Challenges in Measuring Performance Management in the Public Sector - Coursework Example

How and to What Extent Performance Management in the Public Sector Has Changed Under Contemporary Managerial Reforms? Identify and Examine the Challenges in Measuring Performance of Public Organisations and Their Implications Name: University: Course Title: Instructor: Date of Submission: 1.0 Introduction The contemporary political, social and economic climate is characterised by an escalating demand from public funders and stakeholders for indications of achievements and impacts (Kendall and Knapp, 2000, p.105). Van Dooren, Bouckaert and Hilligan (2010, p.3) posit that the concept of performance in public organizations is an intentional behaviour by public organizations to achieve success. There are various dimensions to performance management in public organizations some of which include value judgement, and quality of achievements. According to Heinrich (2002, p.712), the increasing performance management activities in the public sector imply the increasing need for both accountability and effectiveness at all the levels of government. However, research on public sector performance management also depicts significant challenges systems of performance measurements as policy tools for enhancing accountability and performance in public organizations (Heinrich, 2002, p.712). This paper seeks to investigate how and to what extent performance management in the public sector has changed under contemporary managerial reforms. Additionally, this paper shall identify and examine the challenges in measuring performance of public organizations and their implications. 2.0 How and To What Extent the Performance Management in the Public Sector Has Changed Under Contemporary Managerial Reforms 2.1 The Theory of Contemporary Managerial Reforms There are various initiatives which have influenced performance management in the public sector. One such initiatives revolve around what is referred to as the New Public Management (NPM) (Heinrich, 2002, p.712). However, due to inefficiencies encountered with this model, other initiatives have also arisen some of which include public value and whole-of-government (WoG) initiatives. Despite the rise of these new public sector performance management initiatives, the bottom line is that they all converge at structural and organizational decentralization; single/one-purpose public organizations; as well as management of performance of public organizations (Christensen and Laegreid, 2007, p.1059). 2.2 The Trends of Contemporary Managerial reforms in the Public Sector Contemporary managerial reforms in various OECD countries as well as elsewhere around the globe have revolved around the following trends (Rose, 1999). Firstly, restructuring of the public sector which has been spearheaded by management techniques and practices such as review and restructuring of public organizations, privatization, decentralization, establishment of executive agencies, corporatization (World Bank, n.d, p.1 to 5). Secondly, reforms in financial management and budgetary allocations. These reforms have changed the performance management in the public sector through facilitating fiscal/financial decentralization, new systems of budgeting, adoption of more efficient expenditure control mechanisms, as well as fostering public organizations performance auditing (value for money) ((World Bank, n.d, p.1 to 5; Ling, 2002, p.615). Thirdly are the reforms in the management of human/workforce resources. This has been achieved via the adoption of new systems of managing human resources performance, reclassification of services provided by public organizations, payment, rewards and promotion based on performance, lateral employee entry and contract-based appointments, as well as the establishment of senior executive services (Heinrich, 2002, p.712). Finally are the reforms in public service delivery. In order to achieve these objective, OECD member countries such as Australia, the UK and New Zealand among others have emphasized public-private partnerships (PPP) in service delivery; simplified regulations, procedures and rules; service charters; high standards if quality in public services provision; the use of information communication technology and electronic services; one-stop service counters; as well as consumer/client orientation in public service provision (World Bank, n.d, p.1 to 5). 2.2 How and The Extent to Which Contemporary Managerial Reforms Have Changed Public Sector Performance Management Traditionally, the public sector was characterised by massive inefficiencies and ineffectiveness and this generated adverse public attitude as well as increasing criticism. Old public organizations exhibited poor delivery of public services; bureaucratic organizational arrangements; slow operations driven by redundant rules rather than performance; as well as unresponsive and inefficient users. Two themes arise from contemporary managerial reforms. The first theme/idea derives from managerialism which emphasizes effective management techniques and practices in the public organizations. These include decentralization; public sector downsizing; desegregation; leaner and flexible structures and systems of public organizations; as well as enhancing managers freedom to manage. The second theme/idea is concerned with contemporary economics of institutions which prioritize market mechanisms such as consumer orientation; user fees; vouchers, franchising, contracting out, as well as internal markets to enhance delivery of public services and give voice and choice to users (World Bank, n.d, p.2 and 3). Contemporary managerial reforms in the public sector are ideally/basically concerned with rethinking and reshaping the role of public organizations; restructuring and repositioning the public/government sector; redesigning and enhancing the level of service delivery by public organizations; reframing/reinventing performance management and measurement systems; and revitalizing the capacity of human workforce and the performance of public organizations (Ling, 2002, p.615; World Bank, n.d, p.3). The idea of NPM has been a significant performance management technique in the public sector of countries such as Australia, the UK and New Zealand among others. Such countries together with transitional and developing economies have for the last couple of decades adopted the management practices and techniques associated with the private-for-profit as well as market sectors to reform their administration and management. The trends of contemporary managerial reforms popularly referred to as NPM has been subject to a combination of a number of change oriented pressures (Ling, 2002, p.615). These pressures include: economic and fiscal pressures, negative public attitudes and increasing criticism of the public sector; resurgence of a new era of political rights especially in the late 1970s and 1980s; extensive proliferation of new management ideas; globalization of markets; advancement in information communication technology; and finally, donor lending conditions and advocacy for accountability and effectiveness for transitional and developing economies (Rose, 1999). For instance, one of the change oriented pressure on the public sector is economic and fiscal pressures which arise from exorbitant public sector financial/fiscal deficits; rapidly rising levels of indebtedness; as well as massive external trade imbalances. In response, the public sector in countries such as Australia, New Zealand and the UK pioneered issues of privatization, downsizing as well as contracting with the objective of responding to massive fiscal/financial deficits and restructuring public organizations (Rose, 1999, p.64). Contemporary managerial reforms in the public sector emphasize decentralization within the public services. Under contemporary managerial reforms, governments are to break up huge bureaucracies (Van Dooren, Bouckaert and Hilligan, 2010, p.3). This is via disaggregating separable and distinct public organizations functions into separate agencies and may involve removing operational arms or rather departments of government ministries to establish separate/distinct agencies (Rose, 1999). In the UK for instance, executive agencies are established from parent ministries, a few privatised while others reabsorbed into parent government ministries/departments. In New Zealand, policy functions were separated from the country’s operational agencies as a crucial step towards privatization of such functions. The implication for the decentralization is that it enhances performance management through providing capacity to not only develop procedures for monitoring and inspection, but also performance indicators, measures, as well as systems for controlling budgets within public organizations. Additionally, performance management is enhanced through the capacity to effectively coordinate the activities of separate/decentralized government agencies (Ling, 2002, p.615 and 616). The contemporary managerial reforms have changed performance management in public organizations through replacing the old “tall hierarchies” with flexible, flatter as well as more responsive organizational structures (Ling, 2002; Page, 2005, p.238). These structures and systems are reformed with regard to specific functional processes whose outcomes are easily measurable. The extent of performance management in public organizations have also changers under contemporary NPM idea which emphasize clear separation of organizational functions such as funding, purchasing, as well as service provision. This is a case of separating organizational and financial functions. For instance, government may provide funds for the provision of public services without necessarily having to provide such public services by themselves. The government can contract-out the provision of such public services to the private sector. This makes it easy to manage the performance of the service provider by the government as well as other stakeholders (World Bank, n.d, p4). Contemporary managerial reforms emphasize performance by shifting to more output orientation. The shift occurs from inputs and processes to control and accountability mechanisms of outputs. In this regard, performance measurement is enhanced via emphasis on allocation of resources and rewards (Ling, 2002). This is achieved via making payments based on performance, and employing the use of performance agreements. Managers in public organizations must achieve performance indicators, targets as well as output objectives to be considered effective. These management techniques and practices in the public sector enhance flexibility as performance management is all about effectiveness and accountability in service delivery (Van Dooren, Bouckaert and Hilligan, 2010, p.3). This is the reason as to why responsive service delivery by the public sector has remained a prominent agenda of most countries across the globe. In Ghana for instance consumer surveys handled by public complaints units are used in all ministries. In some regions in India, service report cards are used to evaluate public service providers. The UK uses established charters (the UK Citizen Charter) whereas Singapore established Service Improvement Unit mandated with the responsibility of investigating and responding to public service users complaints MAC, 2004). 3.0 The Challenges in Measuring Performance of Public Organisations and Their Implications 3.1 The Challenges According to Australian Public Service Commission (n.d), despite significant contemporary initiatives in performance management in public organizations, their implementation and effectiveness is still faced by the enormous amount of challenges. The implication of these challenges is that leaders and administrators must facilitate more integration and collaboration in the public sector (Ling, 2002). Initiatives like WoG adopted by countries such as the US are also facing difficulties becoming crucial tools in performance management. These emerged after NPM faced significant criticism due to enormous challenges in revamping the public sectors of the pioneering countries like Australia, New Zealand and the UK. Measuring the performance of public organizations is hindered by the fact that some of the contemporary managerial initiatives in performance management and measurement are way too ineffective and complex (Christensen and Laegreid, 2007, p.1063). Approaches in measuring performance include: comparing performance; targets and rankings; balanced scorecard; cost/benefit analysis. Adoption of different approaches/strategies towards enhancing public sector performance management and measurement have led to contradictory forces pulling in different directions. This hinders effective performance management and measurement in the public sector organizations. While NPM initiatives emphasize decentralized decision making in public organizations, central governments still strengthen their capacity in coordinating public policy development and execution MAC, 2004). According to Ling (2002, p.615), the advocacy and implementation of competing strategies in adopting contemporary managerial initiatives in a public sector organization jeopardize both the reform agenda; and performance management and measurement in public sector organizations. As a result, the contemporary reform agenda in the public sector organizations turns out to not only as somewhat fluid, but also contested. This generates significant challenge to performance measurement in public sector organizations (Ling, 2002). According to World Bank (n.d, p.7), developing countries apply contemporary managerial reforms in the context of public organizational structural adjustments. One key challenge to measuring the effectiveness and accountability of such performance management initiatives is lack of political will and support from the government, as well as the reforming public organizations. This can be attributed to the enormous pressure arsing from external agencies such as the donors and lending agencies like the World Bank and the IMF. This is because despite having limited knowledge as well as short term commitment for reforms, external agencies as well as experts on institutional and organizational reforms have significant influence on the content as well as the design of reforms in the developing countries (Australian Public Service Commission, n.d). Lack of mature public service in most countries especially in the developing world is another key challenge to performance measuring of public organizations. The implication of this challenge is that adapting and implementing contemporary managerial reform initiatives must be conducted in a realistic and creative manner. As such, non-implementable blueprints on public sector reforms must not be blindly followed (Manning, 2001, p.298; World Bank, n.d, p.8). Christensen and Laegreid (2007, p.1063) postulate that ensuring balance between vertical accountability, horizontal accountability, and downward responsiveness is a crucial challenge in performance management and measurement in public organizations. This is more so due to the fact that specialization and division of labour are prominent and inevitable elements of modern day organizations. In addition, working horizontally as emphasized by contemporary initiatives in public sector such as whole-of-government are resource and time consuming initiatives (Manning, 2001, p.298). 3.2 The Implications of the Challenges and how to Overcome Them Before rolling out reform agenda for a country’s public sector, it is crucial to gauge the capacity, state as well as the level preparedness for public sector reforms on the part of the government and the reforming public organizations. Therefore, it is crucial to introduce public sector reforms in a sequential manner. In this manner, the measurement of performance will be enhanced and will facilitate the availability of the preconditions of a given element of contemporary reform initiatives prior to the introduction of another level of reform initiatives in public organizations. For instance, having in place an effective management information system prior to the introduction of human resource management reforms such as payment based on performance and performance agreements/contracts would significantly enhance performance management and measurement in public organizations (World Bank, n.d, p.8). On lack of political will and support from the government, as well as the reforming public organizations as a challenge, the implication that the government, the reforming institutions and external agencies and experts must emphasize local involvement/participation, understanding as well as commitment to enhance the success of performance measurement of public organizations (MAC, 2004). In addition, publicity and education on the significance of public sector managerial reforms significantly enhance acceptance and understanding among stakeholders and hence facilitating measurement of performance of the reforming public organizations (Manning, 2001, p.298). With regard to ensuring balance between vertical accountability, horizontal accountability, and downward responsiveness challenge, the implication is that there is need for neutral administrative techniques, accountability, legitimacy, trust, as well as power relations as fundamental political principles the management of public organizations. In essence, the effectiveness of performance management and measurement in public organizations is subject to fundamental changes in structural arrangements, accountability systems, as well as dominant cultures in public organizations (Christensen and Laegreid, 2007, p.1063). Public sector organizations are characterised by minimal collaborative practices in their working. This implies that more collaboration is essential for successful performance management and measurement of the public sector organizations. In essence, Page (2005, p.238) argues that the notion of “one-size fits-all” in public organizations jeopardises performance management and measurement. A study conducted in Canada recommended that some contemporary public sector management initiatives such as horizontal management initiatives/arrangements should be subjected to cost estimation and careful thought prior to their implementation (Page, 2005, p.238). For instance, it may be beneficial for government departments working on a similar policy to engage in competition and rivalry rather than cooperation. In this way measuring the performance of such government departments becomes easy. 4.0 Conclusion The purpose of this paper was to investigate how and to what extent performance management in the public sector has changed under contemporary managerial reforms. Additionally, this paper also sought to identify and examine the challenges in measuring performance of public organisations and their implications. An enormous body of research depicts that contemporary managerial reform initiatives have significantly changed performance management and measurement in the public sector organizations. Some of the public sector organization management initiatives which have been implemented by the OECD countries, developing countries and other countries of the world include NPM, WoG initiatives and public value initiatives. However, their implementation and effectiveness is still faced by the enormous amount of challenges. These challenges demonstrate significantly important implication to the governments as well as reforming the public sector institutions. 5.0 Bibliography Australian Public Service Commission. N.d. Leading and Shaping a Unified, High Performance APS. [Accessed June 11, 2013]. Available at: http://www.apsc.gov.au/publications-and-media/archived-publications/publications-archive/history-of-reform Christensen, T. and Laegrreid, P. 2007, “The Whole-of-Government Approach to Public Sector Reform.” Public Administration Review, November/December 2007, pp. 1059-1066. Heinrich, C.J. 2002, “Outcomes-based Performance Management in the Public Sector: Implications for Government Accountability and effectiveness.” Public Administration Review, 62(6), pp. 712-725. Kendall, J. and Knapp, M. 2000, “Measuring the Performance of Voluntary Organizations.” Public Management, 2(1), pp. 105-132. Ling , T. 2002, “Delivering Joined-Up Government in the UK: Dimensions, Issues and Problems.” Public Administration, 80(4), pp. 615-42. Management Advisory Committee (MAC). 2004, Connecting Government: Whole of Government Responses to Australia’s Priority Challenges. Canberra: Commonwealth of Australia. Manning, N. 2001, “The Legacy of New Public Management in developing countries.” International Review of Administrative Sciences, 62(2), pp. 297-312. Page , E. 2005, Joined-Up Government and the Civil Service . In “Joined-Up Government”, edited by Vernon Bogdanor, Oxford, Oxford University Press. Rose, A. 1999, “The Role of Administrative Review Bodies,” Australian Journal of Public Administration, 58(1), pp. 64-74. Van Dooren, W., Bouckaert, G. and Halligan, J. 2010, Performance Management in the Public Sector, Abingdon, Routledge. World Bank. N.d. Overview of Public Sector Management Reform. [Accessed June 11, 2013]. Available at: http://siteresources.worldbank.org/INTROADSHIGHWAYS/Resources/338993-1115316483571/3-public_sector_mgmnt_reform.pdf Read More