Managing performance: international and national trends

FORUM AP, Roma, May 17th 2012

Professor Geert Bouckaert

Managing performance: international and national trends

1.PI:Do we focus on the right things?

2.PI: Responsibility versus accountability

3.PI: Are we ready or not?

4.PI:Trust good versus distrust bad PIs

5.PI: Costs versus Benefits

6.PI: Supply versus Demand

7.PI: Use versus non-use (or abuse)

3

1.Performance and Focus

Inp u t O u tp u tA c tiv ity

O b je c tiv e s

E ffe c t

N e e d s

T ru s t

1.inp ut/inp ut: ec o no m y2.inp ut/o utp ut: effic ienc y/p ro d uc tivity3.o utp ut/effec t: effec tivenes s4.inp ut/effec t: c o s t-effec tivenes s5.effec t/trus t6.o utp ut/trus t7.inp ut/trus t

7

6

5

4

321

E nv iro nm e nt

1.Performance and Focus

Performance: What is our focus? And Why?

-the urgent or the important

-responsibility versus accountability

-depends on where you stand

Different PIs for different purposes

2.PI: Responsibility versus Accountability

R E S P O N S IB IL IT YR E S P O N S IB IL IT Y

W E A K S T R O N G

N OA C C O U N T A B IL IT Y

A C C O U N T A B IL IT YW E A K

S T R O N G

A

C 1

C 2

D 1 D 2

D 3 D 4

B 1 B 2

Macro-level

Meso-level

Micro-level

Input Activity Output Effect/Outcome Trust

Input Activity Output Effect/Outcome Trust

Input Activity Output Effect/Outcome Trust

2.PI: Responsibility versus Accountability

ExecutivePoliticians

LegislativePoliticians

Citizen/CustomerAdministration

(1)

(2)(3)

(4)

(5)(6)

2.PI: Responsibility versus Accountability

New or renewed instruments•1 Performance budgets and performance audits•2.General Citizen Charter•3.Contracts•4.Specific charters, SLA, surveys (satisfaction)•5.Hearings around contracts and performance•6.Ombud

2.PI: Responsibility versus Accountability

3.PI: Are we ready, or not?

• Performance administration

• Managements of performances

• Performance management

• Performance governance

3.PI: Are we ready, or not?

• Organisational readiness checklist

3.PI: Are we ready, or not?

Performance Administration

Managements of Performances

Performance Management

Performance Governance

Measurement

Incorporation

Use/non-use

3.PI: Are we ready, or not?

MANAGEMENT BY INDICATORS REQUIRES INDICATOR MANAGEMENT

-Guarantee Measurement + Incorporation + Use

-Watch Costs and Benefits

-Match Supply and Demand

13

4.PI: Trust good versus distrust bad PIs

Legitimacy

Technical Features

(Validity & Reliability

Functionality

1

4

7

3

2

6

8

5

14

F u n ctio n a lity

L e g itima cy

T e ch n ica l fe a tu re s:va lid ity a n d re lia b ility

o p timu m

1

1

1

0

A

B

C

4.PI: Trust good versus distrust bad PIs

15

1. Where are you now? (A)

2. Where would you like to be? (B)

3. How to get from A to B

4.PI: Trust good versus distrust bad PIs

• Selected

• Discussed

• Scored

• Evaluated

4.PI: Trust good versus distrust bad PIs

1. Whole of government indicators (means)

0

1

2

3

4

5

0 1 2 3 4 5Utility

Feasib

ilit

y

Indicator 1Indicator 2Indicator 3Indicator 4Indicator 5Indicator 6Indicator 7Indicator 8Indicator 9Indicator 10Indicator 11Indicator 12Indicator 13Indicator 14Indicator 15

4.PI: Trust good versus distrust bad PIs

5.PI: costs versus benefits

WHY IS THE OBVIOUS NOT SO OBVIOUS?

CBA of Indicators:Costs: creating, transferring, collecting, processing, storing,

making available, …

Benefits: comparing, registering change, improved decisions, better allocations, transparency, responsibility/accountability, learning, ...

5.PI: costs versus benefits

ASSYMETRIES OF COSTS AND BENEFITS

COST:

Unconditional, immediate, undisputable, tangible

BENEFITS:

Conditional, not (always) immediate, disputable, intangible

Different Costs and different benefits for different actors

5.PI: costs versus benefits

HOW TO CREATE A POSITIVE CBA?

-Reducing costs:

-Economy of providing and generating data

-Increasing Benefits:

-Increase level of needs/use (more demand);

-Avoid non-use (or abuse)

-Expand depth and scope (more supply)

6.PI: Supply versus Demand

Bouckaert & Halligan (2008) Managing Performance, International Comparisons, Routledge, London, p. 113.

6.PI: Supply versus Demand

HOW TO AVOID ZONES OF FRUSTRATION AND MISMATCH?

-Shifting from supply (availability) feeding demand (needs)

to demand generating supply

-Organising demand (problem driven: savings, capacity, quality, legitimacy, flexibility, mobility, …)

7.PI: Use versus Non-Use

• Incorporate

• Types of use: soft versus hard

• Context of use

• INCORPORATION

-Policy cycle

-Financial cycle

-Contract cycle

(St rat egic)p lan Evaluat ion

Monit oring

Feedback

Feedback

Evaluat ioncont ract

Implement ingcont ract

Designcont ract

Pol icy cycle

Cont ract Cycle

Feedback

Audit

Account ancy

Budget

Financial Cycle

Van Dooren Wouter, Geert Bouckaert, John Halligan (2010) Performance Management in the Public Sector. Routledge: London, p. 85.

• USE

-To learn

-To steer and control

-To give account

To learn To steer&control To give account

Key question How to improve policy or

management?

How to steer and

control activities?

How to communicate

performance?

Focus Internal Internal External

Orientation Change/future Control/present Survival/past

Exemplary

Instruments

Strategic planning,

benchmarking, risk analysis,

business process reengineering

Monitors and

management

scorecards,

performance pay,

performance budgeting

league tables, citizen

charters and annual

reporting, performance

contracts

Van Dooren Wouter, Geert Bouckaert, John Halligan (2010) Performance Management in the Public Sector. Routledge: London, pp. 101.

7.PI: Use versus Non-Use

HARD OR SOFT USE?

Van Dooren Wouter, Geert Bouckaert, John Halligan (2010) Performance Management in the Public Sector. Routledge: London, p.103.

27

7.PI: Use versus Non-UseContext of use

Q

t

O

I

(1 )Q

t

O

I

( 2 )

28

7.PI: Use versus Non-Use

Q

t

O

I

( 3 ) Q

t

O

I

Q m in

( 4 ) Q

t

O

I

Q m ax

( 5 )

7.PI: Use versus Non-Use

REASONS FOR NON-USE

-Insufficient quality-Psychological barriers: satisficing and bounded rationality-Cultural barriers: entrepreneurial vs bureaucratic; egalitarian vs

hierarchical-Institutional: balance of power; balance of professions

CONSEQUENCES OF NON-USE

-Over-claiming ‘best practices’-Weak institutional memories

7.PI: Use versus Non-Use

EFFECTS OF USING INDICATORS

-Functional behavioural effects:-Learning and Innovation-Steering and Control-Responsibility and Accountability

-Dysfunctional behavioural effects:

-Conditionality for functional and dysfunctional effects

1.PI:Do we focus on the right things?

2.PI: Responsibility versus accountability

3.PI: Are we ready or not?

4.PI:Trust good versus distrust bad PIs

5.PI: Costs versus Benefits

6.PI: Supply versus Demand

7.PI: Use versus non-use (or abuse)

SOME REFERENCES

• Bouckaert Geert, Halligan John (2008) Managing performance, International comparisons. Routledge, London, 440 p.

• OECD (2009) Measuring Government Activity. OECD, Paris (Edited by Christopher Pollitt, Geert Bouckaert, and Wouter Van Dooren), pp. 130.

• Pollitt Christopher, Bouckaert Geert (2011, 3rd expanded ed.) Public Management Reform. Oxford University Press, Oxford, pp. 367,

• Van Dooren Wouter, Geert Bouckaert, John Halligan (2010) Performance Management in the Public Sector. Routledge: London, pp. 208

K.U.Leuven

Public Management InstituteParkstraat 45 bus 3609

B-3000 Leuven

Belgium

0032 16 32 32 70

io@soc.kuleuven.be

www.publicmanagement.be

Further information