Performance Management and AHP in the Public Sector

Planning and Using Performance Management in the Public Sector

In recent decades, the issue of performance has featured prominently in public management (Moynihan 2008). Behn (2003) discussed several goals that may guide managers in integrating performance measures into their organization, including controlling, learning, improving, celebrating success, and sanctioning. Due to the complexity of public services, public organizations are often flooded with all sorts of performance measures and reporting techniques (Hood 2006). Radnor and Barnes (2007) suggested differentiating between three activities related to the concept of performance: measurement, reporting, and management. Performance measurement is the valuation of the quantity or quality of the input, output, outcome, or level of activity of an event or process. Performance reporting requires an account, and often some analysis, of the level of input, activity, output, or outcome of an event or process, usually against some target. Performance management refers to actions based on performance measures and reporting aimed at improvements in behavior, motivation, and processes, and promotes innovation.

Despite these three areas, many studies demonstrate that public organizations tend to focus on the stage of measurement, paying less attention to the stage of reporting, and usually marginalizing the last stage of management (Hood 2006; Moynihan 2008, 2009; Pollitt 2006; Radnor 2008). In other words, the performance information accumulated in the first phase is often not used in the next stages for improvement and learning, leaving performance management systems open to significant criticism. The framework detailed in this chapter addresses this problem by creating conditions that favor organizational learning and the transformation of the organizational culture.

There are various factors - structural, political, and individual - that may explain the extent to which managers use performance information (Ammons and Rivenbark 2008; Moynihan 2008; Moynihan and Lavertu

2011; Moynihan and Pandey 2010; Moynihan et al. 2011a). One major factor that dampens managers’ motivations for using performance information is the dysfunction of performance information systems and the resulting gaming behavior. These conditions diminish the reliability and availability of performance information to the degree that using it often becomes irrelevant. However, there is no doubt that the link between goal setting, performance measurement, and budget allocation significantly limits the effectiveness of anti-gaming strategies (Bevan and Hood 2006; Dull 2006). This review underscores the fact that performance management strategies have a strong effect on organizational and governance cultures.

Furthermore, Eremin et al. (2010) demonstrated the existence of a systemic bias based on an individual’s position in the hierarchy. This bias is a challenge for those who design, implement, and use performance evaluations to support their performance management systems and for the overall organizational performance. Caillier (2010) too showed that role ambiguity negatively affects employees’ job performance and that job performance is better when employees believe in the mission, goals, and the good will of the management. Indeed, in this chapter we argue that a diffused mechanism in which all levels of the organization are integrated into the process of setting goals and performance measures can help marginalize gaming strategies. This framework is based on the application of the AHP methodology where workers are treated as role experts.

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