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Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 05
June 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 55
Declining Employee Performance in Public Sector
Organizations: An Etiological Study of Public
Sector Organizations in Pakistan
Syed Kashan Ali Shah1, Najabat Ali2 Zulfiqar Ali3
1Faculty Member, Hamdard Institute of Management Sciences, Hamdard University, Karachi,
PAKISTAN
2Research Scholar, Hamdard Institute of Education and Social Sciences, Hamdard University,
Main Campus, Karachi, PAKISTAN
3PhD Scholar, Department of Public Administration, University of Karachi, PAKISTAN
Email: kashan_shah@live.com
ABSTRACT
Declining employee performance is the most
widespread problem in public sector
organizations. The purpose of this study is
to identify the genetics, reasons and domain
of poor employee performance in Pakistan’s
public sector organizations. Employee
performance has been center of attention for
researchers for many years due to the
difference of competence level between
private and public sector organizations. The
study examines the determinants of
decreased level of employee performance in
public sector organizations. This paper
reviews and evaluates the academic
literature, articles, performance evaluation
reports, global competitiveness indices and
books relating to employee performance to
gather information. The study found that
corruption and political interference have
significant effect on employee’s
performance. Whereas, environmental
factors; lack of
training/processes/technology and lack of
employee participation in the decision
making have little impact on the employee’s
performance. The results of this study are
useful for policy makers as well as
authorities concerned with devising
performance management system in public
sector organizations.
Keywords: Public sector, employees,
declining performance, politicization,
corruption, environmental factors, Pakistan.
INTRODUCTION
It is a fact that in today’s world the economy
is most critical factor for the development of
any country. The economic prosperity
ensures sovereignty, stability and
development of a country. And economic
prosperity can only be achieved through
high level of performance, good governance,
focused national strategies and industrial
growth. Governments in any part of the
world are responsible to manage the public
resources to generate maximum public good.
Government plays vital role in various
aspects that directly impact on citizen’s
welfare. Government institutions are
responsible for providing basic services such
as security, law and order, justice, health,
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 05
June 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 56
education, employment, transportation etc.
Pakistan’s public sector is not very efficient
due to various reasons, which include lack
of accountability, political influences, lack
of resources, delayed projects. In addition to
this over staffing, unskilled work force, low
compensation and benefits, unfair
employment opportunities and promotion
criteria are also potential problems that
hinder employee performance.
The governance conditions are worst in
Pakistan than most parts of the world. The
Global Competitiveness Index (GCI), which
measures competitiveness of an economy on
the basis of 12 major indicators. Pakistan
has lost on almost all indicators of
performance and ranked at 124 in 2012-13.
The World Bank has stated in its reports that
Pakistan’s bureaucracy is having structural
problems. Although plenty of efforts have
been made to improve governance but
politicization is the foremost barrier in
implementing policies to establish culture of
performance in Pakistan. The Transparency
International Pakistan in its National
Corruption Perception Survey (NCPS 2012)
stated that corruption in last five years has
increased by 400% in Pakistan. According
to Transparency International Pakistan, the
main reasons of corruption were lack of
accountability, lack of transparency and
unlimited powers.
It is a fact that bureaucracy in Pakistan is
astonishingly problematical by different
rules and regulations. While dealing with
bureaucrats it requires some personalized
relationships and third party interference to
get work completed in appropriate time. The
accumulated effects of poor employee
performance of government institutions
result in massive economic losses, energy
crises, decline in industry, poor health and
education facilities, delayed projects,
corruption, disturbances prevailing in
citizens and other number of crises.
In order to generate clear understanding of
performance dilemma in public sector, we
studied its genetics as well as its domain to
explore when poor performance culture
induced and where it is common. As we
know that Pakistan was fastest growing
economy in Asia during 1960’s, all
economic indexes illustrate that institutions
were performing well in all directions. Then
we adopted nationalization policy, it results
in gradual decrease of performance in public
sector.
In this study we analyze numbers of
researches conducted on employee
performance measurement in public sector,
which use various models to identify the
significance of factors like civil servants
wages, internal enforcement of policies,
autonomy of organization, external
influences, transparency and politicization
as variables that affect quality of employee
performance in public sector. This research
aims to investigate the factors that stimulate
or hinder the government servants to
perform competently. The factors thus
identified can be used to enhance the
employee and overall performance of the
public sector in Pakistan.
LITERATURE REVIEW
PUBLIC SECTOR DEFINED:
Journal for Studies in Management and Planning
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Public sector organizations have broad-
based responsibilities of serving “people”,
taking care of their interests, enable suitable
environment for business, provide sound
policies, information, assistance etc.
According to World Bank “it is imperative
for the state to create, sustain and augment
institutional structures befitting the myriad
of minimal, intermediate and activist
functions it performs to improve social
equity and address market failure (The
World Bank, 1997, p. 27). First of all we
will discuss the ‘public sector’, it is
important to understand the word “Public”
in public sector. A statement by Ranson and
Stewart (1994: 59-60) generate clear
understanding about the functions and
obligations of public sector that is “The
essential task of the public domain can now
be interpreted as enabling authoritative
public choice about collective activity and
purpose. In short, it is about clarifying,
constituting and achieving a public purpose.
It has the ultimate responsibility for
constituting a society as a political
community which has the capacity to make
public choices. Producing a ‘public which is
able to enter into dialogue and decide about
the needs of the community…is the uniquely
demanding challenge facing the public
domain.”
In the above statement it has been stressed
that the basic purpose of public sector is
“collective” activity, purpose, and choice for
the welfare of people.
PERFORMANCE DEFINED:
Briscoe and Claus (2008) defined
Performance management is a systematic
process for improving organizational
performance by developing the performance
of individuals and teams. It is a means of
getting better results by understanding and
managing performance within an agreed
framework of planned goals, standards and
competency requirements. Processes exist
for establishing shared understanding about
what is to be achieved, and for managing
and developing people in a way that
increases the probability that it will be
achieved in the short and longer term.
New approach towards performance
management describes that organizational
values, employee participation, continuous
and objective assessment, mutual goal
setting, customer focus and use of key
performance indicators are inevitable for the
successful working of public sector
organizations. But Max Weber, designer of
bureaucratic style of management argues
that only bureaucracies are capable of taking
rational decisions and state political leaders
can direct and mobilize state organizations.
Weber defends that Bureaucratic types of
organization are technically superior to all
other forms of administration, much as
machine production is superior to handicraft
methods. The characteristics of an ideal
bureaucracy have been identified by Weber
as Hierarchy of authority; Impersonality;
Written rules of conduct; Promotion based
on achievement; Specialized division of
labor; and Efficiency (‘Max Weber on
Bureaucracy’). Weber’s notion of
bureaucracy is not without criticism. Some
have claimed that he liked bureaucracy, that
he believed that bureaucracy was a “rigid”
organization. Others have pronounced
Weber “wrong” because bureaucracies do
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 05
June 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 58
not live up to his list of “ideals.” Others
have even claimed that Weber’s
bureaucratic organization is “imaginary”.
Stephen P. Osborne (2002: 3) argues that
“public sector organizations perform poorly
in many developing countries’ because of
‘poverty, economic crisis, corruption and
political instability’. On the other hand, this
is not to suggest that public sector is
incompetent of performing well all over the
developing countries. On the basis of in-
depth empirical verification, Grindle
explains that it is possible to point out key
organizational characteristics which enable
optimal performance; including “an
attention to organizational values and
cultures and positive human resource
management.” (Stephen P. Osborne (2002:
3) Public Management: Critical Perspective
Volume 4).
Organizational values, customer focused
strategies and effective performance
evaluation is necessary for the successful
working of public sector organizations. The
possible reasons for variation in
performance include the characteristics or
needs of the people served; the skills or
motivations of the direct service workers;
the quality of local site management; the
clarity of policy direction; factors in local
environment; the extent of system-wide
coordination; strength and enforcement of
performance incentives; and other structural
characteristics of system. Some of these
factors are likely to be much more
influential than others, making it important
to know which factors matter most if better
system performance is to be attained
(Laurence E. Lynn Jr. et. al 2000).
Wright & Bonett in 2002 observed
accountability as a variable influence job
performance, Cronin & Becherer, 1999 and
Fort & Voltero, 2004 found non-financial
rewards like recognition of achievement and
McConnell, 2003; Tzeng, 2004 found job
satisfaction influenced job performance.
Researchers found various factors enhance
or reduce employee performance but most of
the researchers are convince that
accountability, reward and environmental
factors have positive influence on employee
job performance.
LACK OF ACCOUNTABILITY
Public sector of Pakistan is not well-reputed
due to corrupt practices, bureaucratic and
political influences, and incompetent
appointments by influential individuals of
the staff, scarcity of resources and low
salaries of government servants. Dr. Sultan
Khan (2002: 250) argues that “in Pakistan
the bureaucracy which is the tool of
government to provide all facilities to the
citizens, failed to provide anyone…
Expanding bureaucracy’s means and
increasing their expenses resulted in
lowering the productivity of the country;
which made the system closed.” Hence,
bureaucracy has created a dilemma for the
people of Pakistan. It is perceived that
government organizations lack technology,
process and training but it is not the case.
Most of the public sector organization have
reasonable budget allocated for training &
development, acquiring new process and
technology but due to less motivation,
corruption, biasness and political pressures
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 05
June 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 59
these programs goes in vain. It is found that
employee’s selection for training is on the
bases of nepotism/favoritism instead of
merit and selecting incompetent firms for
process or technology re-engineering that
gives lowest bid and pay bribe to high
officials. That is why public sector
organizations not succeeded to produce
expected outcomes through training and
technological innovations.
CORRUPTION
It encourages extensive corruption, while at
the same time lowering morale and
increasing ineffectiveness. Many capable
officials wish to join the private sector. It is
observed that low salaries and benefits are a
major cause of bureaucratic inefficiency.
The decline in employee performance is
largely due to low salaries and wages as
compare to private sector. (Reforming
Pakistan’s Civil Service).
RECRUITMENT IN PUBLIC SECTOR
Definitely being an Asian tiger by now"
Abdul Hameed. M. Dadabhoy, Interview
with Daily Dawn September 9, 1995. This
statement describes the whole picture that
our public sector was performing quite will
during 1960’s. As all development
indicators show that our economy was
fastest at that time in entire Asia. Our public
sector organization PIA, which is declining
today, has developed Chinese national flag
carrier airline and world’s leading airline
Emirates Airways. The Nationalization
process in Pakistan was a policy measure
program in the economic history of
Pakistan, first introduced, Zulfikar Ali
Bhutto in order to lay the foundation of
socialist economic reforms to improve the
growth of national economy of Pakistan.
Since the 1950s, the country had a speedy
industrialization and became an industrial
paradise in Asia. But, as time progressed,
the labor trade unions and labor-working
class had strained relations with the
industrial business oligarch classes,
completely neglected the work conditions
and failed to provide healthy environment to
the workers class in the industries.
“Riazuddin, Riaz: Pakistan: Financial Sector
Assessment (1990-2000)
RATIONALE
It is a fact that poor performance is
widespread in our public organization. The
increasing losses of public organizations in
Pakistan seem to be a challenge for state.
The government is spending Rs. 400-600
billion per year on these organizations as a
result of this reducing allocation for the
development budget. Therefore, it is
essential to identify the underlying causes of
poor performance in public organization.
The objective of this research is to identify
the determinants of employee performance.
An effective performance management
system can be developed by using these
determinants. The findings of the research
will be very productive for public sector
organization as it will highlight the grey
areas in employee performance. Moreover,
the findings of this research will be helpful
in devising any performance management
mechanism in public sector organization.
Journal for Studies in Management and Planning
Available at http://internationaljournalofresearch.org/index.php/JSMaP
e-ISSN: 2395-0463
Volume 01 Issue 05
June 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 60
HYPOTHESES
H1
The decrease level of performance will be because of political interference.
H2
The decrease level of performance will be because of low environmental facilitation i.e.
a) lack of technology
b) lack of process
c) lack of training
H3
The decrease level of performance will be due to corruption
H4
The decrease level of performance will be due to lack of employee participation in the
decisions making
METHODOLOGY
This is an exploratory research conducted to
identify the factors that induce or hinder
public officials to work efficiently for
providing service to the public. The content
analysis method is used in this study. The
data has been collected from articles,
performance evaluation reports, global
competitiveness reports, judicial reports and
books relating to employee performance.
After the collection of information, it is
studied that which factors cause major affect
on employee performance. On the basis of
expert’s opinion elicit in their research
studies and findings of the reports on
employee performance are used to drive
results. Moreover, factual data, economic
indicators and surveys results are also used
in identifying the most relevant determinants
of employee performance in public sector.
ANALYSIS AND DISCUSSION
What is decreased level of performance in
organization?
The decrease level of performance in
organization can be defined as below
standard employee performance,
absenteeism, delayed process, loss of
revenue. In addition to this poor public
image, inability to promptly deal customer
complaints and reduction in operational
capacity is also considered as decreased
level of performance in organization.
Where it is common?
Stephen P. Osborne (2002: 3) states that
“public sector organizations perform poorly
in many developing countries”. It is a fact
that decreased level of performance is more
common in public sector organization due to
lack of ownership, accountability and in
efficient management system. Whereas
private organizations have ownership,
effective management system and profit
focused strategies that enforce them to work
effectively. In private sector employees
performance directly linked with their pay.
However in public sector organizations
employee receive pay increase on the bases
of length of their service (seniority) instead
of job performance. Private organization
uses performance appraisal to take objective
decisions regarding employee’s promotion,
Journal for Studies in Management and Planning
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e-ISSN: 2395-0463
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June 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 61
demotion and termination. Performance
management work as positive or negative
reinforcement at the same time by
encouraging through rewards; (increment,
perks, promotion, appreciation) if perform
effectively otherwise they will be terminated
on the bases of underperformance. Most of
the public sector organizations do not have
any effective performance evaluation
system, which set an objective criterion for
promotion, demotion and termination.
Government employees enjoy high job
security and promoted on various bases,
which include nepotism, paying-off,
political affiliation and tenure of their job.
Large organizations that are experiencing
decreased level of performance in public
sector are:
Police Services
Railways
Pakistan Administrative Group
PIA
WAPDA
Steel Mill
Land Revenue
Customs and taxation
The growing losses of state-owned
enterprises (SOEs) in Pakistan seem to be a
challenge for economic managers.
Inefficiency, mismanagement, corruption,
political influences and vested interests are
considered responsible for the huge losses
and poor performance of these state-owned
corporations.
At what level decreased level of
performance is common?
Poor performance is an upside down
practice. It is a fact that without the consent
of top management any corruption,
negligence, misconduct, absenteeism is not
possible. Therefore, it can be said that it is
decreased level of performance is frequent
throughout all levels and position
What are the reasons for decreased level of
performance in public sector organizations?
The most widespread reasons for decreased
level of performance are lack of
accountability corruption and absence of
objective evaluation mechanism. There is no
proper check and balance mechanism in
public organization that allows government
employees to do anything after getting job in
government organization. No objective
assessment criterion is defined as NCGR
reported that, “the system of performance
evaluation reports to be highly subjective
and a stick used by some immediate
superiors to force obedience and
obsequiousness among their subordinates”.
Corruption is another reason that is affecting
efficiency and performance of public sector
employees. corruption can be defined as
misuse of an employee’s authority by not
fulfilling their responsibilities properly; not
taking care and protecting public’s interests;
stealing wealth and resources from
organization; exercising unjustifiable power
on policy making and performance process;
and employing unskilled workers for jobs
that demand proficiency. In addition to this
Bureaucratic corruption include abuse of
Journal for Studies in Management and Planning
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e-ISSN: 2395-0463
Volume 01 Issue 05
June 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 62
discretionary power, misuse of regulatory
authority, as well as institutionalized
powers. Furthermore, recruitments, postings
and promotions are given through biding the
highest rate or political pressure is also
cause massive damage to public sector
organizations.
Last but not the least is absence of proper
performance evaluation mechanism that
hinders employee performance. Government
employees get promotion, increment and
transfer on the bases of nepotism,
favoritism, and political affiliation rather
than job performance.
What are the genetics of decreased level of
performance in public sector organization?
Intensive study of public sector
organizations from 1950 till today reveals
that government organizations were highly
effective and efficient till 1970. Abdul
Hameed. M. Dadabhoy state that “Had we
gone at the rate of growth during the decade
of 1960's, I reckon we would have definitely
been an Asian tiger by now". All economic
indexes which include Gross National
product, Gross Development Product and
foreign exchange index demonstrate that
Pakistan was leading in Asia. Pakistan has
highest economic growth rate during 1960’s.
Our public organization that are
experiencing worst recession today, were
considered elite in their fields. For instance
Pakistan International Airline (PIA) is
facing most terrible decline in its history and
requires Rs. 200 billion every year from
government in order to remain operational.
Is it always in similar situation? Obviously
not PIA has developed world’s leading
Airline Emirates airways. It not only works
as Chinese national airline but also help
them in developing their national flag
carrier. PIA was renowned for its services
and customer care but now it is close to
financial collapse.
Since the 1950s, the country had a rapid
industrialization and became an industrial
paradise in Asia. Zulfiqar Ali Bhutto
adopted nationalization policy in 1970’s in
order to improve the growth of national
economy. But after nationalizing all large
corporations, mills, factories and banks
government failed to manage them
effectively. Bhutto allowed unlimited
powers to labor unions and also recruited
large number of employees on political
bases. Consequently, the organizations that
were earning huge revenues before
nationalization converted into burden on
national economy after nationalization due
to lack of ownership, accountability and
corruption.
Is it learned or by nature?
It is learned through social adaptation. When
hard working employees do not get any
benefit or development in their job through
their job performance, then they adapt the
attitude of non performers. Because they
learnt that the standard for success in their
organization is something else instead of job
performance.
Is decreased level of performance due to
political interference?
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To certain extent it is right because political
pressures are used for recruitment,
promotion and transfer in government
services. According to Transparency
International (TI)’s report 2012 more than
44 percent of government servants have paid
a bribe or used source (political affiliation)
to get a service in public sector.
“Politicization of the bureaucracy
contributes to its dysfunction, with
promotions increasingly dependent on
officers’ immediacy to those in power
(Reforming Pakistan’s Civil Service: 1), it
clearly illustrates that political pressures are
rampant in our public sector organizations
and results in poor employee job
performance.
Is it related to lack of environmental
facilitation?
It is perceived that public sector
organizations lack technology, process and
training but it is not the case. Most of the
public sector organization have reasonable
budget allocated for training &development,
acquisition of new process and technology.
But due to less motivation, corruption,
biasness and political pressures these
programs prove ineffective. It is found that
employee selection for training is usually on
the bases of favoritism instead of merit. In
addition for process or technology re-
engineering incompetent firms are selected
that give lowest bid and pay bribe to high
officials. That is why public sector
organizations largely unsuccessful to get
anticipated outcomes from trainings and
technology advancements.
CONCLUSION
The public sector organizations in Pakistan
are considered as one of the inefficient
institutes of the country where poor
governance, delayed processes, corruption,
political and individual influences, lack of
resources, low protection and salaries of
public employees are prevailing causes. Due
to these negative attributes, the public sector
is unable to provide efficient service
delivery to its clients, i.e. the common
people who are always dissatisfied and
frustrated about their performance. The
study found that corruption and political
interference have significant effects on
employee’s performance. Whereas,
environmental factors; lack of training
processes and lack of employee participation
in decision making have minute impact on
the employees’ performance.
Public sector organizations can be made
more efficient and policies can be made
more effective only if the good governance
principles of transparency, fairness, equal
treatment and high salaries. Moreover,
merit-based appointment, fair promotions
based on objective evaluation, vertical and
horizontal accountability mechanisms are
introduced and practiced by the employees
from the top to bottom of the organization.
The policy making process should also be
connected and integrated into policy
implementation.
Journal for Studies in Management and Planning
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e-ISSN: 2395-0463
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June 2015
Available online: http://internationaljournalofresearch.org/ P a g e | 64
RECOMMENDATIONS
Economic incentive is one of the most
important factors interfering with the
performance of individuals in organizations.
Attractive salary packages are needed to be
introduced in public sector organizations in
Pakistan. It will not only helpful in reducing
corruption in government employees but
also facilitate their job performance. In
addition, performance related pay should
also be introduced and linked to the
efficiency and performance of the
individuals. Promotions of the employees
should be linked with their work efficiency,
performance, punctuality, tasks completion,
expertise and qualification instead of
seniority or time period. Performance
culture in public sector organizations can
only be possible by adopting effective
performance management and evaluation
system, which objectively measure
employee performance and linked it with
compensation as well as promotion.
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