Performance Management in Public Sector - Essay Example

? Performance Management in Public Sector Introduction Public management refers to those practices that that government and the non-profit administration should embrace just as it happens in the private sector for the enhancement and improvement of efficiency and effectiveness in utilizing public resources, in the public management, very critical decisions are made that directly affects the quality of life. It therefore calls for improvement in the management of the public resources in a way that is more accountable and transparent, the need to improve on the delivery of the services in terms of efficiency and reduced bureaucratic system to allow for the proper management. In pursuit for reforms in the management of the public sectors, there have been radical changes in the last two decades on how governments do their management; there has been outsourcing of those management practices and techniques from the private-for –profit sectors with the purpose of reforming the government (public) sector. Since then, several countries have adopted these practices; Australia, New Zealand, and UK are some of the countries that have adopted the practices in the public sector management (Aulich, Halligan and Nutley 2001, p.46). Even though the system is widely believed to be associated with the developed countries, in the recent decade, its application has been witnessed in a number of the transitional and developing economies. These contemporary techniques and practices sourced from the private sector to the public sector are referred to as New Public Management, NPM (Eliassen and Sitter 2008, p.58). Pressures for Change NPM adoption came with the rising pressure from other quarters; it is a change process that has been adopted because of agitation from several sectors and interested groups. Some of the reasons that led to the adoption of the new strategy of public management included; Fiscal and Economic Pressure on the Governments This problem was first witnessed in the developed countries before spreading to the developing countries of Africa and Asia, lately; it was also witnessed in the Asian tiger Economies. There were fiscal stress that was necessitated by enormous public sector deficit, spiraling indebtedness, and unfavorable balance of trade. This fiscal problem made it possible for the reconstruction of the public sector through rethinking, reshaping what the role of the government is, to counter the problems that were facing the public sector, drastic measure of privatization, contracting, and downsizing became the available options (Bovaird and Loffler 2009, p.37). There was also public outcry on the leathery and the bureaucratic nature of the old order, the increased criticism from the public on the ineffectiveness and inefficiencies associated with public delivery of services occasioned the need for change. The old order was criticized for its slow and unresponsiveness that is driven by the established rules rather than its performance. The international consultants on management ideas advised most of the government on the need to change the management of the public sector by integrating some of the management tools from the private sectors (Ferlie, Laurence and Christopher, 2005, p.84). Finally, for the transitional and developing countries, there change has been necessitated by the donor agencies; it has been one of the conditions for lending form the international financial institution like the World Bank and the IMF. Changes Noted in the Public Sector following NPM As stated above in introductory part there was need for more efficient and effective of the public sector resources, in this regard several tools used in the management have been used that are sourced from the private sector to improve the performance of the public sector organization following the failure of the traditional systems used. In effecting this, several changes have been seen from the traditional order of public sector management, these changes have been seen in almost every sector of the economy. Changes Removal of the Huge Bureaucratic Systems Bureaucracy is one of the recipes for inefficiency and ineffectiveness that had engulfed the performance of the public sectors, most of the governments had chains of bureaucratic system that had also grown lethargic. With the coming of the new system of management, bureaucracy was dispensed with and most of the operational arms of the ministries were hived-off to allow for efficiency. Dismantling of the bureaucratic system has been done in such a way that, there is a split between that operational government arm and the core strategic policy arm (Flynn 2007, p.31). Unlike the traditional linkage that existed between this arms, the new system requires that the split arms only relates to the parent ministry thorough contractual agreement based on arm length basis and not through the traditional hierarchy as witnessed in the old order. Replacement of the Traditional ‘Tall Hierarchies’ The old order system was associated with running series of hierarchies that were the precursor of inefficiency and ineffectiveness. The new system has replaced the old one by establishing a system that is flexible, flatter, and a more responsive system associated with specific processes like pavement of benefits and issuance of license. This is different from the traditional system that provided for the finance and personnel. Distinction between Funding, Purchasing, and Service Provision This is another notable change that has been realized with the adoption of the new system, for the promotion of accountability and transparency, the new system of public management provides that there should be a clear separation of the organizational and the financial components. In this new structure, there is the defining and payment of the public services from one arm of the government and the actual provision of the services from a different arm. This strategy provides for a system in which the government can be financier of a service and they have not to be the provider of the services as they can be contracted out to private sectors (Ferlie, Lynn and Pollitt 2005, p.57). It is beneficial that the system will reduce bureaucratic nature that may be associated with the same government tendering and taking up a provision of the services and paying themselves. There are chances that inefficiency will take precedent coupled with wastages that cannot be accounted for; there are also possibility of corruption and the provision of the service taking longer than expected (Hughes 2012, p.67). Devolving Budgets and Financial Control The NPM has brought about some new effective changes that relate to way of budgeting and controlling of the finances, unlike the traditional system, there has been devolved system of budgeting and controlling of the finances in a decentralized units. Through the new system, there is the creation of the budgets centers as well as the spending units, this delegation of the financial responsibility enables the managers have the opportunity of considering alternative means of providing the services (Halligan, Sandra and Chris 2001, p.93). The structure that was considered by the old order as rigid to allow for consideration of other methods, and did not create room for comparative analysis of the cost from various bidders leading to overspending since there was no choice made on competitive basis. This new method has also been coupled with what is referred to as capping budget for making them be transparent in accounting. Shift to Output Orientation The linkage that exist between the output control in the allocation of resources and performance measurement has been used in the application of performance agreement and performance related pays, this has also necessitated a shift from the input and process to that which considers output in control with accountability. The advantage of the system is that it makes the managers to keep focus on the performance target, indicators, and the objective of the output. Challenges in Measuring the Performance of Public Organizations With the new system of public sector management, it also becomes important that the performance of the public organization be measured for the performance. The measure for performance in the public sector aims at meeting the requirements for accountability that may emanate externally, and helps also in the establishment of benchmark for the organization through which they are determined to achieve (Siddiquee, 2000, p.49). There are mission and goals of the organization that has to be evaluated periodically preferably annually, and there is the sense of strong internal accountability that comes with performance measurement. The need for coming up with the NPM system was to improve performance of the public organizations, there is no better way of ascertaining the value of the new system other than measurement of the performance index. Following the need to measure the performance of the public organizations, there are challenges that are associated with the system that make the evaluation process not giving accurate results or that justifies the results realized however dwindling they could be (Pollitt 2003, p.23). In this reference, performance measurement can be said to be a deliberate design, implementation, and engagement of those quantifiable indicated for judging success (McCourt and Minogue 2001, p.39). After the measurement of the performance index, it would be possible to make conclusions vis a vis the initial performance of the organization by comparing the contribution of the two systems, the following are the challenges associated with measuring of the performance of a public sector organization. Nature of the Public Sector One of the most salient differences between the public and private sectors is that in the private organizations, the need to maximize the profit is given priority; this is not the case with the public organizations. Thus, it becomes difficult to measure the performance of the public sectors because there are no objectives, no benchmarks through which one can evaluate the performance of the organization. Being profit oriented dictates that there has to be some objective that are to be met, and in most cases, they tend to work towards the established and set benchmarks, which is not present in the public sector and makes evaluation and measurement of performance a challenging activity to undertake (Lynn 2006, p.44). Even though other scholars have insisted that performance of the public sector can still be measured even with the absence of the bottom line indicators, it remains inefficient compared to that of the private sector that have their entire objectives clearly stated to facilitate the process. Multiple Principles Public sectors are also known for their multiplicity of principles; this occurrence influences the optimal level of performance measurement. For instance, because of the several principles that have to be run, it becomes a problem in knowing a quantifying some of the main performance measure like customer satisfaction, and this has greatly affected the process of measuring performance of the public organization. Human Resource Weaknesses In the public sector, there is always the problem with the human resource, most of the competitive human resource is taken to the private sector where there is relatively higher pay than in the public sector, and this coupled with the fact that in the public sector objectives and goals are not set measurement of performance becomes complicated. Without a set objective that acts as the benchmark that companies should achieve, coupled with incompetent human resource, it is difficult to measure performance in such ways and this is the problem with most of the public organizations (Wanna, Butcher and Freyens 2011, p.67). Public organizations are similar to the nongovernmental organizations that are not profit oriented, in some instances, they are supposed to be providing services in time of emergencies, quantifying the performance in such a situation is a difficult exercise because the system in place is not aligned for measurement. Bureaucratic Nature of the Public Sectors In public organization, bureaucracy is rampant; there is also a widespread overlap of responsibilities form one department to the next, the flow of information is also complicated and there are many people involved in the execution of duties, this makes it very difficult to measure the performance of the public sector organizational because of their bureaucratic nature. In most cases when bureaucracy reigns, there is a possibility of not having a proper measurement of the performance because of the several stages that have to be considered for information and evaluation, in case of the responsibilities overlap it may equally be very difficult to find an effective approach of conducting the exercise of performance measuring. This helps in explaining one of the arguments and explanations why bureaucracy is suggested to be disregarded in the NPM (Toole and Kenneth 2010, p.58). Implication of the Challenges Facing Performance Measuring In Public Sectors Due to the above listed challenges, many negative impacts are occasioned, such as it is impossible to come up with a precise finding regarding the performance of the public sectors organization. This inaccurate information would mean that it cannot be sufficiently be used to make a reasonable decision with reference to the corrective measure that should be improved on, it also makes difficult in knowing the source of the problem since fault cannot be attributed to any area of management. When a system has defined goals and objective, it becomes easy to make its assessment and problems can easily be apportioned to areas where there are faults. Secondly, there is also a possibility that chances of improvement in the public sectors are minimal or if there is any then it cannot be noticed, and it therefore calls for the public sectors to organize themselves and assume the structure of private sectors (Pollitt and Geert 2013, p.67). The challenges to effective evaluation of the public sector organizations also creates the impression that still inefficiencies and ineffectiveness are happening when they are supposed to be corrected, this is why it is important the these organization adopts NPM and still ensure that they are improved to suit the organization’s needs. Conclusion After the modernization of the public sector performance, there has been consistent measurement of the performance against the indicators established as related to public sector management. Whereas the term performance assessment is not new to the public sector, performance measurement on the other hand has gone through considerable changes in the recent past to include the use of both financial and non-financial strategies. This came after the criticism of the traditional system that was blamed to have no business acumen, in the new public management, the measurement of the public service performance is directly linked to the financial rewards. Even though there are few challenges still in the management of the public sector, there is imminent room for improvement given that performance measurements that will be used as a guiding principle are known ultimately. With reference the New Public Management, it was important that the system of managing public services change for the betterment of the society. Public management is for the good of the people and should ensure that their lives are not only made better but should also ensure that such services are given to the public speedily and in the right proportion. Any wastage, inefficiencies, or ineffectiveness that comes with the delivery of the services should be reduced appropriately; this explains why the system of public management went through radical changes to eliminate such issues. With the appropriate human resource that are trained for the purpose expected by the new system, and those who are ethical, there is no doubt that ultimately, public sector will triumph in achieving good and efficient management of its services. References Aulich, C., Halligan, J. & Nutley, S. (eds.). 2001. Australian Handbook of Public Sector Management,Sydney: Allen & Unwin. Bovaird, T. and Loffler, E. 2009. Public Management and Governance, 2nd ed. London: Routledge,. Eliassen, K. A. and Sitter, N. 2007. Understanding Public Management, Sage Publications 2008 Flynn, N..Public Sector Management, London: Sage Publications Ferlie, Ewan, Laurence E. Lynn, and Christopher Pollitt. 2005. The Oxford handbook of public management. Oxford: Oxford University Press. Ferlie, E., Lynn, Jr. L.E. and Pollitt, C. 2005. The Oxford Handbook of Public Management, Oxford: Oxford University Press. Hughes, O. 2012. Public Management and Administration. Palgrave: Basingstoke Halligan, J., Sandra M. Nutley, and Chris, A. 2001. Australian handbook of public sector management. Crows Nest, N.S.W.: Allen & Unwin. Lynn, L. E. Jr. 2006. Public Management: Old and New, New York: Routledge. McCourt, W. & Minogue, M. (eds.). 2001. The Internationalization of Public Management, Edward Elgar: Cheltenham. Siddiquee, N. A. (ed). 2013. Public Management and Governance in Malaysia, New York: Routledge. Wanna, J., Butcher, J. & Freyens, B. 2010. Policy in Action, Sydney: UNSW Press. Pollitt, C. 2003. The Essential Public Manager, Buckingham: Open University Press. Toole, Laurence J., and Kenneth J. Meier. 2011. Public management: organizations, governance, and performance. Cambridge: Cambridge University Press. Pollitt, Christopher, and Geert Bouckaert. Public management reform a comparative analysis. Oxford: Oxford University Press, 2000.   Read More