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Lanjutan Jurnal
Enhancing the perceived impact of managers' work through a broad goal scope
“You know, whether I now have 10 or 12 thousand more or less, I can truly say to
you that that for me is no motivation. [...] Because they pay us well. We have
everything we want. Iya. So someone, who, what do I know, is motivated by one, or
maybe two or three months' salary, if that is their only motivation, then all I can say
is that such people are in the wrong place.” (Manager I; 53).
Also the research did not unequivocally confirm a shift in public managers'
behaviour towards a style more in line with the private sector for all countries (see
Xu-hong, 2004), which supports the view of prior research that involvement in
meaningful public service provision is an important incentive for public managers,
compared to private sector managers (Rainey, 1982). In general, managers in Citee did
acknowledge their multidimensional accountabilities and wished to have a dialog with
all involved parties. Correspondingly, Kroll (2015) identified stakeholder involvement
as the second most important factor for enhancing the use of performance-measurement
information.
To encompass the broad impact that SOEs have on society in general, the present
study found that PMSs should sensitize managers to and enhance dialogue concerning
all accountability dimensions. Examples of diverse dimensions not yet included in
Citee's PMS but of crucial importance for the fulfilment of SOEs' tasks were reported in
many of the interviews. These examples were presented according to the introduced
administrative, political, professional, and social accountability dimensions. Enhancing
sensitivity to these accountability dimensions within goal setting should increase
managers' obligation to justify their actions towards all groups and not just
administrative bodies (Pollitt, 2003; Schlenker et al. , 1994).
With respect to administrative accountability, Citee had laid down financial
requirements that managers must fulfil; thus “...to work economically as possible for the
city” (Manager II; 25) was at the core of SOEs administrative accountability.
“So that's the main thing; you know how bleak our budget is, I think soon we will
become over- indebted. I think the capital will soon be exhausted, I no longer
remember exactly, but I think by the end of the year at any rate.” (Manager II; 25)
“There's a market master who maintains order in the market, ie they check whether
the market regulations set for us by the board are being complied with.” (Manager II;
9)
But the ruling political parties, too, influenced the goals of the SOEs, with their
political ideas shaped by the expectations of their voters. This also encompassed, for
example, youth policy, with “talks [being] held with the youth welfare office” (Manager
VI; 21). Furthermore, every company specialized in a certain professional field
containing specific professional standards and benchmarks, and, consequently,
“prescribed rules and regulations” (Manager IV; 7) were important and formed part of
day-to-day work. The regulations were diverse, and ranged from broader, local area
transport plans to more detailed ones.
“We have a local area transport plan which prescribes certain quality standards for
the public transport network. At the same time, we have set as part of Green Capital
targets for the split model – a gradual increase by 2035 from the current 19% to
25%.” (Manager V; 5)
With regard to socially imposed goals, this study proposes that the public voice
should become visible within set goals and performance standards. Related suggestions
in the literature include user boards, town meetings, public hearings, and customer
surveys (Sørensen and Torfing, 2012) as ways of integrating the public voice into
PMSs. However, social goals have, up until now, been absent from the goal-setting
processes in Citee, although non-profit enterprises in particular were very much aware
of their social accountabilities. They also recognized the social aims involved; for
example, “[What] we pursue is the provision of cultural necessities for the region”
(Manager I; 20).
The case of Citee furthermore illustrates that a holistic approach to all accountability
dimensions is crucial, as interdependencies exist with other empowerment components.
However, ambiguities resulting from diverse accountabilities could lead to an
unmanageable system and dysfunctionality (Johnson, 2001; March and Olson, 1995). In
Citee, in cases in which social accountability or professional accountability was
strongly perceived but administrative accountability was not (due to a lack of strategic
information), the perception of goal clarity was diminished, as financial goals lost their
substantiality without the necessary strategic background, leading to dramatic financial
grievances, even in cases where past financial results had been universally outstanding:
“Everyone knows – and I am checking the actual numbers right now – that next year
we will have a deficit of 6.3; the following year, 7.2; the following year, 8.1; then
8.7, and then 9.9 million.” (Manager I; 75)
“In perspective, the financial targets in particular are no longer achievable [...], I
have an enormous need for maintenance, which has also not been displaced by the
city.” (Manager V; 79)
Discussion
In exploring the underlying case, this study has shown how PMSs that are designed in
accordance with the concept of psychological empowerment are able to foster
managers' active work role and thus support the effective governance of SOEs. An
empowerment-friendly performance measurement design was proposed in accordance
with the four dimensions in which psychological empowerment is manifested: meaning,
competence, self-determination, and impact (Thomas and Velthouse, 1990).
Considering each dimension in turn, first, the meaning of SOE managers' work can
be fostered through the provision of clear goals within a PMS. Goal clarity necessitates
that the goals imposed by administrative as well as political bodies be transparent. Only
in this way can a formal and institutional basis be established from which SOE
managers can form a clear view of the value that they place on their work in relation to
their own ideals or standards. However, a PMS needs to become established itself for it
to be perceived as clear and useful for assessing the meaning of one's work. As was
shown in the case of Citee, this process can be additionally supported through extensive
communication, and, within this communication performance, priorities can be
established. Goal transparency can be fostered through a two-way exchange with
politicians (who are commonly reluctant to formulate and set transparent goals), while
procedural fairness can be fostered through transparent goal allocation. All of these
aspects helped the managers of Citee's SOEs view their work as meaningful. In this
context, it is also helpful to use information systems as communication channels,
especially between SOE managers, administrative bodies, and politicians (Behn, 2003;
Van Dooren, 2005; Ho, 2006), and communication channels can thus support reliable
documentation. With regard to the multiple accountabilities that SOEs face, procedural
fairness in a PMS can further support the active work role of managers as it increases
their acceptance of goal-allocation processes. The case study showed that PMSs that
standardize performance measurement procedures for all SOE managers through higher
acceptance of goals also increase the perceived value of their work and thus the
meaning they attribute to their own work.
Conclusion
Previous studies have tried to determine whether PMSs lead to better outcomes in the
public context, with mixed results (Greiling, 2006). Some scholars have analysed the
factors that foster the use of the provided information (eg Ammons and Rivenbark,
2008; Kroll, 2015), while others have begun to examine how PMSs should be designed
– as opposed to whether or not they should be implemented – to produce the desired
effects (eg Padovani et al. , 2010). However, to the present paper's authors' knowledge,
no study has been carried out within the specific context of SOEs. This study therefore
investigated how PMSs might be designed to increase the governance effectiveness of
SOEs.
It found that, for the complex settings of SOEs, effective governance solutions
require compatible governance mechanisms, as combined governance solutions can
adapt more flexibly to the changing needs of SOE governance and respond better to
historically developed, coexisting governance mechanisms (Bruton et al. , 2015;
Christensen and Lægreid, 2007; Grandori, 1997, 2001b). Instead of outlining the
contradictory elements of coexisting governance mechanisms, this study searched for
possibilities for further developing existing ones. In particular, it was investigated how
a PMS, as the basis on which most NPM governance mechanisms are built, can be
combined with self-steering governance mechanisms. When it comes to public value, it
is important that SOE managers take an active role in achieving public goals rather than
merely pursuing their own interests. Empowerment at work supports this, as it leads to
increased task motivation (Hall, 2008; Spreitzer, 1995). Thus, we further developed a
model PMS according to the dimensions of psychological empowerment (Conger and
Kanungo, 1988; Hall, 2011; Seibert et al. , 2004; Spreitzer, 1995; Thomas and
Velthouse, 1990), and proposed an empowerment-friendly performance measurement
design.
The study sought to discover under which conditions PMSs can empower SOE
managers, and hence, assuming a plurality of causal factors within the different
dimensions of empowerment, causal process tracing was chosen (Blatter and Blume,
2008a, 2008b; Blatter and Haverland, 2012; George and Bennett, 2005) for the “Citee”
single-case evaluation. The underlying causal mechanisms of the study's theoretically
deduced concept thus were traced. Based on in-depth interviews with the executive
managers and the CEOs of various German SOEs within the “Citee” case city, the study
found that a clear, transparent, and fairly designed PMS, along with a balanced
approach to goal difficulty and the provision of strategic information through
performance-measurement practices, positively influences all four cognitions in which
empowerment is rooted (meaning, competence, self- determination, and impact). It was
shown that these practices, together with a broad view and discussion of the manifold
SOE goals, could empower SOE managers. Consistent with these findings, an
“empowerment-friendly” performance measurement design was presented and the
implications for governance research in the post-NPM decade were outlined. This
facilitated the modelling of a theoretically derived, empowering PMS, enhancing the
framework with concrete propositions for its arrangement.
Furthermore, the study's findings contradict research streams that assume that
output-based governance mechanisms and self-governance mechanisms are
incompatible (Fimreite and Lægreid, 2009; Sørensen, 2012). Instead, this paper calls for
a complementary approach, and shows how elements of empowerment help to construct
PMSs that empower managers towards an active work role. Thus, it follows recent
literature that takes a holistic view of governance mechanisms (Christensen and
Lægreid, 2007, 2010; Christensen, 2012; Egeberg and Trondal, 2009). From this
standpoint, combined governance mechanisms offer an effective solution to complex
governance settings, as they can flexibly adapt to constantly changing and layering
governance needs (Christensen and Lægreid, 2010; Grandori, 1997, 2001a; Morner and
Misgeld, 2013).
Finally, this paper contributes to existing research in that it links the proposed
empowerment- friendly PMS to contextual factors – namely, the highly complex and
volatile setting of SOEs that face multiple and diverse accountabilities.
The case study reveals how PMSs can be designed (a) according to the principles of
goal clarity, transparency, and procedural fairness to foster managers' perceived
meaning of work; (b) to ensure exploratory use of performance information and the
controllability of performance targets, both of which foster managers' perceived levels
of competence; (c) to enable participation and provide strategic information in order to
enhance managers' perception of self-determination; and (d) to integrate multiple
dimensions of public value creation and non-financial measures in order to increase the
perceived impact of managers' work. Therefore, administrative bodies, ownership
managers, and municipal finance officers are advised to re-think existing governance
structures in order to empower managers through effectively designed PMSs and
prevent them from following their own interests. Previous studies have described public
managers as increasingly turning towards their self-interests and neglecting their public
tasks (Edeling et al., 2004). The present case study, however, observed SOE managers
as highly and intrinsically motivated by the higher-level public services that their
enterprises are providing. Practitioners in the field of public administration might
beneficially act on this paper's findings by placing a stronger emphasis on all the
dimensions of empowerment (namely, competence, self-determination, and impact) as
central regulators of performance measurement practices in order to enhance present
levels of public-service motivation.
Limitations
This study focused on performance measurement practices. From a content-related
point of view, however, it is also important to assess the reasons why performance
information is being measured. For the public sector, strategic decision making,
learning, controlling, and budgeting as well as sanctioning and rewarding are revealed
as purposeful reasons for measuring performance information (Behn, 2003; Van Dooren
et al. , 2010; Kroll, 2015; Moynihan, 2009). Accordingly, van Veen-Dirks (2010)
concluded that, depending on their use, PMSs could be adapted. In the present case, the
significant underlying performance information use concerned the effective governance
of SOEs. However, different recommendations might be derived for other purposes.
Also, the context of the study's findings was restricted to a German setting, which
provides opportunities for further research in other countries. Likewise, Citee was a
specific example, facing as it was the dilemma of extreme financial pressure (Döhrn et
al., 2013; Schwarting, 2004). However, the study's findings might lead to different
empowering goals and structural conclusions in other municipal settings.