Impact of the New Performance Management in the Public Sector - Literature review Example

?Finance and Accounting Table of Contents Introduction 3 Performance measurement in the public sector 3 Examples of performance measurement in the public sector and the impact 5 Swedish Public Sector 5 Swedish Armed forces 7 Development of Greek System 7 Reference List 9 Introduction The literature review elaborates the fact behind the regimes of performance measurement in public sector. Arguments are made to see whether the performance measurement is fit for the public sector. The review discusses about the likely results that are obtained from the usage of the performance measurement rules in the public sector. The outcome has found to be the modification of the services that are delivered by the unprofessional workforce of the public sector. The reasons behind the outcomes are series of managerial and technical issues which are linked with the public sector performance measurement that make the management system unfit for the operation. Another reason is the challenges that the public sectors face when they import management practices from the private sector which is more disciplined and planned. The review thus explains a set of arguments in an organized manner. The first portion of the review elaborates the framework of New Public Management (NPM) and argues regarding the increasing need of the performance measurement in the various elements of public sector both internationally and nationally. The next section elaborates few examples of performance measurement. After this two sections review discusses few important weaknesses of such rules. It also explains in an argument that the weakness has resulted in systemic problems which have not supported the rules to deliver their actual benefit in terms of improvement of services of the public sector. The review ends with other probable results of the performance measurement (Adcroft and Willis, 2005). Performance measurement in the public sector There is no strict definition of New Public Management (NPM) which is accepted by all universally. Hood (1991, cited in Adcroft and Willis, 2005) has identified that NPM includes numerous principles devised by blending and mixing elements in accordance with the circumstances of the public sector. The principles have given emphasis on the professional management, the results and outputs of the management are focused and the “role played by the private sector styles” (Adcroft and Willis, 2005) are elaborated in details. Pollitt (2003, cited in Adcroft and Willis, 2005) has provided the explanation about these principles as to how they have brought changes in the public sector and also drew attention to privatization. The result of these principles has created a new set of rules for the public sectors which are basically governed by the managers and administrators at higher levels. The NPM themes of the public sector include the theory and practice of importing practices to the public sectors from outside. This import takes two forms which are to be considered separately so that there is no significant overlapping. The first form is international where public sector of one country import practices from the public sector of another country. Thus it is described as the development of an international agenda for the management of the public sector. Researchers like Walshe (2001, cited in Adcroft and Willis, 2005) have pointed out that UK has adapted the learning approach from USA about the healthcare management and has proposed that the adaption is possible because there are similarities in the challenges that both the country’s healthcare professionals are facing. The problems he indentified to be the rising cost, growth in public expectations and change in technology. Ferlie and Steane (2002, cited in Catasus and Gronlund, 2005) have suggested that the common set of characteristics of the public sectors have become a benchmark of standards for all the countries worldwide. But Walse (2001, cited in Catasus and Gronlund, 2005) has criticized the thought of Ferlie and Steane (2002, cited in Catasus and Gronlund, 2005) and have pointed out that adaptations can be critical and if a country embraces it without giving a second thought then the country can face problem. The second form includes the importation of the management practices from the private sector. McNulty and Ferlie (2002, cited in Ballas and Tsoukas, 2004) have identified that National Health Services (NHS) have adapted business process re-engineering (BPR) but it is unknown that to what extent these private sector management has been successful in managing the operation of NHS. Ferlie and Steane (2002, cited in Ballas and Tsoukas, 2004) have disagreed that the adaptation of the private sector practices have too many intents and that has vague difference between the public and private sector where the role of government is of a facilitator of the services in comparison with provider of frontline services. Examples of performance measurement in the public sector and the impact Swedish Public Sector The Swedish public sector is scaling down significantly and is becoming more like the European nations. The sate of welfare is being replaced by the new forms of organization. New ideologies are developing which are given emphasis due to the processes, managerial accountability and probity. The new movement for the public management readdresses interest towards the private sector. The private sector includes the concepts of efficiency, decentralizing, downsizing and search for excellence (Catasus and Gronlund, 2005). The private sector practices are undertaken to organize for better performance of the public sector. Ittner and Larcker (1998, cited in Ballas and Tsoukas, 2004) noted that the efforts to restate the government have emphasized on the most important role of the measurement systems that are played by improving the effectiveness and the efficiency of the government operations. The main problem in measuring performance of the organizations is complexity. Organizations are said to be complex as they are the collections of invisible and visible, intangible and tangible elements. The performance of the organization is obtained from the mass of various external and internal conditions and factors. It is suggested that the broad approach of the public sector has its problem centered as deconstruction. The organizations are wrecked into discreet elements of assessment such as functions, services or departments which are deconstructed to smaller elements of the output when needed. The elements are subjected to thorough process of performance measurement so that comparisons are obtained across the different functional areas, monitoring the use of the resources and sharing of the best practice. Kirkpatrick and Ackroyd (2003, cited in Ballas and Tsoukas, 2004) argued the fact that the methods that are prevalent in the social service department is projected at providing “mechanisms for ensuring control and accountability” (Adcroft and Willis, 2005). It highlights the importance of the business disciplines and the performance indicators under the NPM rules. He has also described the proposed changes that are undertaken to the management systems for the ‘in the fire’ service offices. He discusses that there is an introduction to the performance targets in the fire services and the higher authorities are compelled to use the performance measurements and the management systems for evaluating the worker performance. Wanless (2000, cited in Ballas and Tsoukas, 2004) has argued on the fact that UK should devote a considerably large share of national income to the healthcare departments for the next 20 years. If this happens then UK can follow the standards of the healthcare that are offered by the other countries of Europe. Thus the main aim is to reach “European average of 9.4 per cent of GDP” (Ballas and Tsoukas, 2004) that will be spent on healthcare by 2014. It involves the annual increases of health spending for about 7.5 per cent. In long run, the government plans are made to increase the spending over next 20 years from 4.2% to 5.1 % annually. Swedish Armed forces The NPM movement is less influential in Sweden than in Australia New Zealand. Despite the adaptation of the private practices in the public organizations like municipalities, governmental organization and public health-care organizations there has been no significant improvement in the sectors. The armed forces of the public sector is not studied which might be due to the secrecy that is maintained in the organizations of armed forces. One part of the public sphere has, however, been left unstudied, namely the armed forces (Ballas and Tsoukas, 2004). The study of this sector reveals the use of the advanced accounting methods and metrics. But this information is under strict concealment. The study throws light on the management control changes which are carried out with high level of secrecy, hierarchy and discipline. It is really hard to find a sector with such tight monopoly and secrecy. But little can be known about these sector and the changing management controls as the studies are rare and the information regarding these sectors are lacking. Development of Greek System Greek system is highly politicized so the objectivity and the technical analysis of accounting induced in the system are rhetorically accepted but they are not the powerful sources for the political legality. The kinds of abstraction, objectivity and standardization will provide unfavorable consequences to the political system prevailing. Bureaucratic political popularism has been the main features of Greek political system that thrives in the situations of social relations. The political culture indicates the institutional behaviors as the idiosyncratic which is subject to the particularistic evaluation standards. Conclusion It can be concluded that the NPM has been successful in some countries while it did not perform well in countries like Australia and New Zealand. The main arguments made by the researchers are that NPM has failed to bring improvement in the public sector due to its undisciplined work and continuous neglect by the workers. Few researchers have pointed out that the workers are being forced to adapt the new practices but it did not work well. Reference List Adcroft, A., and Willis, R. 2005. The (un)intended outcome of public sector performance measurement. International Journal of Public Sector Management, 18 (5): 386 – 400. Ballas, A., and Tsoukas, H. 2004. Measuring nothing: The case of the Greek National Health System. Human Relations, 57 (6), 661–690. Catasus, B., and Gronlund, A. 2005. More peace for less money: Measurement and accountability in the Swedish Armed Forces. Financial Accountability & Management, 21 (4):467-484. Ferlie, E. and Steane, P., 2002. Changing developments in NPM. International Journal of Public Administration, 25(12), pp. 1459-1469. Hood, C., 1991. A public management for all season. Public Administration, 69, pp. 3-19. Ittner, C.D. and Larcker, D.F., 1998. Innovations in performance measurement: Trends and research implications. Journal of Management Accounting Research, 10, pp. 205–38. Kirkpatrick, I. and Ackroyd, S., 2003.Transforming the professional archetype: The new managerialism in UK social services. Public Management Review, 5(4), pp. 511-31. McNulty, T. and Ferlie, E., 2002. Re-engineering health care: The complexities of organizational transformation. Oxford: Oxford University Press. Pollitt, C, 2003. The essential public manager. London: McGraw-Hill International. Walshe, K., 2001. Don’t try this at home: Health policy lessons for the NHS from the United States. London: Institute of Economic Affairs. Wanless, D., 2000. Securing Our Future Health: Taking a Long-Term View. London: HMSO. Read More