Effective performance management in the public sector

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The Workshop on Quality Management in Public Services will make the participants aware of key elements in quality management and will enable the participants to apply these approaches in their daily functions. The workshop will also encourage team work and peer learning across the public organisations in Croatia.

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Effective performance management in the public sector

  1. 1. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Zagreb (Croatia) 22 May 2014 Elke LÖFFLER & Gilles CHEVALIER, SIGMA EXPERTS Measuring and managing performance Objectives, performance indicators and targets
  2. 2. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Performance measurement: A definition Performance measurement is the process of collecting and analysing information regarding the performance of an individual, team, organisation or system to understand whether the results (outputs or outcomes) are in line with the stated objectives.
  3. 3. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Purposes of performance measurement  Control  Learning and continuous improvement  Public accountability  Decentralisation
  4. 4. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Some clichés about performance measurement If you cannot measure, you cannot control. If you cannot control, you cannot manage. If you cannot manage, you cannot deliver. What gets measured, gets done. If you don’t measure results, you can’t tell success from failure and therefore, you can’t reward success or avoid uninten- tionally rewarding failure.
  5. 5. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Performance measurement framework in short There are four main key steps in a performance measurement framework : • the strategic objectives of the organisation are translated into performance targets, • Performance indicators are developed to compare the desired performance with the actual achieved performance, • gaps are identified, • and improvement actions identified. These steps are continuously implemented and reviewed. Establish key goals Establish metrics Understand performance Initiate improvement
  6. 6. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Measuring public performance : an old history As soon as 1949 the 1st Hoover Commission in the US aimed at shifting the attention of the budget from inputs towards functions, activity, cost and accomplishments. This increased influence of civil servants cumulated in the development of planning and management approaches such as the Planning, Programming and Budgeting System (PPBS), management by objectives (MBO) and zero-based budgeting (ZBB). In the late 1980s and early 1990s there was a new emphasis on performance management mainly because of rising fiscal deficits in governments but often inspired by ideologies as keeping the state as small as possible. In this phase, the main objective was to identify how to increase efficiency and/or to cut spending. (Public Management and Governance. Tony Bovaird & Elke Löffler. Routledge. 2009)
  7. 7. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU The policy and management circle 1. Strategic objectives 2. Operational objectives 3. Input 4. Activities 5. Output 6. Intermediate outcome 7. End outcome Policy cycle Management cycle 8. Environment (Public Management and Governance. Tony Bovaird & Elke Löffler. Routledge. 2009)
  8. 8. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Policy cycle Management cycle In reality … linking the objectives to the results This clear-cut distinction between the policy and management cycles is valuable for analytical purposes but it does not exist in reality. In making decisions, managers need policy guidelines and political decisions on the allocation of resources, while policy makers in turn need information on the feasibility of outputs and expected outcomes. (Tony Bovaird & Elke Löffler Public Management and Governance.. Routledge. 2009) So, where and what to measure ?
  9. 9. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU 1. Strategic objectives 2. Operational objectives 3. Input 4. Activities 5. Output 6. Intermediate outcome 7. End outcome Policy cycle Management cycle 8. Societal environment What and where to measure ?
  10. 10. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Objectives, performance indicators and targets • Objectives General aspirations to be accomplished. • Performance Indicators (PIs) Variables which enable us to measure how close we have come to reaching our objectives. • Targets The desired amount of change, reflected by a number or percentage to be achieved within a specific period of time. Targets should be SMART !
  11. 11. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU What are SMART targets ? Specific Measurable Achievable Realistic Time Based
  12. 12. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Inputs Outputs Outcomes Economy Efficiency Effectiveness Value for money Types of performance indicators
  13. 13. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Inputs • Number of staff • Number of hospital beds • Number of participants in training course • … Outputs • Number of staff trained • Number of patients treated • Percentage of passed exams • … Outcomes • Number of participants who implemented new knowledge at work • Number of patients who were not readmitted to hospital • Percentage of students who found a job • … A typology of performance indicators
  14. 14. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU 1. Strategic objective: To make it easier for SMEs to set up a business in my country 2. Operational objective: To reduce the costs of setting up a business 3. Inputs 5. Outputs 6. Outcomes Management cycle One example: PIs for administrative simplification Inputs: Time required by business (measured by working hours) to fill in paperwork for setting up a business Outputs: Number of new SMEs registered within a year Outcomes: Employment created by new SMEs Economy: For businesses: Lowest possible time/cost needed for registration For public agency: Lowest possible cost of premises, equipment & staff of given quality Efficiency: Proportion of enquiries turned into registrations Effectiveness: Number of jobs created per firm registered
  15. 15. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU 90 days 75 days 60 days An example : A target for administrative simplification Use colours (traffic light system) ! Objective: To reduce the number of calendar days taken to register a business Performance indicator: Average number of calendar days taken to register a business Target: To reduce the number of days taken on average to register a business from 90 days to 60 days by 2017 The quantified level of a performance indicator to be achieved within a given time period
  16. 16. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Exercise: How do you try to achieve better service quality for business in your agency ? Break up into pairs for a short exercise ! Which of the following performance targets is SMART ? 1. To receive as few complaints as possible. 2. To achieve 100% customer satisfaction (measured in an bi- annual survey) by 2020. 3. To reduce staff turnover in central administration by 5% every year in the next three years.
  17. 17. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Exercise: How do you assess whether your organisation achieves key outcomes? Break up small groups for a short exercise ! 1. Each of you should define ONE key outcome of your organisation and then set several PIs and targets related to this outcome. 2. Ask your partner to do the SMART test and to check the quality of your targets. 3. Discuss with your partner whether your agency can “control” the achievement of this target or whether you need to work with other agencies to achieve it.

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