Performance management in the public sector

Abstract

Tackling the key topics of reform and modernization, this important new book systematically examines performance in public management systems. The authors present this seminal subject in an informative and accessible manner, tackling some of the most important themes.

Performance Management in the Public Sector takes as its point of departure a broad definition of performance to redefine major and basic mechanisms in public administration, both theoretically and in practice. The book situates performance in some of the current public management debates; discusses the many definitions of ‘performance’ and how it has become one of the contested agendas of public management; examines measurement, incorporation and use of performance information; and explores the challenges and future directions of performance management.

A must-read for any student or practitioner of public management, this core text will prove invaluable to anyone wanting to improve their understanding of performance management in the public sector.

Full text

Performance Management
in the Public Sector
Tackling the key topics of reform and modernization, this important new book
systematically examines performance in public management systems. The authors present
this seminal subject in an informative and accessible manner, tackling some of the most
important themes.
Performance Management in the Public Sector takes as its point of departure a broad
definition of performance to redefine major and basic mechanisms in public admini-
stration, both theoretically and in practice. The book:
■situates performance in some of the current public management debates;
■discusses the many definitions of ‘performance’ and how it has become one of the
contested agendas of public management;
■examines measurement, incorporation and use of performance information; and
■explores the challenges and future directions of performance management.
A must-read for any student or practitioner of public management, this core text will
prove invaluable to anyone wanting to improve their understanding of performance
management in the public sector.
Wouter Van Dooren is Assistant Professor of Public Administration at the Department
of Political Science, University of Antwerp, Belgium, and Research Fellow at the Public
Management Institute at the Katholieke Universiteit Leuven, Belgium. He researches
performance measurement and management.
Geert Bouckaert is Director and Professor of Public Management at the Public
Management Institute at the Katholieke Universiteit Leuven, Belgium. He is President of
the European Group for Public Administration and he researches performance manage-
ment, financial management and public sector reform.
John Halligan is Research Professor of Government and Public Administration at the
University of Canberra, Australia. His research interests are comparative public
governance and management, performance management and public sector reform.
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ROUTLEDGE MASTERS IN PUBLIC MANAGEMENT
Edited by Stephen P Osborne, Owen Hughes, Walter Kickert
Routledge Masters in Public Management series is an integrated set of texts. It is intended
to form the backbone for the holistic study of the theory and practice of public management
as part of:
■a taught Masters, MBA or MPA course at a university or college;
■a work-based, in-service, programme of education and training; or
■a programme of self-guided study.
Each volume stands alone in its treatment of its topic, whether it be strategic management,
marketing or procurement, and is co-authored by leading specialists in their field.
However, all volumes in the series share both a common pedagogy and a common approach
to the structure of the text. Key features of all volumes in the series include:
■a critical approach to combining theory with practice which educates its reader,
rather than solely teaching him/her a set of skills;
■clear learning objectives for each chapter;
■the use of figures, tables and boxes to highlight key ideas, concepts and skills;
■an annotated bibliography, guiding students in their further reading; and
■a dedicated case study in the topic of each volume, to serve as a focus for
discussion and learning.
Managing Change and Innovation in Public Service Organizations
Stephen P. Osborne and Kerry Brown
Risk and Crisis Management in the Public Sector
Lynn T. Drennan and Allan McConnell
Contracting for Public Services
Carsten Greve
Performance Management in the Public Sector
Wouter Van Dooren, Geert Bouckaert and John Halligan
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Performance
Management in
the Public Sector
Wouter Van Dooren,
Geert Bouckaert and
John Halligan
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First published 2010
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
Simultaneously published in the USA and Canada
by Routledge
270 Madison Avenue, New York, NY 10016
Routledge is an imprint of the Taylor & Francis Group, an Informa business
© 2010 Wouter Van Dooren, Geert Bouckaert & John Halligan
Typeset in Bell Gothic and Perpetua
by Keystroke, Tettenhall, Wolverhampton
Printed and bound in Great Britain
by [TO FOLLOW]
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in any
information storage or retrieval system, without permission in writing from the
publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Dooren, Wouter van.
Performance management in the public sector / Wouter Van Dooren, Geert
Bouckaert and John Halligan.
p. cm.
Includes bibliographical references and index.
1. Government productivity—Evaluation. 2. Performance—Management.
3. Public administration. I. Bouckaert, Geert. II. Halligan, John, 1941–
III. Title.
JF1525.P67D66 2010
352.6′6—dc22 2009045304
ISBN 13: 978–0–415–37104–9 (hbk)
ISBN 13: 978–0–415–37105–6 (pbk)
ISBN 13: 978–0–203–03080–6 (ebk)
ISBN 10: 0–415–37104–X (hbk)
ISBN 10: 0–415–37105–8 (pbk)
ISBN 10: 0–203–03080–X (ebk)
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Contents
List of figures, tables and boxes 000
1 Introduction 00
2 Defining the concepts 00
3 The history of performance management 00
4 Performance measurement 00
5 Incorporation of performance information 00
6 The use of performance information 00
7 Users 00
8 Non-use 00
9 The effects of using performance information 00
10 The future of performance management 00
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Figures, tables and boxes
FIGURES
1.1 Measurement, incorporation, use 00
1.2 Outline of the book 00
2.1 The production model of performance 00
2.2 Allocative and technical efficiency for input and output efficiency
(based on De Borger and Kerstens 1995) 00
2.3 Two visions on the relation between public values and public
performance 00
2.4 Macro, meso and micro performance in a complex nested configuration 00
2.5 Hackman and Oldham (1980)’s analysis of measurability 00
4.1 An ideal-typical model of the performance measurement process 00
4.2 The length of the British Coastline (source wikipedia, GNU licence) 00
4.3 Outcomes in accountability relations (translated from Bouckaert,
Van Dooren and Sterck 2003) 00
5.1 Incorporating performance information: the policy cycle 00
5.2 Incorporating performance information: policy and control cycle, and
financial cycle 00
5.3 Incorporating performance information: policy, financial, and contract
cycle 00
5.4 The dynamics of incorporating performance information 00
6.1 Loose and tight coupling of performance information and judgement 00
6.2 Assessing the nature of use of performance information 00
7.1 An example of variation of MPs’ use of performance information
across sectors (Van Dooren 2004) (taken from an article in Public
Management Review, a Routledge Journal) 00
8.1 The group-grid scheme of culture 00
9.1 Effects of the use of performance information (Van Dooren 2006) 00
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9.2 Performance target paradox – the tendency towards target 00
9.3 Central thesis of conditionality: use determines effects 00
TABLES
1.1 Four perspectives on how performance is understood (based on
Dubnick 2005) 00
2.1 Downs’ structural characteristics of bureaus and the implications
for measurability 00
2.2 Wilson’s (1989) typology of organizations 00
2.3 Blankart’s (1987) clusters of services 00
2.4 Three clusters of performance management 00
2.5 Max Weber’s types of authority as alternatives to performance
management 00
3.1 US performance budgeting initiatives (based on General Accounting
Office 1997) 00
3.2 Performance movements in the 20th century 00
4.1 Definition of the measurement object 00
4.2 Single and ratio indicators 00
4.3 Advantages and disadvantages of different data sources 00
4.4 Foundations for targets 00
4.5 An illustration of breakouts and aggregation of data 00
4.6 Reliability and validity 00
5.1 Adoption and implementation; four profiles (Van Dooren 2005) 00
5.2 Four key questions and the capacity to provide answers 00
6.1 The uses of performance information in policy and management practice 00
6.2 Three uses of performance information 00
6.3 Assessing the impact of performance judgements 00
6.4 Criteria for targeting measurement efforts on their foreseen uses 00
6.5 Which indicators for which use? 00
6.6 Differentiation of the data sources according to the purpose of
performance information 00
6.7 Differentiation of the choice of analysis technique according to the
purpose of performance information 00
6.8 Differentiation of the reporting format according to the purpose of
performance information 00
6.9 Differentiation of the quality dimensions according to the purpose 00
7.1 Users and their uses of performance information 00
8.1 Truth and utility tests of new information (based on (Weiss and
Bucuvalas 1980) 00
8.2 Alignment scenarios and the use of performance information 00
FIGURES, TABLES AND BOXES
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8.3 Rational decision making according to Simon 00
9.1 One of Rugg’s (1941) experiments on wording survey questions 00
9.2 Incentives based on accountability for results (based on OECD 2008:
p.174) 00
9.3 Constraints and counteracting strategies for dysfunctional behaviour 00
10.1 Rethinking the assumptions of the performance movement (based on
Radin 2006: pp.241–2) 00
10.2 Alternatives for performance-based accountability 00
BOXES
1.1 Only results matter (taken from Hatry 1999) 00
1.2 Performance and public management reform – some key texts 00
1.3 The difference between performance measurement and evaluation 00
2.1 Output as transaction or as provision (OECD 2009) 00
2.2 Production model of performance applied to the issue of traffic casualties 00
2.3 Inventories of public values 00
2.4 Measuring the quality of policy advice 00
3.1 The science of administration and scientific management 00
4.1 The risk of concept reduction (Etzioni and Lehman 1967: pp.8–9) 00
4.2 Indicators need to be precisely defined and easy to understand – a
balancing act 00
4.3 OECD criteria for constructing composite indicators (OECD 2009) 00
4.4 Target groups of performance reporting 00
4.5 Formats of performance reporting 00
5.1 Incorporation and use and the related concepts of adoption and
implementation 00
5.2 Being in control; the metaphor of driving a car 00
5.3 Assessing controlling capacity 00
5.4 Better management through accrual accounting? 00
5.5 The case of culture and arts in West Australia: Resource Agreement 00
5.6 The case of the UK British Museum: Funding Agreement 00
5.7 The case of the National Gallery of Australia: Budget Outcomes and
Performance Information 00
5.8 Examples of performance audits 00
7.1 Use of performance information in management activities 00
7.2 Models of public engagement in performance measurement (Ho 2007) 00
7.3 Posing for the Swimsuit Issue (Best 2004: p.120) 00
7.4 Citizen-driven performance measurement 00
8.1 Some survey evidence on use and non-use (findings from Berman and
Wang 2000) 00
FIGURES, TABLES AND BOXES
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8.2 Non-use or use under the radar? Decoupling of indicators and goals 00
8.3 Performance information and institutional readiness 00
9.1 Quality criteria for providers of benchmarks according to the Dutch
local government association (VNG) 00
9.2 Mayor Rudolph Giuliani on CompStat (quoted in O’Connell 2001: p.9) 00
9.3 Too many indicators? The case of the Lisbon process in the European
Union 00
9.4 English Exceptionalism according to Candide (Voltaire 2006) 00
10.1 A machine-based view on performance management 00
FIGURES, TABLES AND BOXES
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1
Chapter 1
Introduction
DISCUSSION QUESTIONS
1 What does it mean when somebody claims an organization (e.g. a railway
company, a municipality, a police department) is performing?
2 Is performance the ‘nec plus ultra’ of public administration? Why then is it
contested?
KEY POINTS
■The concept of performance has many meanings, which can be classified
based on the value judgements they imply.
■Performance is not only a concept, but also a contested agenda of change
which calls for a balanced treatment of the issue.
■A clear distinction between measurement, incorporation and use of
performance information is vital.
■Performance management is embedded in debates of reform, management
and policy.
LEARNING OBJECTIVES
■To be able to position the performance debate in contemporary public
administration; public sector reform, public management and public policy.
■To understand the controversy around performance management.
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The subject of this book is the core of public management, certainly in its New Public
Management (NPM) form: is it possible to envisage management in the public sector
without due regard to the pursuit of results and the measurement of performance?
Nevertheless performance management lacks a coherent treatment that explicates its
significance, analyses its several dimensions as a working system, compares its application
internationally, and challenges its shortcomings. The purpose of this book is to develop
this comprehensive understanding of performance management as a concept and
phenomenon that has swept through OECD (Organization for Economic Co-operation
and Development) countries, to examine how it has been applied in practice and to
review the relationship to public management and public policy.
The aim of this first, introductory chapter is to situate performance, performance
measurement and performance management in some of the current debates in public
management. We discuss the many meanings of the word ‘performance’ and how it has
become one of the main but contested agendas in public administration. We also
introduce the sequence of measurement, incorporation and use of performance
information, which reflects the structure of the book. We finally argue that performance
measurement has become pivotal not only in reform, but also in daily public manage-
ment and policy making. We end the chapter with an outline of the book and sum-
maries of the chapters. The discussions are deliberately sketchy since we primarily
want to outline the relevance and controversies surrounding the performance debate.
We will seek more definitional precision in the next chapter.
1 PERFORMANCE AS A CONCEPT
In many public sectors, performance is the talk of town. As with many much-debated
concepts, performance accumulates multiple and often ambiguous meanings. Dubnick
(2005) asserts that:
outside of any specific context, performance can be associated with a range of actions
from the simple and mundane act of opening a car door, to the staging of an elaborate
reenactment of the Broadway musical ‘Chicago’. In all these forms, performance
stands in distinction from mere “behavior” in implying some degree of intent.
(p.391)
In science, connotations vary according to disciplines. For example, psychology, social
sciences and managerial sciences use different definitions depending more on individual,
or societal, or organizational and system performance. Clearly, performance has many
meanings and our task is to characterize this variation.
From Dubnick’s observations of car doors and musicals, we can infer a universal
definitional ingredient. Performance is about intentional behaviour, which can be
individual or organizational. Based on this understanding of performance as deliberate
PERFORMANCE MANAGEMENT IN THE PUBLIC SECTOR
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action, a classification of performance perspectives can be built. The two dimensions in
Table 1.1 reflect the importance that a perspective attaches to quality of performance;
does a definition imply a statement on whether performance is good or bad? Quality is
either (a) the quality of the actions being performed, or (b) the quality of what has been
achieved because of those actions. This allows distinguishing between four perspectives
on performance.
The first perspective of performance focuses the attention on tasks being carried
out by the performing agent (P1). Performance then includes all actions that are
performed. A police patrol, a vaccination campaign, a medical treatment, teaching a
course, judging in courts, all are examples of performances, indifferent from whether
they were successful. Performance is intentional behaviour of government actors. As
such, this conceptualization is relatively neutral in nature, but also very broad.
The other dimensions of the concept ‘performance’ contain a value judgement.
Performance has a quality that can be either high or low. First, when performance is
about the quality of the actions, and not as much about the quality of the achievements,
performance is conceptualized as competence or capacity (P2). Under the assumption that
a highly competent performer will be more likely to generate more and better quality
output from an activity most of the time, performance becomes associated with the
competence of the performing institution (Dubnick 2005: p.392). There is a substantial
literature on high performing public sector organizations and governments that roughly
equals performance with superior capacity of the performing institution. The Government
Performance Project,initiated by Syracuse University, studies for example the performance
of US states by measuring their management capacity (Maxwell School of Citizenship
and Public Affairs 2002).
Secondly, when performance is about the quality of the achievements and not as much
about the quality of the actions, performance equals results (P3). The capacity of the
organization is not the focus of this conceptualization. The opinion that only results
matter is emblematic for this position (see Box 1.1 for a nice narrative reflecting this
perspective). Below, it is argued that results may be both the outputs and the outcomes
of the public sector. Many NPM texts see performance like this. As long as the results
are proven, it does not really matter how they came about.
INTRODUCTION
3
■Table 1.1 Four perspectives on how performance is understood?
Does the perspective imply quality of achievements?
Does the perspective No Yes
imply quality of actions? No Performance as Performance as good
production (P1) results (P3)
Yes Performance as Performance as
competence/ sustainable results
capacity (P2) (P4)
Source: based on Dubnick 2005
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Finally, when performance is conceptualized with attention for both the quality
of actions and the quality of achievements, it may be typified as sustainable results.
Performance refers to the productive organization, i.e. an organization that has the
capacity to perform and converts this capacity into results – outputs and outcome.
Performance in this text refers to the last conceptualization. We will study how mea-
surement of both capacity and results is embedded in public organizations.
2 PERFORMANCE AS AN AGENDA
Performance is not only a concept, but also an agenda. The term ‘performance’ expresses
a programme of change and improvement, which is promoted by a group of like-minded
actors that are usually only loosely coupled. In chapter 3, these groups of actors sharing
a performance agenda are called performance movements.
In western societies, the promise of increasing performance has been one of the
dominant agendas in the public sector. Ingraham (2005) observes that ‘for much of the
twentieth century – and certainly for the last 25 years – performance has been a siren’s
song for nations around the world’ (p.390). The post-war expansion of the welfare state
has raised expectations about the role of government. In the 1980s, this expansion was
no longer supported (Pollitt and Bouckaert 2004). Fiscal stress pressured the public
PERFORMANCE MANAGEMENT IN THE PUBLIC SECTOR
4
BOX 1.1 ONLY RESULTS MATTER
A priest and a taxi driver both died and went to heaven. St. Peter was at the Pearly
Gates waiting for them.
‘Come with me,’ said St. Peter to the taxi driver.
The taxi driver did as he was told and followed St. Peter to a mansion. It had
anything you could imagine from a bowling alley to an Olympic size pool.
‘Wow, thank you,’ said the taxi driver.
Next, St. Peter led the priest to a rugged old shack with a bunk bed and a little old
television set.
‘Wait, I think you are a little mixed up,’ said the priest. ‘Shouldn’t I be the one who
gets the mansion? After all I was a priest, went to church every day, and preached
God’s word.’
‘Yes, that’s true. But during your sermons people slept. When the taxi driver drove,
everyone prayed.’
Lesson: only results count.
taken from Hatry 1999
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budget and legitimacy crises pressured the politico-administrative system. In those
days, US president Ronald Reagan marked government as the problem rather than the
solution. As a response, governments pledged to do more with fewer resources – a
government that works better and costs less (Gore 1993).
Government across the globe reformed in the name of performance. In particular,
in the UK and the USA, this led to cutback management and a reduction of the size of
government (Dunleavy 1986). Other countries followed other trajectories. Pollitt and
Bouckaert (2004) identify four strategies: to minimize (privatize), to marketize (bringing
private sector techniques and values into government), to modernize (changing public
sector techniques and values) and to maintain (using the old techniques more intensely).
The societal demand for a high-performing public sector resonates until today, and filters
through to the organizational level.
3 A CONTESTED DEBATE
The roots of the performance agenda lie well beyond NPM. It should however not be
forgotten that there are quite distinct, but maybe less eye-catching agendas in public
administration such as establishing the rule of law, eradicating corruption, safeguarding
equity, transparency and democratization. One of the most persistent lines of attack
on the performance agenda is that it does not take these other values into account.
Performance may even be at cross purposes with other values. As a result, positions on
performance management have been quite polarized with opponents contending against
the dissenters who argued that the fundamental premises were wrong and produced
dysfunctional behaviour.
With time and experience, attitudes have matured and some convergence is apparent.
Yet performance management is at a turning point with close scrutiny and questioning
by both external observers as well as practitioners wrestling with the challenges in
practice (Bouckaert and Halligan 2008; Flynn 2007; Moynihan 2008).
A new generation of studies is addressing the age of performance characterized by its
pervasive influence on governments wrestling with complexities and issues. This growing
middle ground of analysts see the limitations of performance management but believe
there is something worthy of careful investigation through examining assumptions and
exposing faulty thinking as a means of narrowing the gap between rhetoric and practice
(; Moynihan 2008; Radin 2006). The OECD (2009) too has been exploring a range of
performance questions. At the same time more private debates have been occurring
among officials in several jurisdictions about the efficacy of existing arrangements.
There is general acceptance that performance management will continue to be central
to government. The reliance on highly developed official frameworks in various countries
indicates that these systems continue to serve important purposes for public sector
management. At the same there is considerable evidence of issues about how well
performance management is working in practice (KPMG 2008) and of the need for
INTRODUCTION
5
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improvements. Several factors – institutional, cultural and administrative tradition –
assist in accounting for different levels of commitment to performance management.
Although it may be too early to assess its definite impact, it seems that the financial
crisis may further institutionalize performance management.The nature of the crisis has
already changed from a financial to an economic crisis. It is unclear how it will transform
in the future, but it seems very plausible that a fiscal crisis will follow upon current deficit
spending. With public finance under pressure, the need to assure and demonstrate value
for money of public programmes will be reinforced.
4 MEASUREMENT, INCORPORATION AND USE OF
PERFORMANCE INFORMATION
This book is structured around the notions of measurement, incorporation, and use
of performance (Bouckaert and Halligan 2008). It is a logic sequence of collecting data,
integration of data into the management systems and, finally, putting information at
work. Measurement could also be seen as the supply side whereas the envisaged use is
the demand side. Supply and demand will not automatically adjust to each other. Hence,
incorporation assures the link between both (see Figure 1.1).
Measuring performance is systematically collecting data by observing and register-
ing performance-related issues for some performance purpose. There could be a
causal reason, e.g. there is a law or a regulation which requires an organization to collect
specific data. There could be an organizational objective, e.g. a need to use data for
improvement.
Incorporating is intentionally importing performance-related data in documents
and procedures with the potential and purpose of using them. The purpose is to create
the possibility of including performance-related information in the discourse and
ultimately in the culture and the memory of the organization. An inventory of tools and
techniques used to generate and anchor data and information into procedures, docu-
ments and organizations gives an overview of the incorporation capacity, which makes
it possible to use performance information functionally. Measuring performance data is
necessary but not sufficient for incorporating performance information. The capacity of
anchoring instruments to institutionalize performance information will create the
conditions to use this. Examples of these tools and techniques could be in financial,
PERFORMANCE MANAGEMENT IN THE PUBLIC SECTOR
6
demand of performance
information
supply of performance
information
measurement incorporation use
■Figure 1.1 Measurement, incorporation, use
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personnel or organizational legislation, and related handbooks for implementation. So
there are levels and degrees of incorporation.
Using incorporated performance information refers to debates and institutionalized
procedures for stakeholders for the purpose of designing policies, for deciding, for
allocating resources, competencies, and responsibilities, for controlling and redirect-
ing implementation, for (self) evaluating and assessing behaviour and results, and for
substantiating reporting and accountability mechanisms. Incorporating performance
data is necessary but not sufficient for using performance information. There is a need
for fit-for-purpose infrastructure (i.e. incorporation), and of an accommodating and
motivating performance culture as supra structure. In such a way, performance is fully
institutionalized.
To the extent that information is available across organizations, benchmarking and
bench learning could be used to upgrade systems to specific standards (single loop
learning), to adjust standards (double loop learning), or even to adjust systems constantly
as learning how to learn (meta learning). Using also suggests abusing and misusing and
therefore there is a legitimate concern for increasing potential value added and for
reducing possible dysfunctions (like new red tape or gaming), and to equilibrate costs
and benefits. This results in looking at general and specific use (reporting, learning,
accountability), but also at costs (dysfunctions) and benefits (value added) of using
incorporated performance information.
5 PERFORMANCE MEASUREMENT AND PUBLIC SECTOR
REFORM
Performance measurement has played a pivotal role in reform initiatives. Box 1.2 includes
a sample of some key texts that served as catalysts for public management reform
with a performance agenda. England in particular witnessed a boost in indicators by the
end of the 1980s (Pollitt 1993). Reform initiatives such as the Financial Management
Initiative, the Next Steps agenda, and the Citizen’s Charter led to the creation of
performance indicator systems for most public services, central and local. League tables
have been created for amongst others schools, hospitals, health trusts, ambulance services
and local authorities. No other country went so far in the use of performance indicators
in governance regimes. The intrusion of indicators in the fibres of the public sector has
led Hood to conclude that it is English exceptionalism (Hood 2007). Even Scotland and
Wales opted for a softer approach.
In general, Continental Europe has not used performance indicators with the
same intensity compared to the Anglo-Saxon world. Yet, there are considerable
variations between countries. In Germany, the ‘New Steering Model’ (das Neues
Steuerungsmodell) stressed the importance of performance indicators (Naschold and
Bogumil 2000). However, the reform has only been applied in some big cities, city-states
and Länder. Nowadays, the reform enthusiasm seems to be over and there is increasing
INTRODUCTION
7
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PERFORMANCE MANAGEMENT IN THE PUBLIC SECTOR
8
BOX 1.2 PERFORMANCE AND PUBLIC MANAGEMENT
REFORM – SOME KEY TEXTS
This box presents some key texts that propagate reform and link it directly to
performance. These are not academic texts, but policy documents by governments
and their think tanks.
1. 1993: US vice president Al Gore publishes the National Performance
Review. The title is revealing; ‘From Red Tape to Results: Creating a
Government that Works Better & Costs Less’. The report was accompanied
by the Government Performance and Results Act (1993), which imposed
performance plans and reports as a basis for managerial accountability in
the federal government. It was strongly indebted to Osborne and Gaebler’s
(1993) Reinventing Government.
2. 1997: The OECD’s Public Management Service (PUMA) publishes a study
titled ‘In search for results, performance management practices’ (1997). It
is a case catalogue of performance-oriented reform practices in ten, mainly
Anglo-Saxon and Scandinavian OECD countries. The performance
practices are a blend of financial management, HRM and accountability
reforms. The activities of the PUMA have later been critiqued for imposing
a NPM framework, regardless of context (Premfors 1998).
3. 1999: The British PM Tony Blair launches ‘modernizing government’, a
reform agenda which confirmed the use of targets and indicators in the
British public service. In 2001, the publication ‘Choosing the Right
FABRIC – A Framework For Performance Information’ substantiated this
agenda. It was issued jointly by the main players in the field of
measurement: the Treasury, the Audit Commission, the National Audit
Office, the Office for National Statistics and the Cabinet Office.
4. 2003: The UK House of Commons’ Public Administration Select Committee
brings out a report titled ‘On target? Government by measurement’. The
committee documented an overly strong focus on the performance measures
at the expense of performance itself. The report proposes a shift from a
measurement culture towards a performance culture.
5. 2008: The election of the Rudd government in Australia in 2007 produced
an agenda to improve budget transparency (termed Operation Sunlight)
(Tanner 2008). It critiques the outcomes and outputs framework for being
unable to shift the focus of financial reporting from inputs (programmes,
expenses, and recipients) to outputs and outcomes i.e. actual results. Basic
information on inputs was lost in the changeover, and reporting of outcomes
is seriously inadequate.
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acknowledgement of reform fatigue. In France, the ‘Loi Organique Relative aux Lois de
Finances’ (LOLF) introduced a form of performance budgeting (Calmette 2006). In
Sweden, having a highly decentralized public sector, performance measures mainly played
a role in the steering of agencies. In Norway, the Management by Objectives and Results
system has been widely adopted, albeit after a transformation and translation by the
agencies (Laegreid et al. 2008). The country with the strongest tradition in performance
measurement in continental Europe probably is the Netherlands. The first initiatives
were taken in the 1970s and by the 1980s, several local governments implemented NPM-
like measurement-based reforms. The first large-scale implementations of performance-
oriented reforms at a central level took place in the 1990s. The series of reforms
culminated in 1999 with the ‘VBTB’ initiative – an outcome-based budget structure.
Bouckaert and Peters (2002) argue that performance measurement is the ‘Achilles
Heel’ of many public sector reforms. The availability of performance information is a
necessary – but not sufficient – condition for the success of many reform initiatives.
Yet, often the availability of performance information is assumed. The presence of
performance information is one of the most decisive and susceptible aspects of the recent
tide of public management reforms. This observation legitimizes a scientific focus on
measurement of performance. Yet, performance measurement goes beyond public sector
reform. It is found in recurring activities in public management and public policy.
6 PERFORMANCE MEASUREMENT AND PUBLIC
MANAGEMENT.
Performance information is not only pivotal in public sector reform. It also plays a role
in daily management practice. The Government Performance Project (GPP), a six-year
research initiative valuating the management capacity of federal, state and local
government entities in the USA, provides some insight in the role of performance
information in organizations (Ingraham et al. 2003). The most visible part of the project
was the graded reports of the 50 States. The underlying model of the assessment
identified four management subsystems that contribute to management capacity –
defined as the potential for performance: financial management, human resources
management, capital management and information technology management. The GPP
identifies two crosscutting levers; leadership and information. First, leadership is the
driver since leaders are able to make informed decisions, to provide guidance and
direction, to develop the institution’s mission, vision and values, to communicate these
to the members and to coordinate organizational components. Secondly, information
and a focus on results are connectors. Information connects the management sub-
systems with each other. It also connects the management system with the outside world
through measurement of programme delivery and performance.
Besides performance information, other connectors in the management of organ-
izations may be identified. The 60-year old Friedrich–Finer debate on accountability
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systems points to an important addition (Bouckaert and Halligan 2008). Finer cham-
pioned a system based on objective accountability. He would support performance
information for its integrative potential. Friedrich advocated a system based on
professional ‘fellowship’ between practitioners. Pride-related arguments of these
professionals allow for a subjective accountability mechanism derived from their values,
which could also be seen as a connector between subsystems.
7 PERFORMANCE MEASUREMENT AND PUBLIC POLICY
Performance measurement also plays a role in public policy. Performance measure-
ment and policy evaluation are adjacent fields. Wholey et al. (2004) see a role for
performance data in the evaluability study that may precede an evaluation. Weiss (1998)
points to performance data as a data source for evaluators (see also Wholey et al. (2004).
Some authors go further and advocate an integration of performance measurement
and evaluation. McDavid and Hawthorn (2006) assert that performance measure-
ment may be seen as an approach to evaluation. The basic programme evaluation tools
are also useful for performance measurement. They are complementary evaluation
strategies. Yet, some important differences remain (see Box 1.3).
PERFORMANCE MANAGEMENT IN THE PUBLIC SECTOR
10
BOX 1.3 THE DIFFERENCE BETWEEN
PERFORMANCE MEASUREMENT AND EVALUATION
McDavid and Hawthorn (2006: p.293) point to seven differences.
1 Performance measurement systems are ongoing while evaluation is
episodic.
2 Performance measurement addresses general issues while program
evaluation is issue specific.
3 Performance measures are routinized while evaluation measures are
customized for each evaluation.
4 Performance measurement generally takes attribution for granted while for
evaluation it is a central issue.
5 Resources for performance measurement are usually part of the
organizational infrastructure while resources for evaluation are targeted.
6 Managers often play a key role in performance measurement while
evaluators and managers are less connected.
7 The uses of performance information evolve over time while the intended
purposes of programme evaluation are usually negotiated up front.
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Not only evaluators are using information from performance measurement systems.
Performance measurement also plays a role in actual policy processes. At several points
in time, the quest for rationalization of policy decisions led to substantial measurement
efforts. In the 1960s, the social indicators movement aspired to provide policy makers
in the welfare states with objective facts on their performance. Social indicators were to
be integrated into a system of social accounting that paralleled the national income
accounting system. Social indicators should also serve as a tool for programme evalua-
tion and social engineering (Rossi and Gilmartin 1980). In hindsight, the movement
seems to have been too ambitious.
8 APPROACH AND OUTLINE OF THE BOOK
The book aspires to a deeper understanding of performance management, its strengths,
its weaknesses and its context. Several choices have been made in writing this book:
1 Performance management is a contested field with advocates and opponents in
both the academic and practitioner community. This book assumes that it is not
necessary to take sides. A combination of a critical attitude with openness towards
the inherent potential of measurement is possible.
2 Key for critical believers of performance management is an understanding of the
conditionality of successful performance management; what works when and
under which circumstances? This text will pay ample attention to contextual
variation.
3 A common but accurate saying states that there is nothing more practical than a good
theory. More than how-to manuals of performance management, theories in the
field of public administration are applied. The practical relevance of theoretical
argumentation lies in the capacity to discover regularities in the relation between
performance management and its context. The book does not envisage a grand
theoretical scheme. Rather, middle range theories are suggested when appropriate.
4 The book does not discuss the technicalities of measurement. Discussions on
analysis techniques and ICT (information and communication technologies)
support are not included in this text. Performance management is seen as a social
phenomenon in a political and administrative context. A strong focus on the use,
users and non-use of performance information follows from this viewpoint.
The outline of the book is as follows (see also Figure 1.2).
Chapter 2 develops and extends the concepts. Key concepts are performance,
performance measurement and performance management. Questions include: What
is performance and how does it relate to public values? What is micro, meso and
macro performance? What is performance measurement? Is everything measur-able?
What is performance management and what is it not?
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Chapter 3 describes the history of performance management in the 20th century.
Several performance movements are identified. A chronological account of those
movements is followed by a discussion of elements of change and continuity in
performance management.
Chapter 4 is about performance measurement. The subsequent stages of deciding
what to measure, identifying indicators, analysing, reporting and safeguarding quality
are discussed in detail. This chapter deals with the major design parameters for a
performance measurement system.
Chapter 5 discusses how performance information can be incorporated into policy
and management. Policy and management cycles are the target for the incorporation of
PERFORMANCE MANAGEMENT IN THE PUBLIC SECTOR
12
Chapter 2
Defining the concepts
Chapter 3
The history of performance
management
Chapter 1
Introduction
Chapter 4
Performance measurement
Chapter 5
Incorporation
Chapter 6
Use
Chapter 9
Effects of use
Chapter 10
The future of performance
management
Chapter 7
Users
Chapter 8
Non-use
■Figure 1.2 Outline of the book
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performance information. If successful, incorporation should bridge the gap between the
provision of information through measurement (chapter 4) and its use (chapter 6).
Chapter 6 then deals with the use of performance information. Three modes of use
are distinguished; learning, steering & control, and accountability. The chapter further
argues that the design parameters of a measurement system (see chapter 4) need to vary
according to the use that is envisaged.
Chapter 7 looks at performance information from the perspective of the users; public
managers, politicians, citizens, oversight agencies, and media. The actor perspective on
use is intensely intertwined with the thematic approach in chapter 6.
Chapter 8 reflects upon the observation that performance information is often
not used. Several theories can explain why performance information is not always
functional for management and policy. Besides insufficient quality of performance
information, psychological, cultural and institutional barriers may inhibit use.
Chapter 9 discusses the effects of performance measurement; does perform-
ance measurement perform? Both the functional and dysfunctional effects are treated.
The chapter concludes with some strategies to cope with dysfunctional effects of
measurement effects.
Chapter 10 is titled ‘The future of performance management’. Some slightly
provocative statements are being put forward in order to challenge thinking about
performance management while using the concepts of the book. The chapter first
outlines some paradoxes in measurement, after which a number of potential improve-
ments in implementation are taken into consideration. Finally, three more fundamental
departures from the current practice of performance management are discussed.
9 CONCLUSION
This introductory chapter sketched the subject of the book in broad outlines. It is argued
that performance is pivotal in contemporary public management. Performance per-
meates management, public sector reform and public policy. Performance however is
not only a concept; it also suggests an agenda of change and improvement. As a result,
performance is also heavily contested for being too one-sided. The core of the critique
is a neglect of other values such as equity, openness, integrity, etc.
Much of the controversy is about performance as an agenda (propagated by a
performance movement) and not as much about performance as a concept. Chapter 3
deals with the history of performance movements which propagated often contested
performance agendas. Chapter 2 seeks more conceptual precision and suggests a
framework to reconcile the performance concept and the concept of public values. This
book further builds on the concepts, and not on the controversy around the performance
agenda.
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FURTHER READING
A good start to situate the performance concepts is Dubnick’s (2005) article on
accountability and the promise of performance. Ingraham (2005) and Bouckaert and
Halligan (2008) provide an overview of the performance agenda; where it came from,
what it promised and where it is going. A good start to the state of the art of performance
research is Performance Measurement: Building Theory, Improving Practice by De Lancer Julnes
and Holzer (2008). The controversy around performance management is best described
by Radin’s book Challenging the Performance Movement (Radin 2006). It may also be useful
to critically revise some of the text that advocate performance management; e.g. Gore’s
National Performance Review (1993), and Osborne and Gaebler’s Reinventing Government
(1993).
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