Monitoring Performance in the Public Sector

Future Directions from International Experience

John Winston Mayne, John Winston Mayne, Eduardo Zapico-Goñi

• Publisher: Routledge
• Year: 2017
• Topic: Politics & International Relations
• eBook ISBN:
  9781351504843
• Subtopic: Bookkeeping & Budgets
• Index: Politics & International Relations

A host of promising public sector reform efforts are underway throughout the world. In governments challenged by budget deficits and declining public trust, these reform efforts seek to improve policy decisions and public management. Along the way, program efficiency and effectiveness help rebuild public confidence in government. Whether through regular measurement of program inputs, activities, and outcomes, or through episodic one-shot studies, performance monitoring plays a central role in the most important current reform efforts. Monitoring Performance in the Public Sector, now available in paperback, is based on experiences derived from comparative analysis in different countries. It explains why there is interest in perfor!mance monitoring in a given setting, why it has failed or created uncertainties, and identifies criteria for improving its design and use.One of the challenges this book offers is the need to consider dimensions of performance beyond the traditional ones of economy, efficiency, and effectiveness. With an increasingly diverse, interdependent, and uncertain public sector environment, for some stakeholders meeting objectives fixed some time ago may not be as important as the capacity to adapt to current and future change. In this vein, the contributors address a number of themes: the criti!cal importance of organizational support for performance monitoring and making it consistent with the organizational culture, the need for active and effective leadership in defining criteria and implementing practical performance monitoring, the value of linking ongoing measurement with more than the traditional, strictly quantitative aspects of public sector performance.As we gain experience with performance monitoring and its uses, such systems should become more cost effective over time. This book will be of deep interest to public managers, government officials, economists, and organization theorists, and useful in courses on p

Part II


Designing and Implementing
Effective Performance
Monitoring

2

Establishing Performance Monitoring:
The Role of the Central Unit

Terje Haugli Nilsen

Introduction

In this chapter,¹ we will highlight the role of the central unit in establishing performance monitoring. Our main hypothesis is that if the introduction of performance monitoring on a full-scale basis is to be successful, it must be backed by a competent and active central unit.

The introduction of performance monitoring has met with considerable value-based resistance in public administration. Performance monitoring implies accountability which many try to avoid and, perhaps more importantly, is perceived as being closely linked with market-and management-oriented values and solutions. Within the field of public administration research, the common argument is that market-oriented and management-oriented concepts make only very limited allowance for the diversity and special character of public administration activities (Christensen 1991a).

According to Professor Olsen at the University of Oslo, the management-oriented reforms of recent years have had certain positive effects but he suggests caution:

We have become increasingly aware of the fact that the public administration exists for the sake of the public, and more conscious of results and costs. This is a healthy situation—at least if we regard these tendencies as a trend rather than a desired future state of affairs. When performance management is focused, the argument often applied is that we should think not only of rules and regulations, but also of results. Only when these ideas penetrate our thinking completely in such a way that we abandon our old values, does it become a problem. (Olsen 1993b: 36)

Definitions

We are interpreting performance monitoring in the broad sense outlined by Mayne and Zapico-Goñi in chapter 1 to include both ongoing monitoring of performance and periodic evaluation studies. In this context, central units are defined as, “an organizational unit responsible for development of the government’s performance management policies, including performance monitoring.”

It is important to note that the central unit’s functions, as defined here, include policy formulation as well as policy implementation. Furthermore, the central unit is assumed to have general responsibility to develop and implement the government-wide performance monitoring policies. As a consequence, the central units are organized at ministerial headquarters and in units which have coordinating functions in the government administration as a whole.

Issues to Consider

The central unit normally has considerable influence on both the policy as well as implementation strategy. It will be of interest to take a closer look at:

• The substance of performance-monitoring policies in various countries: whether the government’s performance monitoring policy is based on experience and theory, or whether it is rhetorical in nature; whether the policy is integrated as part of a comprehensive administration policy; whether the policy takes into account the diversity and special character of public administration (Christensen 1991b, Lægreid 1991)
• Which actors are crucial in the development of administration policies; to what extent do politicians take part in policy development in this area; is this an area that politicians entrust to civil servants? (Brofoss 1991, Kleven 1993).

As to implementation strategy, the following will be of interest:

• To distinguish between full-scale implementation on the one hand and experimental implementation on the other;
• To differentiate between various means of implementation used by the central unit. A “soft” approach would use information and guidance, synthesizing and communicating experiences, include the results from experiments, throughout the service. On the other hand, performance monitoring may be enforced by means of rules and regulations which establish a duty for the whole or parts of the public administration to monitor their activities. The use of normative means may vary from general directions to more detailed requirements for systems and procedures; and
• The usefulness of performance monitoring may perhaps increase if it is combined with more in-depth evaluations because performance monitoring in many cases may be insufficient as a method to measure the effects of government programs.

The value of performance monitoring may be greatest at the agency level where it can be utilized in the day-to-day management process. It is of interest to take a closer look at the actual performance and orientation of the central unit and to find out whether or not there is a focus on the agency level. Previous research would suggest that performance monitoring is utilized primarily in agencies where the task structure is homogeneous and where output can be quantified (Christensen 1991b). Trosa in chapter 4 makes the same point. Agencies comprised of a number of homogeneous and comparable units, such as the Department of National Insurance and the Directorate of Labour in Norway, seem to be best suited to performance monitoring.

It may be that central directions concerning development of performance-monitoring systems do not make sufficient allowance for specific management needs at the agency level. This can strengthen resistance towards performance monitoring in cases where it is not in the self-interest of agencies to develop management systems along the lines established by the central unit. In this connection, it is of interest:

• To investigate whether the intention is to produce comprehensive and detailed measurements of results or whether the approach to performance monitoring is of a more strategic character with measurements focused on key data, important and highly prioritized areas, and which are related to the needs of key users of this type of information. Different users will often have different preferences as to the choice of performance indicators;
• To see whether the central unit prefers a confrontational strategy with substantial pressure from central authorities or an experimental approach where organizational learning is a key element of the improvement process. Is performance-monitoring policy based on a philosophy of organizational learning, the aim of which is to improve the particular agency, or is the policy based on a control philosophy, intended to disclose weaknesses and implement subsequent sanctions; and
• To ascertain whether the performance-monitoring policy takes sufficient account of costs and problems related to measurements.

Method of Analysis

To explore the role of the central unit and questions outlined above, we will use a comparative method. We will study the role of the central unit in three different countries, Canada, the United Kingdom, and Norway, and we will base our comparison on an analysis of documents as well as expert consultation.

The description of each country’s experience will be structured as follows:

• Section 1: A description of past performance-monitoring experiments.
• Section 2: A description of the country’s performance-monitoring policy. To what extent is the country’s approach to performance monitoring based on experience and theory? To what extent is the approach “imported” and how is performance monitoring backed up politically? How and to what extent can performance monitoring be seen as an integral part of a comprehensive administration policy? How is the relationship between performance monitoring and more in-depth evaluations managed?
• Section 3: A description of the central unit and its role. Here we will describe the central unit’s role in policy formulation and policy implementation. We will, among other things, discuss the central unit’s implementation strategy: its use of normative means, directions and guidelines established at the central level, information, and guidance.
• Section 4: A description of experiences with the use of performance monitoring. Has there been any evaluation undertaken of performance monitoring?

The Implementation of Performance Monitoring in Three Different Countries: Norway

Previous Performance-Monitoring Experiments

The term program budgeting was central to the development of the annual budgets in the 1960s and 1970s in Norway. In 1967, the government set up the Programme Budgeting Commission to investigate the possibilities for program budgeting in the central government. The findings of this body were published in 1972 (Norwegian Official Report). The commission felt that the budgetary system at that time did not provide sufficient information to enable prioritizing. Nor did the budget documents provide a satisfactory basis for assessing the effect of government measures. The commission produced a series of proposals for improving the government budgetary system, among which were:

• The development of a comprehensive program budget and accounts system. Together they would form a complete information and management system which would provide as accurate information as possible about the nature of specific tasks, the objectives of these tasks, and the effects of programs and measures implemented. The commission also proposed that information about the costs of specific measures be improved, in order to facilitate the feedback on effects of these measures.
• All government activities should be grouped according to objectives, starting with the main objectives which were called program areas. The commission proposed the introduction of several new formal management documents—problem notes, programs analysis, program notes, and program reports. Program reports were to contain information about beneficial effects and the utilization of resources. These documents were to be produced at all levels of the public administration.

In the government’s Report to the Storting nr. 57(1973-74), the ministry of finance assessed the proposals from the Programme Budgeting Commission and endorsed the suggestion that the budget system be improved. The ministry did not subscribe, however, to the development of a separate information and management system to include a program budget and accounts. The commission’s proposal to organize central government agencies according to objectives was not endorsed by the ministry. The ministry proposed, among other things, that the use of program notes on an institutional and ministerial level be extended, and that guidelines concerning the use of program analysis be developed and the long-term budgeting system be improved.

The ministry prepared the way for an experimental approach with trial activities which could form the basis for further development of the government budget system. In all essential areas, the Storting endorsed the guidance outlined in the ministry’s report.

A key element of program budgeting was the development of measuring systems which would provide better information about the efficiency of government measures. In this respect, however,— reflecting experience elsewhere—the budget reforms implemented in the 1970s were a failure. The positive effects of the program-budgeting approach of the 1970s can be said to be:

• a better division of the budget according to objectives and agencies;
• the production of guidelines for the use of program analysis;
• a slightly extended use of planning figures and unit costs in budget documents; and
• somewhat greater emphasis on describing budget priorities more clearly.

It is true to say that the proposal to introduce program budgeting as a separate information and management system has now been abandoned completely.

Norway ‘s Current Performance Monitoring Policy

Since the middle of the 1980s, efficiency improvement, improvement in the secretary functions for the political level, and user-orientation have been the public administration goals. Performance management, including performance monitoring, is one of the main tools utilized in this respect.

In 1986, the government budget system was reformed with a main goal to strengthen performance management. Government agencies were given greater freedom to use budget allocations. It became easier for them to reallocate funds between budget posts and to carry unused allocations over to the next year. As a counter-measure, agencies were required to a greater extent to define their objectives and to report to central authorities on the results they achieved. (Norwegian Official Report 1984; Finansdepartementet 1984 and 1985ab)

The development of public budget systems in Norway occurred in a climate characterized by unanimity, as borne out by the fact that the Storting unanimously endorsed all proposals in the government’s budget reform (Steine 1988). Similar developmental characteristics can be seen in the budget systems of all Nordic nations.

In 1987, the government presented a program of renewal for the public administration. In this program also, performance management is one of the chief instruments utilized. As part of its program of renewal, the government ordered all agencies to produce corporate plans. The government decided on a full-scale implementation, whereby each government agency was required to produce its first corporate plan by the end of 1990. The implementation strategy also had some experimental features since all ministries were requ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• Foreword
• I Performance Monitoring: An Overview
• II Designing and Implementing Effective Performance Monitoring
• III Comparing Performance Monitoring in Policy Areas
• Contributors
• Index