PERFORMANCE MANAGEMENT

OF PUBLIC ORGANIZATION
How does strategy relate to performance?
How and to what extent is strategy (the forming of strategy in
a public services organization) a determinant of performance?
 • What is the impact of strategically
managing a public services organization
on its performance?
• What is the influence of managers and
the managerial function (‘independent
MAIN QUESTIONS variable or cause’) on the performance
of public services organizations
(‘dependent variable or effect’)?
• Does the level of performance change
(improve) because of the ‘strategic
choices’ that are made in a public
services organization, as contrasted to
the absence of strategy case?
WHAT IS PERFORMANCE?

"If you can't define performance, you

can't measure or manage it”
 Micro level: individuals (managers,
politicians, civil servants)
• performance administration and
DIFFERENT LEVEL OF measurement
PERFORMANCE
MEASUREMENT Mezo level: organizational
performance
• performance management

Macro level: policy evalutaion

• performance governance
 Behaviour
, process

Individual performance, work processes, work flow Performance

OUTPUT - concrete deliverables expected from the

organization depending on its role and mandate. Goods,
products, services. outcome output

OUTCOMES are the benefits and impacts of those

outputs; they are the rationale of the outputs.
Strategic goals of the organisation, Needs of users,
customer satisfaction, economic contributions
 - Effectiveness -
outcome

„doing the right thing”

Outcome/goal Efficiency -
output

„doing things right” Economy

Output/input

Input - resources used

Public
organization
THE PROBLEMS OF DEFFINING
VALUES
 BASE OF PERFOMANCE
THE ACHIEVEMENT OF COLLECTIVE GOALS
BY DUE PROCESS’

ECONOMIC APPROACH VALUES

• Economy: resources
• public interest
• Efficiency output/input
• Individual interest
• effectiveness : outcome/input • Professional interest, organizational
• Sustainability: long-term relationship • Legal interest
between the needs and the • Political interest
resources on which the organization
may rely to address such needs

value ‘in the singular’
• how to run the valuing process, and
encompassing whom in such
process
values ‘in the plural’
• value systems in the public sector
• Complex
• derive from multiple sources (individual, professional,
organizational, legal, public interest)
• serve as instruments to accommodate multiple interests
• change over time
• Challanged and controversial
• The multiple and sometimes competing objectives of
public organizations may make it very hard to track the
impact of strategy on performance.
WHAT CREATES GOOD
PERFORMANCE?
 Leadership
•encouragement, guidance and
support Strategic management

Contextual (situational) Personal factors:

factors •Motivated workforces, skills,
• internal and external commitment
environmental pressures and
changes.

Job description
KeyPerformance Indicator
systems analysis- (KPI)
variables that affect the Performance related pay
System factors:
day-to-day functioning •Measurement, instruments
of org
 WHAT IS PERFORMANCE
MANAGEMENT?

“Performance Management is what you do with the

information you’ve developed from measuring
performance.”
 „A system that generates PERFORMANCE
INFORMATION through STRATEGIC
PLANNING and PERFORMANCE
MEASUREMENT routines, and connects this
information to decision venues, where ideally the
information influences a range of possible
DECISIONS” Moynihan 2008

THE REASO N FO R
M E AS U RI N G PE RFO RM AN C E
WITHIN THE PU B L I C S E C TO R
the need for survival and development of
the organization;
inability of other approaches and tools
for quality assurance;
inefficiency of mechanistic processes,
combined with the absence of
adequate administrative infrastructure
to improve the organization;
the revenue growth by reducing quality
failures;
the innovation in the method of product
or service creation (Dervitsiotis, 2005).
14
 PE RFO RM AN C E
M AN AG E M E N T I S WHAT YO U
DO WITH THE IN FO RM ATIO N
YO U’VE DEVEL O PED FRO M
M E AS U RI N G PE RFO RM AN C E .
“Know where to find the
information and how to use
it - That's the secret of
success” - Albert Einstein
 defining and setting organisational and individual aims and objectives;

corporate planning;

linking organisational strategy and service objectives to jobs and clients;

MANAGEMENT FUNCTION assessing the results through personal evaluation using relevant
IN PERFORMANCE performance indicators;
MANAGEMENT
identifying staff training and development needs;

performance agreements or contracts;

using the knowledge gained through training to modify performance

attitudes;

external and internal communication systems;

organisation development (OD) and performance review

 • to empower employees to respond
effectively to customer concerns
• enhance the delivery of public services
• Enable to meet service objectives by a
greater internal focus on the employees
BENEFITS delivering the service
• Growing Managers’ awareness of employee
satisfaction as one of the model’s core
components and key component of
performance
PERFORMANCE MANAGEMENT
PARADOX

The contradiction of performance management

https://www.youtube.com/watch?v=UW_RCbP1oSE

18
 • 1. Fallacy of the concept, principles and elements of TQM.
TQM requires continuous and permanent change.
• 2. Lack of involvement of the administration. Without the
support of senior management, efforts will be futile (Chen
et al., 2004).
• 3. Difficulty of culture change, which prevails in the
organization.
• 4. Lack of attitude in the public administration focused on
the citizen / customer, as well as the lack of competitive
environment.
OBSTACLES
• 5. Orientation of the public sector in the service of a
“political clientele”.
• 6. Rigid wage system and lack of motivation.
• 7. Blockade people - keys from active participation in the
proceedings.
• 8. Degraded “psychological” environment (recognition -
reward).
• 9. Civil human resource management (general rather than
specialized education and training, lack of job descriptions,
rigid hierarchy, political interference, lack of mobility and
exibility of sta , static and undi erentiated payroll, etc.).
• 10. Lack of measurability and performance assessment.
 HOW TO MANAGE?

Different approach of performance management

Process oriented Process oriented
• Process Re- external and
engineering internal focus
• Proces Management • TQM
• Value chain

21
PUBLIC VALUE
CHAIN
THE ORIGIN OF VALUE CHAIN MODEL

• The value chain itself describes the full range of

activities which are required to bring a product or
service from conception, through the different
phases of production (involving a combination of
physical transformation and the input of various
producer services), delivery to final consumers,
and final disposal after use (Kaplinsky and Morris,
2000).
 SOURCE: PORTER, 1998
FIGURE 1. PORTER’S VALUE CHAIN
Supportive
activities

Primary activities
 Demands from 3
Values Value chain
macro segments
• 1. User value; • people • 1. Employee
• 2.Value for wider • enterprises satisfaction and
groups; • Institutions (PA commitment;
• 3. Political value; bodies and Non- • 2. Citizen/client
• 4. Social value; Prof O) service satisfaction;
• 5.Environmental • 3. Citizen trust and
value. confidence in
public institutions.
• 6.Value for money
PUBLIC SECTOR SERVICE
VALUE CHAIN

Source: Heintzman and Marson, 2003

 TOTAL QUALITY MANAGEMENT
INTEGRATIVE PERFOMANCE MAN AGEMENT APPROACH

Total Quality Management (TQM) consists of Organization wide efforts to install and
make permanent a climate in which an Organization continuously improves its ability
to deliver high quality products and services to Customers.
TQM consists of tools and techniques of Quality Control
 Quality as excellence;

WHAT IS QUALITY Quality as value;

“The Totality of features and Product based: Quality

characteristics of a Product or as conformance to
Service that bears on its ability specifications;
to satisfy given needs.”
(American Society for Quality (ASQ))
Quality as meeting
and/or exceeding
customer’s expectation
 COMMON ELEMENTS OF TQM

Customer
orientation

Integration
long term, and team
continual
work

TQM leadership
factual and
commitment

Strategic, process
systematic approach
 CONTINUOUS IMPROVEMENT

Structure Process Motivation

• Strategy & Design • Support & Stimulate • ‘Carrot & Stick’
• Documented Procedures for all Key
Processes
• Clear understanding of appropriate
equipment and working environment
• Methods of monitoring and controlling
critical Quality Characteristics
• Approval Processes for buying equipment
• Criteria for workmanship, written
standards , samples
 • F find a process to improve
• O organize an improvement
effort.
• C clarify the current process.
FOCUS • U Understand process variation
• S select improvement strategies

32
 PDCA

Planning Phase

• employees have to come up with their problems and queries which need to be addressed. They need to
come up with the various challenges they face in their day to day operations and also analyze the problem’s
root cause. research and collect relevant data which would help them find solutions to all the problems.

Doing Phase

• employees develop a solution for the problems defined in planning phase. Strategies are devised and
implemented to overcome the challenges faced by employees. The effectiveness of solutions and strategies
is also measured in this stage.

Checking Phase

• Checking phase is the stage where people actually do a comparison analysis of before and after data to
confirm the effectiveness of the processes and measure the results.

Acting Phase

• In this phase employees document their results and prepare themselves to address other problems. 33
 COMMON ASSASMENT FRAMEWORK

• The CAF has four main purposes:

• To introduce public administrations to the principles of Total Quality

Management (TQM) and gradually guide them, through the use and
understanding of self-assessment, from the current "Plan-Do" sequence of
activities to a full fledged "Plan-Do-Check-Act (PCDA)" cycle;
• To facilitate the self-assessment of a public organisation in order to arrive
at a diagnosis and improvement actions;
• To act as a bridge across the various models used in quality management;
• To facilitate bench-learning between public-sector organisations.
35
 HOW TO MEASURE?

DEFINING PERFORMANCE INDICATORS

Indicators provide an effective tool for

measuring progress and performance.
 WHAT ARE INDIC ATORS?
OECD/DAC

• A quantitative or qualitative factor or variable that provides a simple and reliable

means to measure achievement, to reflect changes connected to an intervention, or to
help assess the performance of a development actor.”
• .
USAID:

• “A variable, which purpose it is to measure change in a phenomena or process.”

UKAID & United States Institute of Peace:

• An Indicator “refers to a measure used to demonstrate change in a situation, or the

progress in, or results of, an activity, project, or program.”
 How do we know if and how much we have achieved
our objective?

Indicators are useful to:

• Measure progress and performance over time to evaluate the
effect of policy actions and plans.
• Provide information on the status, trend or performance of a
given system to inform the project team (responsible
organisation), stakeholders, the public and policy makers in a
simplified way.
• Translate data into policy relevant information (describe, show
trends, communicate results of implementing objectives).
• Identify areas for increased attention by an organisation.
 Focusing on a Bigger picture: maintaining a focus
small, manageable giving sufficient on the important
set of information “sense of the work areas and
bigger picture”. take strategic
decisions to address
problem areas.

making a project Starting with a

sustainable and small set of
allows responsible indicators that are
persons to act. feasible to monitor
and to improve
over time.
 INPUT

. • Resources (human resources, employee time, funding, infrasturcture) used to conduct activities and
provide services.

Activities:

• Individual tasks founded by the projects or programs. Smallest “unit” of work.

• meetings, conducting a training workshop, providing ITC equipment, providing expert assistance, drafting
policy or legislation, running a course or seminar,, creating a community task force, establishing an
advising center, conducting an information/education/communication campaign, issuing reports, etc.

Output

• Products and services delivered. Completed product of a specific activity, whether executed internally by
the organization or by an external contractor
• amount of products and services delivered
• number of exchange visitors participating in homestays, number of people trained, number of women
employed in management position
4
0
Intermediate outcome

• intermediate results

End outcome

• what the program has been designed to

achieve ultimately, “ambitious”
41
43
 OBJECTIVE:
I M P ROV I N G
THE
FA I R N E S S O F
C O U RT
P RO C E E D I N G
S AND THE
I M P L E M E N TA
TION OF THE
PRINCIPLE
OF EQUAL
T R E AT M E N T
AC T I O N :
I M P ROV I N G
JUDICIAL
TRAINING
Goals and Targets Indicators
Goal 1: Eradicate extreme poverty and hunger
Target 1.A: Halve, between 1990 and 2015, the proportion of 1. Proportion of population below $1 (PPP) per day
people whose income is less than one dollar a day EXAMPLE
2. Poverty gap ratio
3. Share of poorest quintile in national consumption
Target 1.B: Achieve full and productive employment and 1. Growth rate of GDP per person employed
decent work for all, including women and young people 2. Employment-to-population ratio
3. Proportion of employed people living below $1 (PPP) per
day
4. Proportion of own-account and contributing family
workers in total employment
Target 1.C: Halve, between 1990 and 2015, the proportion of 1. Prevalence of underweight children under-five years of
people who suffer from hunger age
2. Proportion of population below minimum level of dietary
energy consumption
Goal 2: Achieve universal primary education
For the full list, see:
Target 2.A: Ensure that, by 2015, children everywhere, boys 1. Net enrolment ratio in primary education
http://mdgs.un.org/unsd/mdg/Host.aspx?Content=Indicators/OfficialList.htm
and girls alike, will be able to complete a full course of 4 last
2. Proportion of pupils starting grade 1 who reach
primary schooling grade of primary 5
 The Development of Indicators

S SPECIFIC
The indicators need to be clearly articulated, well defined and focused. They should be clear to people with a
basic knowledge of the issue, programme or initiative.

The indicator should be measurable, that is, it has the capacity to be counted, observed, analysed, tested, or
M MEASURABLE challenged. The indicators should be able to determine the degree of completion or attainment. Using the same
methodology and information, findings should be repeatable and comparable.

A ATTAINABLE/Achievable The target attached to the indicator should be achievable within the scopes of the project/ programme.

R RELEVANT
The indicators should be able to detect change and be related to the specific situation they are “indicating”
information about. They should be measurable at an appropriate scale.

T TIME-BOUND The indicator should be attached to a time frame. Term dates for measurement should be included.
 THE UTILIZATION OF INDICATORS
OPPORTUNITIES
• Failures can be detected and
eliminated.
• Indicators can be adapted to
the circumstances.
• It is not necessary to measure
every single parameter to get
a “bigger picture” over the
whole progress.
THREATS
• A set with too many indicators
will tend to clutter the overview.
• Measuring indicators is a long-
term exercise.
• If the indicators are not defined
properly, and if measuring is not
done correctly and
conscientiously, it will not work.
 ANALYTICAL METHODS

• Flow Charts : Identifies Sequence of Activities in a Process. Fixes Position of

Employees in a Particular Activity. Pinpoint Places where Quality Measurements
should be taken.
• Check Sheets: Data in Columnar or Tabular Form. Include information relating
to specifications . Detect non-conforming Items, which may indicate Quality
Deficiency
• Pareto Diagrams : Based on Pareto Distribution and helps in identifying Quality
Focus Areas . Histogram of the Data from the Largest Frequency to smallest
• Cause & Effect Diagrams (Fishbone Diagrams): Ishikawa Diagrams, identifies
Root Cause of the Quality Failure
• Scatter Diagrams: Regression Analysis stating relationships between different
variables and their correlation coefficients
OBSTACLES
• 1. Fallacy of the concept, principles and elements of TQM.
• TQM requires continuous and permanent change.
• 2. Lack of involvement of the administration. Without the support of senior
management, efforts will be failed (Chen et al., 2004).
• 3. Difficulty of culture change, which prevails in the organization.
• 4. Lack of attitude in the public administration focused on the citizen / customer, as
well as the lack of competitive environment.
• 5. Orientation of the public sector in the service of a “political clientele”.
• 6. Rigid wage system and lack of motivation.
• 7. Blockade people - keys from active participation in the proceedings.
• 8. Degraded “psychological” environment (recognition - reward).
• 9. Civil human resource management (general rather than specialized education and
training, lack of job descriptions, rigid hierarchy, political interference, lack of mobility
and flexibility of staffing and undifferentiated payroll, etc.).
• 10. Lack of measurability and performance assessment.
• 11. Inadequate use of data. The information should be reliable, the measurement
process must be consistent and data recovery methods should be satisfactory
(Chen et al., 2004).
• 12. Lack of cooperation and teamwork between different working groups.
• 13. Focus on short-term products rather than longterm goals.
• 14. Insufficient resources and lack of continuous resource commitment
• 15. Launching accusations and reprimands creating lack of mutual trust and respect
among employees.
• 16. Lack of foresight common mission or guiding principles.
• 17. Lack of strategic direction and review priorities.
• 18. Existence of bureaucracy in the organization.
• 19. Administrative failure to recognize or reward goal achievement of the objective
(Chen et al., 2004; Stashevsky and Elizur, 2000).