Managing and Measuring Performance in Public and Nonprofit Organizations E-Book
Theodore H. Poister
56,99 €
Mehr erfahren.
- Herausgeber: John Wiley & Sons
- Kategorie: Bildung
- Sprache: Englisch
New edition of a classic guide to ensuring effective organizational performance Thoroughly revised and updated, the second edition of Managing and Measuring Performance in Public and Nonprofit Organizations is a comprehensive resource for designing and implementing effective performance management and measurement systems in public and nonprofit organizations. The ideas, tools, and processes in this vital resource are designed to help organizations develop measurement systems to support such effective management approaches as strategic management, results-based budgeting, performance management, process improvement, performance contracting, and much more. The book will help readers identify outcomes and other performance criteria to be measured, tie measures to goals and objectives, define and evaluate the worth of desired performance measures, and analyze, process, report, and utilize data effectively. * Includes significant updates that offer a more integrated approach to performance management and measurement * Offers a detailed framework and instructions for developing and implementing performance management systems * Shows how to apply the most effective performance management principles * Reveals how to overcome the barriers to effective performance management Managing and Measuring Performance in Public and Nonprofit Organizations identifies common methodological and managerial problems that often confront managers in developing performance measurement systems, and presents a number of targeted strategies for the successful implementation of such systems in public and nonprofit organizations. This must-have resource will help leaders reach their organizational goals and objectives.
Sie lesen das E-Book in den Legimi-Apps auf:
Seitenzahl: 739
Veröffentlichungsjahr: 2014
Ähnliche
Cover design by Wiley
Cover image: © iStock.com / aleksandarvelasevic
Copyright © 2015 by John Wiley & Sons, Inc. All rights reserved.
Published by Jossey-Bass
A Wiley Brand
One Montgomery Street, Suite 1200, San Francisco, CA 94104-4594—www.josseybass.com
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the Web at www.copyright.com. Requests to the publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, or online at www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. Readers should be aware that Internet Web sites offered as citations and/or sources for further information may have changed or disappeared between the time this was written and when it is read.
Jossey-Bass books and products are available through most bookstores. To contact Jossey-Bass directly call our Customer Care Department within the U.S. at 800-956-7739, outside the U.S. at 317-572-3986, or fax 317-572-4002.
Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.
Library of Congress Cataloging-in-Publication Data
Poister, Theodore H.
[Measuring performance in public and nonprofit organizations]
Managing and measuring performance in public and nonprofit organizations: an integrated approach / Theodore H. Poister, Maria P. Aristigueta, Jeremy L. Hall. – Second edition.
pages cm
Revised edition of Poister's Measuring performance in public and nonprofit organizations.
Includes bibliographical references and index.
ISBN 978-1-118-43905-0 (hardback)
1. Organizational effectiveness–Measurement. 2. Organizational effectiveness–Management. 3. Nonprofit organizations. 4. Public administration. 5. Performance–Measurement. 6. Performance–Management I. Aristigueta, Maria Pilar II. Hall, Jeremy L. III. Title.
HD58.9.P65 2015
658.4’013–dc23
2014021079
To my wonderful granddaughters,
Susannah Grace and Caroline Elizabeth Tusher
Who light up my life and make it all the more worthwhile.—Ted Poister
To my husband, Don Coons,
For his unwavering love, patience, and support.—Maria Aristigueta
To my niece, Kadence Olivia Dick,
Who brightens each day and always motivates me to perform at my best.—Jeremy L. Hall
Preface
This is the second edition of Measuring Performance in Public and Nonprofit Organizations, a sole-authored book published in 2003. Over the intervening ten years, the emphasis on performance management in government has grown tremendously, and in the eyes of both its champions and its critics, it is clear that public and nonprofit organizations are operating in an era of performance. Performance management systems, which set clear goals and objectives and use systematic performance information to manage more effectively in order to achieve them, are ubiquitous in government at all levels in the United States and many other countries, and the adoption of such systems has proliferated rapidly in the nonprofit sector as well.
If the missions and goals of public and nonprofit organizations are worthwhile—if they indeed add public value to the societies and communities they serve—then performance is of paramount importance. And it is important to understand that high levels of performance do not just occur on their own, and there are many barriers to improving performance in most settings. Numerous stakeholders have a vested interest in performance management, including legislative bodies, other elected officials, chief executive officers, managers and employees, agencies in higher levels of government, customers and constituents, and relevant professional organizations. In the nonprofit sector, boards of directors, administrators, managers, employees, volunteers, customers and clients, advocacy groups, and funding organizations all have a stake in the effective use of performance measures to improve decisions, manage more effectively, and improve performance and accountability.
While the adoption of performance measurement systems has been pervasive in the public and nonprofit sectors, however, they are not always well conceived and constructed, these systems may not be used, and they are often not integrated into management and decision systems effectively. Moreover, the jury is still out regarding the extent to which performance management systems actually make a difference and help contribute to improved program and agency performance. It is not at all surprising, then, that performance management is a dominant topic in the current literature and research in the field of public management as well as in professional graduate education programs preparing students for careers as leaders in the public service.
The purpose of this book is not to promote performance management but rather to help readers understand what performance management systems are and how they function, and to design and implement them effectively. Although the title has been changed from the first edition to emphasize the broader focus on performance management itself rather than performance measurement as the central element of the process and two coauthors have been added, this book still bears a strong connection to the first edition in terms of approach, orientation, and organization. All chapters have been revised and updated extensively to reflect the substantial evolution and expansion of the field over the past ten years, the current context within which performance management is conducted, and newer approaches and practices aimed at making the enterprise more effective.
The organization of the book is similar to that of the first edition. The two chapters in part 1 introduce the field and provide an overview of the process for developing useful performance management systems. The five chapters in part 2 focus on the methodology of performance measurement in terms of developing performance frameworks, tying measures to goals and objectives, redefining performance measures as operational performance indicators, reporting performance data, and analyzing performances. The chapters in part 3 discuss the development and application of performance management principles in a variety of decision-making venues, including strategic planning and management, performance-informed budgeting, the management of programs and organizations, quality and process improvement, and comparative performance measurement and benchmarking. In addition, two new chapters have been added to this section, focusing on performance-based contracts and grants management and the stakeholder engagement processes. Part 4 concludes the book with a single summary chapter that discusses the design and implementation of effective performance management systems.
As with the first edition, this book is written with two audiences in mind. Although it is not explicitly designed as a textbook, it works well as a text or supplemental reading for primarily graduate courses in planning, public policy, and program evaluation, in addition to public and nonprofit management that have a performance-based orientation. It is also designed to serve as a resource to provide guidance for managers, professional staff, consultants, and others in designing and implementing effective performance management systems. The response to the first edition over the past ten years seems to indicate that it was useful for both the academic and practitioner communities, and we hope that will be the case with this edition as well.
Acknowledgments
Many people have contributed directly or indirectly to this book by providing opportunities for me to develop performance management systems, allowing access to existing systems, or serving as mentors by sharing with me their knowledge and experiences regarding the design, implementation, and use of performance measures to manage more effectively. These individuals, many of them long-time friends, include the late Thomas D. Larson, former secretary of transportation in Pennsylvania and former administrator of the Federal Highway Administration; the late Richard H. Harris Jr., director of the Center for Performance Excellence in the Pennsylvania Department of Transportation (PennDOT); Joe Robinson Jr., former director of PennDOT's Performance Improvement and Metrics Division; David Margolis, director of the Bureau of Fiscal Management at PennDOT; William E. Nichols Jr., general manager of River Valley Transit (RVT) in Williamsport, Pennsylvania; Kevin Kilpatrick, planning and grants administrator at RVT; James Lyle, former director of business process improvement at the Georgia Department of Administrative Services and executive director of Georgia Public Television; Gerald Gillette, former principal operations analyst in the Office of Child Support Enforcement of the Georgia Department of Human Resources; the late Terry Lathrop, former deputy director of the City of Charlotte, North Carolina, Department of Transportation; the late Patrick Manion, former deputy city manager of Phoenix, Arizona; Stuart Berman, former chief of the Epidemiology and Surveillance Branch, Division of STD Prevention of the US Centers for Disease Control; Earl Mahfuz, former treasurer of the Georgia Department of Transportation (GDOT); Jim Davis, former director of strategic development at GDOT; Amy DeGroff, program evaluation team leader, and Janet Royalty, data manager, at the Division of Cancer Prevention and Control at the Centers for Disease Prevention, and Kristy Joseph, unit manager in the Division of GLobal Health Protection at the Centers for Disease Control; Joey Ridenour, executive director of the Arizona State Board of Nursing; and Lindsey Erickson, project manager at the National Council of State Boards of Nursing (NCSBN), and all the members of the CORE Committee at NCSBN. I have enjoyed working with all these people and appreciate all I have learned from them regarding performance management.
In addition, numerous students in the master's program in public administration at Georgia State University over the years, as well as participants in numerous professional development programs I have conducted for the Evaluators' Institute in San Francisco, Chicago, Atlanta, Toronto, and Washington, DC, have provided insight regarding problems, challenges, and strategies for success in working with performance measures. I have also enjoyed and benefited from collaborating with good friends John Thomas and David Van Slyke, a colleague and former colleague at Georgia State, respectively, as well as former and current graduate students at Georgia State, including Lauren Edwards, Obed Pasha, Anita Berryman, and Robert Weishan, on a number of performance management–related projects. I wish them all well in their future endeavors in this area.
Finally, I express my sincere appreciation for Maria Aristigueta and Jeremy Hall, who have joined me in writing this second edition. I marvel at their heroic efforts in meeting demanding deadlines, lacking the head start that I had with this project, and, more important, their fresh perspective and differing orientations, exposures, and insights have made many meaningful contributions to this edition. I have enjoyed working with them both, and I look forward to the prospect of further collaboration with them on performance management or related topics in the future.
Ted Poister
Alpharetta, Georgia
August 2014
I am deeply grateful to Ted Poister for the opportunity to collaborate with him on the second edition of this book. He is a wonderful role model for those of us interested in performance and a wealth of knowledge. He is also exemplary in bridging the theory-practice divide so important to the advancement of this field. In addition, Ted Poister and Jeremy Hall are a pleasure to work with.
In the early 1990s, I was fortunate to have Joseph Wholey as a professor and dissertation adviser at the University of Southern California. Because he is firm believer in the use of performance for program improvement and a leader in the field of performance management, I benefited greatly from the chance to work with him. Like Ted, he saw great value in practice and considered it the laboratory for the field.
I am also indebted to my colleagues and staff at the University of Delaware who provide the environment and encouragement for excellence every step of the way. I am particularly grateful to the graduate students in my performance management course who have participated in case studies and contributed to my knowledge of current practices in the field. I have especially benefited from the assistance from Lorelly Solano, Christopher Kelly, and William Morrett.
Finally, I express gratitude to my family for their patience as I spent many weekends and evenings writing to meet the tight deadlines for this book. I am particularly grateful to my husband, Don Coons, for his unwavering love and support and to whom I dedicate my contributions to this book.
Maria P. Aristigueta
Newark, Delaware
August 2014
I express my sincere gratitude to a number of individuals who shaped my interest in performance management and have facilitated my work along the way. Of particular note, Ed Jennings (University of Kentucky Martin School) helped me to develop my first analytical framework from the performance perspective. I also extend thanks to Merl Hackbart, also at the Martin School, for providing me with a solid foundation in public budgeting; although I may not use it as often as I would like, that background certainly came in handy on this project. I owe a debt of gratitude to my dean, Marc Holzer, for supporting this endeavor and, more important, allowing me the opportunity to carry my interests in performance management into the classroom. I thank Michael Hail for introducing me to the world of grant management in 1998 and working with me to develop those skills over the fifteen years since then. And I thank my family for their enduring support during many long nights and weekends as this project came together. Most of all, I appreciate Ted Poister for being a supportive voice in the field for those of us who study performance issues and for allowing me the opportunity to join him and Maria Aristigueta on this project.
Jeremy L. Hall
Science Hill, Kentucky
August 2014
PART ONEIntroduction to Performance Measurement
Performance management—the process of defining, monitoring, and using objective indicators of the performance of organizations and programs to inform management and decision making on a regular basis—is of vital concern to managers in government and the nonprofit sector. The chapters in part 1 discuss the scope and evolution of performance management in these fields and locate it in the context of results-oriented approaches to management. They also convey the variety of purposes that can be served by measurement systems and a sense of why performance management is so important. A crucial point made in part 1 is that performance measurement systems are usually not stand-alone systems. Rather, they are essential to support and strengthen other management and decision-making processes, such as planning, budgeting, the management of organizations and employees, program management, process improvement, grants and contract management, and comparative benchmarking. Thus, it is imperative for system designers to clarify a system's intended uses at the outset and to tailor the system to serve those needs. These chapters also discuss the limitations of performance management systems, as well as the challenges and difficulties inherent in developing them, and they present a holistic process for designing and implementing effective performance measurement systems.
CHAPTER ONEIntroduction to Performance Measurement and Management
Performance management focuses organizations on results through the use of performance information in various decision-making venues. The practice of performance management had its origin in the early twentieth century, and through sporadic and varied implementation efforts, it has appeared in numerous permutations in a variety of settings at the municipal, state, and national levels. In spite of this lengthy history, it has been only since the 1980s that performance management has evolved into a burgeoning field of practice that permeates public and nonprofit administration at all levels and locations around the globe. It has been said that performance is pervasive (Radin, 2006), and that is a fair assessment. This book sets out to provide a clear understanding of the concept and practice of performance management in modern governance, which incorporates the current reality that public goods and services are provided by public, nonprofit, and private organizations and various combinations of these.
The scope of performance management is wide. It has become a central part of governance and decision making at all levels of government—domestic and international—and has begun to permeate nonprofit practice as well. Carolyn Heinrich (2007) refers to the rise of performance management as follows: “The rise of the development of performance management systems and practices has been nothing short of meteoric; both nationally and locally, performance management is now a goal or function of most governmental and nongovernmental organizations, and in many countries, legislation and cabinet-level entities have been created to support it” (256).
To extend our understanding, we first situate performance management within the broader field of public management, the implementation side of the public policy process. It is carried out by public servants in local, state, and federal governments in the United States and other governments around the globe. Public management encompasses the work of the bureaucracy, and as such it has increased in size and scope over time. The Progressive movement of the 1920s heralded an era of professional government based on rational principles. One manifestation of that shift was the development of the federal civil service system. The social, economic, and environmental policy programs of the 1960s expanded the scope of public management again. Now government has given way to the broader concept of governance, which takes into account the fact that public goods and services are increasingly delivered by third parties, including private sector firms, other levels of government, and nonprofit organizations (Frederickson & Frederickson, 2006).
Throughout these periods, there have been numerous reform efforts grounded in rationality—attempts to make government decisions and administration less political, and less subjective, through the use of objective decision strategies. Deborah Stone (1997) referred to this as the government rationality movement. But each rationality-based approach could also be viewed as reform oriented, intended to better hold bureaucrats accountable. Program evaluation, zero-based budgeting, strategic planning, and, of course, performance measurement all offer examples of such rationality-oriented reform strategies, though this is only a partial list. As Dubnick and Frederickson (2011) observed, there has been undue emphasis on implementing new reform strategies without sufficient attention to their potential problems. Romzek (2000) tells us that new reform strategies always introduce new accountability requirements that are added to, rather than replace, the old ones. Moynihan (2008) reflects on the relative ease associated with adopting performance measurement symbolically without the substantive commitment necessary to bring about the expected results. Adding a new layer of accountability expectations on top of existing systems without consideration for the integration of the new systems with the old creates myriad complex and confusing accountability expectations for those charged with implementing them. As one such reform strategy, performance measurement has at times fallen victim to the same pressures as other reform efforts.
In recent years, we have begun to develop a better understanding of what is necessary for performance measurement to generate the results it has promised. We distinguish between performance measurement and performance management in the literature and in practice. Performance measurement refers to the collection of data on key performance indicators; it is a relatively simple exercise, though practice has shown it to be difficult for governments with low technical capacity and stakeholder support (Berman & Wang, 2000) and difficult to implement under conditions of goal multiplicity or confusion (Koppell, 2005). Performance management refers to a strategic daily use of performance information by managers to correct problems before they manifest in performance deficiencies. Moynihan (2008), in a seminal investigation into performance measurement efforts at the state level, introduced the performance management doctrine, which offers three salient indicators of the sophistication of a performance measurement effort that characterize a shift from simple performance measurement to performance management: movement away from output measures toward outcome measures, the use of performance information in decision making, and the devolution of discretion to street level managers in exchange for responsibility for agency performance.
The challenge of performance management is thus to demonstrate outcomes resulting from the resources that the program, agency, or organization has consumed to appropriate managers, stakeholders, clients, and citizens. Performance management also strives to improve performance over time by using performance information to identify and correct deficiencies in the production process. The exact users of performance information vary from setting to setting, and so will their information needs, as we will see throughout the book. This implies that performance management systems need to be custom designed according to the purposes they serve. Over time, performance measurement has become further integrated into decision making, with data collected at various points suited to providing meaningful reports to support these purposes at the appropriate times. Poister (2010) advocates for three overlapping transitions: from strategic planning to strategic management, from performance measurement to performance management, and from using such tools independently toward better integration of strategic management and performance management.
As we explore the mechanics of performance management in detail, a number of questions from public management practice and research help to structure our understanding of performance management:
How does performance management fit within understood accountability frameworks?
How extensively has performance management been implemented at various levels of government?
What factors explain when and where performance management is adopted?
Under what conditions is performance management effective?
What is the relationship between capacity and performance, and what forms of organizational capacity are necessary to implement performance management effectively?
What special conditions affect the use of performance management in networked or intergovernmental settings where authority is shared and goal ambiguity exists?
And, of course, the most important question in this field of study is this:
Does performance management actually improve performance?
Public Management, Performance Management, and Accountability
This chapter introduces the concept of performance management and situates it within the broader field of public management. In the balance of this chapter, we review the history of the development of performance management from its origins to the present. We discuss the current state of performance management in both government and nonprofit sectors and the characteristics that have come to be associated with effective performance management in those settings. We explore the limitations of performance management; present a brief assessment of the major questions that currently motivate research in the field; and conclude the chapter with a quick synopsis of the significant applications of performance management in practice, such as budgeting and grant and contract management.
Performance Measurement and Performance Management Defined
Performance measurement has been defined by several notable scholars. Hatry (2006) considers performance measurement to consist of “regular measurement of the results (outcomes) and efficiency of services or programs” (2006, 3). Poister defined it as the “process of defining, monitoring, and using objective indicators of the performance of organizations and programs on a regular basis” (2008, 1). We adopt the following definition of performance measurement in this book: performance measurement is the systematic, orderly collection of quantitative data along a set of key indicators of organizational (or program) performance. The advancement to performance management requires expanding our definition to the following: performance management is the collection and purposive use of quantitative performance information to support management decisions that advance the accomplishment of organizational (or program) strategic goals.
The performance management framework organizes institutional thinking strategically toward key performance goals and strives to orient decision making toward greater use of performance information to stimulate improvement. This is an ongoing cycle of key organizational management processes, all of which interact in meaningful ways with performance measurement. Our conceptual framework is based on ongoing interplay among performance measurement and reporting, strategic planning and other types of planning, budgeting, ongoing management, and performance measurement and reporting, as shown in figure 1.1.
Figure 1.1
The Performance Management Framework
Performance measurement and reporting is the central element in the performance management model and is the unique feature that defines it as a performance-based approach to managing. Key sets of measures of agency and program performance are observed at periodic intervals and reported to appropriate managers or other decision makers in order to inform the planning, budgeting, management, and evaluation functions from a performance perspective. In addition, these other functions influence the performance measurement process, and thus the linkages between performance measurement and these other functions are all bidirectional.
At a strategic level, planning engages and solicits feedback from stakeholders, clarifies an agency's mission and vision, establishes strategic goals and objectives, and develops strategic initiatives. Within the framework of strategy that is developed, or even in its absence, other efforts develop plans for programs, projects, service delivery systems, and organizational processes. In a performance management framework, all of these planning activities are informed by data produced by ongoing performance measurement processes that provide information regarding current performance trends and current levels. In turn, the planning activities often identify performance measures needed to monitor goal attainment and the kinds of results that plans are designed to produce, and these measures are likely to become part of ongoing performance measurement processes.
Budgeting concerns the allocation of resources to fund programmatic activities and organizational processes. These decisions tend to be based on a mix of policy preferences, idealism, tradition, and political realities, but in a performance management mode, they are also informed, perhaps even influenced, by performance information relating resources to be expended to the results expected to be produced. Thus, performance-oriented budgeting is more likely to take efficiency and cost-effectiveness measures into account in comparing alternative investment packages and allocating resources with an eye toward the amount of products or services to be delivered or the results or outcomes to be produced. Budget decisions along these lines also influence the kinds of indicators that are emphasized in performance measurement systems.
The management component of figure 1.1 focuses on the implementation and management of strategies, programs, projects, services, and new initiatives on an ongoing basis. In a performance context, this emphasizes managing, motivating, and incentivizing people, organization units, and programs with an eye toward achieving desired results. This approach to management is also more likely to emphasize the development and maintenance of performance-oriented organization cultures and, where appropriate, promote performance orientations and approaches through extended networks on which producing desired results depends. Such management approaches may suggest additional kinds of performance indicators regarding employee productivity, quality, organization climate, or customer service, for example, to be monitored on a regular basis.
Finally, the evaluation component of the model focuses principally on analyzing the performance data being reported, identifying performance issues, and assessing their implications for improving performance. However, at times other types of evaluative effort are required. Sometimes assessments based on the performance data and other information suggest the need to undertake more in-depth evaluative activity, such as formal program evaluations, quality or process improvement studies, management and budget analyses, policy analyses, or evidence-based research. While the information generated by the more routine performance measurement and reporting processes certainly feeds into and informs program evaluations and these other more in-depth evaluative efforts, the latter may well suggest additions to or revisions in the indicators monitored through the ongoing performance measurement process.
Although the performance management model shown in figure 1.1 constitutes a conceptual cycle of activities and decision making, it is not intended to represent steps in a process that follow one another in regular cycles over time. Rather, as a report by the National Performance Management Advisory Commission (2010) points out, the processes included in the model operate on different time lines with planning on a long-term basis (perhaps two to five or more years), budgeting focusing on one or two years, ongoing management operating on a day-to-day basis, and many evaluation efforts undertaken sporadically. And performance measurement and reporting processes typically focus on regular weekly, monthly, quarterly, or annual intervals. Nevertheless, while it can be messy, performance management can be held together by the measurement and reporting function at the center of the model, coupled with a disciplined approach to aligning plans, budgets, management practices, and evaluation activities around common goals and objectives and their accompanying performance measures.
When the adoption of performance measurement and management is substantive and not simply symbolic, the purpose of these practices is rather straightforward. Performance measurement strives to document the level of performance achieved during a specified period of time using measures (and indicators) selected to reflect the purposes of the performance measurement effort. In other words, performance measurement might track inputs, activity levels, outputs, or outcomes; it might use measures of efficiency, effectiveness, equity, cost-effectiveness, or customer satisfaction, for example; and it might be collected to inform internal audiences such as employees or managers or external audiences that include political principals and stakeholder groups. The purpose of performance measurement determines the set of measures and indicators selected, as well as the timing of data collection, the methods of analysis to be used, and the reporting formats and frequencies. Performance management is the strategic use of this performance information in management decision making to maximize key organizational goals through a variety of decision-making areas, including management, budgeting, personnel, contracts, and quality and process improvement. Through informed decisions about common management functions, including staffing and budgeting, for example, performance management allows managers to right the course as deviations are detected that may jeopardize expected performance levels. A good performance management system relies on the collection of valid, reliable, and timely performance information; direction of that information to appropriate users at appropriate times with appropriate discretion to act; and the use of that information to make changes, minor or major, using the tools at their disposal.
The most common goals of performance measurement and management are to reduce costs (increase efficiency), increase effectiveness (or cost-effectiveness), maintain equity, and deliver high-quality products that are met with high levels of customer satisfaction. At a deeper level, the purposes may include accountability to citizens, justifying increased resources, and political and popular support, among others. Deeper still, the goal may be to remain competitive with benchmark cities, attract residents and businesses, and portray the image of a progressive community with a high quality of life.
The first edition of this book referred primarily to performance measurement, because that was the state of the art at that time. Now the field has evolved into a more sophisticated, more strategic approach to management, making the term performance management more applicable. Moynihan (2008) describes what he calls the performance management doctrine, which has three primary components that distinguish it from simple performance measurement. Let's begin there: performance measurement is the quantitative tracking of agency or program performance, usually accompanied by a reporting effort to either internal users or to the public. Moynihan (2008) indicates that performance management must evolve from this point of origin by (1) shifting from a focus on outputs—the direct results of agency activities—toward a focus on outcomes—the end result of the agency's actions on its goals; (2) developing a culture where performance information is used to inform agency decision making, not simply collected in a separate process; and (3) devolving decision-making discretion to frontline managers in exchange for responsibility for outcomes. To summarize, performance management refers to the integration of performance information with other management processes, including human resources, budgeting, and general management.
Performance information is useful to determine what an organization has done with the resources it has been given in a particular period of time, linking it closely with the responsiveness dimension of accountability. Over time our ability to measure and track performance has improved and become increasingly sophisticated. We examine the details of these improvements later in the book, but this refers generally to the exercise of metrics that consider outcomes and impacts rather than inputs and outputs, and engage in comparison and analysis against past performance and peers.
While most of the early literature on performance measurement was largely descriptive or conceptual (Altman, 1979; Hatry, 1980; Poister, 1982, 1983), a number of more recent books and articles examine the performance movement in depth. These writers can be generally organized into three groups: the proponents (such as Wholey & Hatry, 1992; Behn, 2003), the pragmatists (such as Moynihan, 2008; Frederickson & Frederickson, 2006), and the skeptics (Radin, 2006, for example). A limited number of studies examine the effectiveness of performance measurement or management efforts on actual performance levels. This more recent literature has mixed findings, as we discuss in chapter 15.
Public Management and Performance Management
Public management refers broadly to the management of public organizations to achieve public purposes. The field of practice and study has shifted over time with prominent changes in public bureaucratic institutions through the establishment of a series of new traditions of public management, including strategic planning, performance management, privatization and contracting, and a stronger focus on market-based approaches. Many of these are components of the new public management movement, though other traditions evolved independently. There has been an increase of professionalization within the civil service, with the result that principal-agent relationships that reinforce a command-and-control structure are no longer seen as the only factor necessary to understand agency or employee actions.
New Public Management (Hood, 1991) refocused public sector management toward greater efficiency, highlighting the use of market-based practices borrowed from private sector management, including contracting out and outsourcing. The result has been an explosion of strategic planning, which brings a strong goal orientation, as well as efforts to assess performance and adjust strategy to increase it. The movement calls for greater managerial discretion in exchange for greater responsibility for outcomes. It suggests the use of incentives rather than principal-agent relationships as the mechanism of control.
Bob Behn, in a widely cited Public Administration Review article from 1995, raised three “big questions” for public management:
Each of these questions highlights the role of managers in bringing about improved performance, and the questions collectively suggest that performance is at the core of public management. Performance management, then, is a management approach that we ought to develop with an eye toward reducing unnecessary rules; it offers a prospect for reducing micromanagement. Motivation of individuals working within an organization is a core component of performance management (Behn, 2003). And finally, measuring achievements in order to bring about performance improvement means that we need to measure things that matter, at an appropriate time, and in a way that can be linked directly to actionable management decisions. Within the framework of micromanagement, Behn (1995) identifies a number of more specific management questions, most of which have more than a tangential connection to performance measurement, including trust, governance, entrepreneurship.
Behn (2003) offers another look at performance measurement from the perspective of its many overlapping purposes. He identifies eight specific managerial purposes where performance measurement may play a meaningful role: to evaluate, control, budget, motivate, promote, celebrate, learn, and improve. Behn sees improvement as the central purpose, with the preceding seven serving subordinate roles that are pursued with the overall goal of improving performance.
Whereas Behn (2003) focuses on managerial purposes that performance measurement may serve, Hatry (1999) describes a number of managerial functions that performance information can support in different decision venues: (1) responding to elected officials' and the public's demands for accountability, (2) making budget requests, (3) internal budgeting, (4) triggering in-depth examinations of performance problems and possible corrections, (5) motivating, (6) contracting, (7) evaluating, (8) supporting strategic planning, (9) communicating better with the public to build public trust, and (10) improving (Hatry, 1999). As with Behn (2003), Hatry (1999) emphasizes the role of performance improvement as the principal concern of performance measurement.
Performance management not only supports public management but helps to define and structure it in an era when performance is customarily the foremost goal of public management. By providing managers with information at key decision junctures, strategic choices will result in improvement along those performance dimensions that are prioritized.
Performance Management and Accountability
To fully understand the concept of performance management, we need to begin with the reason for such broad interest in the topic, which can be summed up in a single word: accountability. Hatry (2006) indicates that a major use of performance information is “to establish accountability” (3). Accountability itself is a broad concept that refers to a number of more specific forms or conceptual dimensions. Several authors have attempted to clarify the various types of accountability expectations that public managers face on a daily basis to better understand their behavior and to temper our expectations for success with the reality of modern public and nonprofit administration. Yang (2012) refers to accountability as a hallmark of modern democratic governance and a central concept in public management. Dubnick and Yang (2011) suggest that all major schools of thought in public administration are arguably about accountability and all major debates about government reforms are related to accountability.
Accountability systems are often the source of important public sector problems. As Yang (2012) notes, balancing multiple expectations resulting from different forms of accountability is easily said but not easily done. He identifies six conclusions about the accountability literature: conflicts among accountability pressures can lead to problems; overreliance on particular types of accountability can lead to problems; there is no perfect accountability model, and each can devolve into an unproductive or illegitimate reality; principal-agent-based accountability is limited; third-party governance and hybrid organizations such as public-private partnerships require special accountability capacities; and, importantly, “managerial reforms such as performance measurement and reinvention have complications in traditional forms of accountability” (260). Let's examine a few prominent accountability frameworks to get a sense of the relationship of performance measurement and management to public accountability.
Koppell (2005) refers to five distinct dimensions of accountability that might be explored: transparency, liability, controllability, responsibility, and responsiveness. He suggests that the first two are foundational requirements necessary to realize the remaining three. Transparency refers to our ability to see what government did and how it did it; this is a form of accountability to citizens and stakeholders at large. Liability refers to the penalties that are imposed for failure to adhere to the high standards of public law and administration. The remaining three dimensions are much more relevant to our topic of inquiry, however. Controllability refers to the ability of policymakers and decision makers to sway the bureaucracy into conformity with their expectations. This is what we think of as political control in political science, but it is broadly applicable to decision-making (legislative and executive, such as the president, Congress, and boards of directors) bodies and the implementing administrations they oversee. Inertia, culture, information asymmetry, and a variety of other factors have been shown to limit controllability, reducing the ability of those leaders to fulfill their policy agendas. Performance measurement requirements offer one mechanism (alongside oversight and others) for policy leaders to exert stronger vertical control over the actions of the administration. By clearly defining what is expected, measuring actual performance, comparing it to established targets or benchmarks, and providing proper positive and negative incentives, performance measurement promises to enhance controllability.
The responsibility dimension of accountability refers to an organization's accountability to the structural requirements that constitute its mandates. These typically take the form of laws, statutes, ordinances, and so on. The key question of interest is simple: Did the agency or organization follow the rules? Accountability here can be supplemented by a proper accounting of activities and outcomes that were accomplished. To be brief, performance monitoring can allow us to determine whether an agency fulfilled its obligation under the law by providing data against which to base judgments.
But the real home of performance measurement and management for accountability rests soundly in the dimension that Koppell (2005) refers to as responsiveness. Here we are concerned with the needs and demands of citizens and stakeholders. What do they need? What do they expect from the agency or organization? This dimension is neatly intertwined with the organization's mission—its reason for being. So with an understanding that performance measurement is an approach to enhancing accountability, we need to go a step further and clearly distinguish performance measurement from performance management.
Other models, such as Yang (2012), explicitly link accountability systems, felt accountability, and performance. Accountability, according to Yang (2012), is emergent, and not simply a set of rules or tools. The interplay of structure and agency (what Heinrich, 2007, and Lynn, & Hill, 2008, would refer to as craft) result in an accountability reality that changes and shifts over time. The felt accountability dimension is important because it helps to explain how actors perceive, prioritize, and respond to multiple accountability pressures. This means that we can best understand accountability by exploring the information and signals that bureaucratic actors receive and how they respond. In other words, the accountability that such an actor feels is more important than the structures or rules that are in place, especially in a system with multiple such overlapping rules and structures that have been added as reforms over time. This perspective makes it possible to understand accountability in networked and contracted governance arrangements as well.
Romzek and Dubnick (1987) identify four types of accountability that public agency managers typically use to manage the accountability expectations they face: legal, political, bureaucratic, and professional. It is important to understand that these varied types of accountability are sometimes found to be in conflict with one another, such as in the case they present of NASA and the space shuttle Challenger disaster. The interplay of two factors defines these four distinct accountability systems: “(1) Whether the ability to define and control expectations is held by some specified entity inside or outside the agency; and (2) the degree of control that entity is given over defining those agency's expectations” (Romzek & Dubnick, 1987, 228). They present this as a two-by-two table to reveal the interplay of the two factors (see figure 1.2). The act of performance management most closely resembles their conceptualization of professional accountability. As Romzek and Dubnick (1987) put it:
Those employees expect to be held fully accountable for their actions and insist that agency leaders trust them to do the best job possible. If they fail to meet job performance expectations, it is assumed they can be reprimanded or fired. Otherwise they expect to be given sufficient discretion to get the job done. Thus, professional accountability is characterized by placement of control over organizational activities in the hands of the employee with the expertise or special skills to get the job done. The key to the professional accountability system, therefore, is deference to expertise within the agency. (229)
Figure 1.2
Romzek and Dubnick's Types of Accountability Systems
Source:
Romzek and Dubnick (1987, 229).
Deference to expertise, of course, mirrors Moynihan's (2008) charge for greater managerial discretion in exchange for performance-based accountability.
