It is expected governments will deliver on their promises, both to fulfil their democratic responsibilities and provide satisfactory services to the public. Using formal performance measurement systems is one way of achieving this aim and holding governments to account.
A paper in the Australian Journal of Public Administration assesses whether performance measurement improves performance by reviewing performance measurement systems across three Australian jurisdictions.
Existing evidence for public sector performance information leading to better performance is scarce. Where there is evidence, it seems to indicate that performance reforms do not work well. A review of Aotearoa-New Zealand government performance indicators over a 10-year period showed that the indicators had almost nothing to say about the cost-effectiveness of policy programs. Other research found that performance management had effectively no influence in public institutions, possibly due to lack of goal clarity and managerial authority in the public sector.
There are two broad mechanisms by which performance measurement might enhance performance:
For example, the management by objectives model predicts that performance information will improve performance on the premise that what gets measured gets managed.
The research focused on answering the question:
This involved looking at whether:
The research used a case study approach and examined the nine organisations from three jurisdictions in the areas of policy, service delivery and regulation.
Performance measures, targets, and results were extracted from budget papers and annual reports spanning seven years. These were tabulated and analysed. The quantitative analysis was supplemented with:
The research found there is little-to-no impact of performance measurement on improved performance. The study then considered potential influences on the quality and use of performance measurement. The impact of these influences is difficult to disentangle, but can be simplified by using the concept of boundaries between sub-systems.
These sub-systems were divided into three categories:
1. Influences internal to the performance measurement sub-system
2. Influences outside the performance measurement sub-system but within the organisation
3. Influences outside the organisation
Systems theory would suggest that the higher-level influences - from outside the organisation are likely to have more impact than the internal influences. For example, although adequate resourcing is necessary, resources will be found if there are sufficient external incentives. It is the existence of external incentives that is the driving factor.
This proposition was tested as far as possible but not all these influences were readily observable from the case studies. There was no evidence for any significant influence with two exceptions:
The paper concludes that the failure to find evidence that performance measurement improves performance supports the view that performance measurement does not lead to improvement. One implication for practitioners and managers is because a performance measurement system is in place, it is not necessarily going to be effective in improving performance.
The research also found most organisational forces are directed to avoidance of performance measurement. There is only one countervailing influence that is potentially effective:
However, the internal use of performance information for improvement may be effective when organisations have a culture that supports quantitative thinking.
Does performance measurement improve public sector performance? A case of Australian government agencies - Graham Smith, John Halligan & Monir Mir, Australian Journal of Public Administration, April 2021
The original article is available via individual subscription to the journal or institutional access through a library service such as a university library, state library or government library.
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