expenditure control and improving allocative efficiency and productive efficiency;
- Results based management and improving public sector service delivery, efficiency and performance; and
- Improving accountability to politicians and the public.
( OECD, 2007:24-25)
Most of the international performance management reforms have more than one objective.
New Public Management and international trends in organisational performance management in government
3.3 Organisational performance management in government is not new but was given increasing importance in the UK and elsewhere post-1979 with the emergence of the global New Public Management ( NPM) (Hood, 1991). New Public Management ( NPM) refers to a series of themes relating to reforming the organisation and procedures of the public sector in order to make it more competitive and efficient in resource use and service delivery (Hood 1995). In the late 1980s and the 1990s certain features of NPM tended to dominate public performance management practice. Halligan (2007:218) refers to the evolution of NPM in terms of generations of reform with the 1980s representing the first generation of reforms and the managerialism of the late 1980s and 1990s the second generation of reforms. Contemporary public management is described as 'integrated governance' and is the third generation of public management reforms. These reforms are taking place globally in different ways and at different paces but nevertheless there is a trend towards radical change in the ways in which central governments manage the implementation of their policies through organisational performance management systems. The rhetoric of integrated governance is that of more effective delivery of public services and successful policy outcomes.
3.4 Christopher Pollitt (2001:933) considers the global convergence of the New Public Management ( NPM) theories of Osborne and Gaebler (2001) to be a 'useful myth'. In 2001 there was little evidence regarding the sustainable benefits of entrepreneurial government but since the late 1990s governments globally have continued to introduce developments that can be broadly classified as being underpinned by the entrepreneurial government/ NPM model. Pollitt's argument is that governments are being influenced to:
- Introduce particular models by trans-global organisations such as the World Bank and the OECD;
- Copy other organisations in other countries;
- Develop generic professional and administrative practices that have been advocated by organisational members following training and continuing professional development which exposes them to what their profession considers 'best practice'.
3.5 Pollitt (2001:938-939) also refers to the distinction between convergence talk, decisions, actions and results, stating that convergence often ends before there are appropriate actions delivering desired results. The stakeholders who benefit from entrepreneurial government/ NPM changes are many and varied and in the late 1990s there was little evidence of effective sustainable entrepreneurial government/ NPM reforms. Pollitt (2001, Ibid) concludes by developing a typology of convergence:
- Type A Same Talk, Decisions, Actions and Results
- Type B Same Talk, Decisions and Actions
- Type C Same Talk and Decisions
- Type D Same Talk
3.6 The evidence from this part of the literature review suggests that global convergence is a consequence of political and economic aspirations for achieving particular outcomes and this is leading to a greater commitment on the part of governments to achieve sustainable results. Thus organisational performance management in government trends are moving towards Type A convergence, particularly amongst those countries broadly classified as the third generation of NPM (Halligan, 2007).
3.7 Given the relatively recent movements across the globe towards outcome focused public policies, the current status of organisational performance management in a government context convergence is Type B with a planned trajectory to Type A. Future monitoring and evaluation studies will impact on the extent to which this trajectory continues to be the preferred option of governments across the globe.
3.8 It is possible to look at and learn from examples of performance management systems in other countries. The United States Government Accountability Office, the Canadian Management Accountability Framework, and the Commonwealth of Virginia Model are outlined below.
The United States Government Accountability Office ( GAO)
3.9 In December 2007 The United States Government Accountability Office ( GAO) published a report entitled 'A Call for Stewardship: Enhancing the Federal Government's Ability to Address Key Fiscal and Other 21 st Century Challenges'. In this report the GAO identifies 13 areas of action to enhance the performance of government departments. The GAO, strongly believes that consistent use of the 13 will help policymakers (1) reach consensus on the outcomes Americans most want their government to achieve, (2) increase transparency and accountability, (3) better prioritize competing demands, (4) make more-informed decisions, and (5) modernize federal operations and management. ( GAO, 207:iii).
The 13 are grouped under four main headings:
- Direction Setting and Performance Measurement;
- Prioritization and Decision Making;
- Information and Transparency; and
- Implementation and Execution.
3.10 Achieving fundamental change in the federal government will require the executive branch to work with Congress and other key stakeholders in the development of long-term goals and strategies to overcome the significant management obstacles that stand in the way of progress. Through the President's Management Agenda and its related initiatives, including the Office of Management and Budget's Program Assessment Rating Tool ( PART), the administration has taken steps in the right direction by calling attention to successes and needed improvements in federal management and performance. The root causes of some persistent problems, including some of the areas identified by GAO (2007) as high risk, stem from outmoded management frameworks or fragmented approaches that require more strategic, systemic, and integrated solutions than can be adequately provided by individual or inter-agency planning efforts.
3.11 GAO provides updates to its list of government programs and operations that it identifies as "high risk" at the start of each new Congress to help in setting congressional oversight agendas.
The Canada Management Accountability Framework ( MAF)
3.12 The Government of Canada committed itself to its core priority of improving the accountability and transparency of government operations. In 2006, the Government of Canada announced that it would renew the expenditure management system, which is the framework for the development and implementation of its spending plans and priorities within the limits established by the budget, to ensure the following:
- Managing for results by establishing clear responsibilities for departments to better define the expected outcomes and actual performance of new and existing programs;
- Decision making for results by ensuring that all new programs are fully and effectively integrated with existing programs by reviewing all spending to ensure efficiency, effectiveness, and ongoing value for money; and
- Reporting for results by improving the quality of departmental and government-wide reporting to Parliament.
3.13 In 2003, the Management Accountability Framework ( MAF) was developed to provide deputy heads and all public service managers with a list of management expectations that reflect the different elements of current management responsibilities (see Appendix III, p37).
3.14 The MAF is intended to be a vision for good management, because it defines the conditions that need to be in place to ensure that government is well-managed and to promote management excellence. The MAF is about strengthening accountability to:
- manage government organizations effectively;
- serve ministers and government; and
- deliver on results to Canadians.
3.15 The MAF consists of 10 essential elements of sound management, followed by a series of indicators and associated measures. It recognises that the role of public service employees is to translate the direction provided by government into results for citizens. The ten essential elements of the MAF are: Public Service Values; Governance and Strategic Directions; Learning, Innovation and Change Management; Results and Performance; Policy and Programs; People; Citizen-focused Service; Risk Management; Stewardship; and Accountability
3.16 Each year, the management results of departments and agencies are assessed by the Treasury Board of Canada Secretariat. The results of the MAF assessments allow for management weaknesses and strengths to be identified and specific management improvement action plans to be developed.
The Commonwealth of Virginia Model
3.17 Virginia is accepted as one of the leading examples of performance-based reform among US states. Hill and Andrews (2005), report on some of the key factors that have helped to ensure that these reforms have established performance as a basis for both budget ritual and budget practice. Virginia's strong record of implementation is explained as the result of a consistent legislative basis for reform, effective reform leadership by a core agency, the integration of results-oriented activities into all facets of the financial management process, a focus on high levels of citizen engagement, and an emphasis on ensuring that performance management systems are tailored to be useful (see Appendix IV, p38).
3.18 Every participating state agency uses one or more service areas under the Commonwealth's newly revised budgeting structure. A service area is an area of expenditure that supports one or more products or services and is the foundation of the Commonwealth's budget structure. A service area can cut across one or more organizational units. For each service area an agency will define one or more objectives. An objective is a description of the results that, when achieved, move an organization toward its stated goals. For each objective an agency will specify one or more performance measures. A performance measure is a specific description of some aspect of a product, service, or activity that can be quantitatively measured and indicates the level of performance. State agencies have established key objectives and measures on which to focus and improve performance management.
3.19 Agency management develops planning tools to help formulate, assign, communicate and achieve agency goals. A Strategic Plan is used to monitor overall performance and make course corrections when needed. A Service Area Plan guides activities and supports performance monitoring through the use of objectives, strategies, and measures. The state budget is based on service areas, which are categories of expenditures that support one or more products or services. The Scorecard reports the effectiveness of state agency management in six critical categories: Human Resource Management; Government Procurement; Financial Management; Technology; Performance Management; and Resource Stewardship. Based on performance in each category, every agency is assigned a colour-coded rating:
3.20 Agency heads rate their agency's performance according to the criteria. Then, annually, the ratings are reviewed by the Cabinet, central agencies, and the Governor. By clicking on a web link to the Management Scorecard, citizens can view the criteria and track how state agencies are performing in critical management categories year-by-year. Performance Management is measured through 4 key performance metrics:
PM1: Strategic Planning
PM2: Communicates Agency Management Performance
PM3: Acts to Correct and Enhance Agency Performance
PM4: Continuity of Operations
3.21 Virginia's performance-based budgeting and management reforms are designed to change both the culture and practice of budgeting and financial management. The Virginia model has been successful partly because of design features in the implementation process that have ensured the reforms are effective, relevant, and enjoy a high level of institutional acceptance. The main factors that have contributed to the implementation success are: a legislative basis for reform; the creation of a core agency to drive the reform process; the emphasis on ensuring reforms facilitates the development of a highly integrated, results-orientated financial management process; ensuring high levels of citizen engagement; and ensuring the performance management systems are tailored to be useful. As a consequence performance management becomes both valuable as a ceremony (accepted socially) and practice (accepted substantially).
3.22 Examples of good practice include the United States Government Accountability Office ( GAO), the Canada Management Accountability Framework ( MAF) and the Virginia Model. The examples from the United States Government Accountability Office and the Canada Management Accountability Framework are extra-organisational performance management. The example from the Commonwealth of Virginia incorporates both extra-organisational and intra-organisational features.
Key points
- There is extensive evidence of global convergence in systems of organisational performance management.
- Differences do exist but are becoming less apparent.
- Systems of extra-organisational performance management that have particular strengths include the United States Government Accountability Office ( GAO) and the Canada Management Accountability Framework ( MAF).
- The Commonwealth of Virginia system 'Virginia Performs' has excellent intra-organisational, and extra-organisational performance management features.
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