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“The Role of Leadership in Performance Management” - La

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“The Role of Leadership in Performance Management” - La Powered By Docstoc
					THE ROLE OF LEADERSHIP IN
PERFORMANCE MANAGEMENT

Donald P. Moynihan,
La Follette School of Public Affairs,
University of Wisconsin-Madison
Presentation to Chicago Federal Leadership Forum
Have you encountered?
   Strategic planning
   Performance measures
   Performance contracts
   Pay for performance
The role of leadership
•   During my 20 years in the private sector as a CEO and
    advisor to CEOs, I found that leadership, measurement,
    and a motivated workforce create the foundation for
    good performance. I am confident that the same is true in
    government
                     Jeff Zients – Chief Performance Officer, 2009
Outline
   Defining terms
   Era of governance by performance management
   From Bush to Obama
   How do we use performance systems?
   What fosters use of performance data?
   Summary points
Defining terms
Performance management
   A system that generates performance information
    through strategic planning and performance
    measurement routines, and connects this information
    to decision venues,
Performance regimes
   Performance tools create unprecedented pressure
    on public actors to perform, in a context where
    performance is defined by quantitative indicators
Purposes of Performance Information

   Promote: How can I convince political actors,
    stakeholders and the public that my agency is doing
    a good job?
   Celebrate: What accomplishments are worthy of the
    important ritual of celebrating success?
   Learn: What is what working or not working?
   Improve: What exactly should who do differently to
    improve performance?
Purposes of Performance Information

   Evaluate: how well is my agency performing?
   Control: how can I ensure that my subordinates are
    doing the right thing?
   Budget: on what program’s, people, or projects
    should my agency spend the public’s money?
   Motivate: how can I motivate employees and
    collaborators to improve performance?
ERA of governance by performance
management
Era of Governance
by Performance Management
   The rise of a doctrine
   Not new, but more influential than before
   Must justify actions in terms of outputs and outcomes
   Basis for holding new structural forms accountable
Doctrinal logic for change
Government Performance
and Results Act 1993
   Mandated:
     5 year strategic plans, updated every 3 years
     Specific goals and objectives

     Annual performance reviews and plans
From Bush to Obama
Bush approach
   Presidents Management Agenda
    “everyone agrees that scarce federal resources
    should be allocated to programs that deliver
    results”
   Wanted to integrate performance data into budget
    process
Congressional Justifications
   Center around performance goals
   Pushback from Appropriations Committees
       Veteran’s Administration told; “to refrain from
        incorporating ‘performance-based’ budget documents”;
        later told: “If the Department wishes to continue the
        wasteful practice of submitting a budget structure that
        will not serve the needs of the Congress, the Congress
        has little choice but to reject that structure and continue
        providing appropriations that serve its purposes.”
   Two budgets required
Congressional Justifications

   Department of Transportation told: “agencies are directed to
    refrain from including substantial amounts of performance
    data within the budget justifications themselves, and to instead
    revert to the traditional funding information previously
    provided. Performance-related information may be submitted
    under separate cover.”
   Negative consequences were promised for agencies that
    ignored this directive: “If the Office of Management and
    Budget or individual agencies do not heed the Committee’s
    direction, the Committee will assume that individual budget
    offices have excess resources that can be applied to other,
    more critical missions.”
Program Assessment Rating Tool (PART)

   5 year summary by OMB of evidence on program
    performance for 1016 programs
     18 percent are Effective
     31 percent are Moderately Effective

     29 percent are Adequate

     3 percent are Ineffective

     19 percent are Results Not Demonstrated
PART as Evidence-based Dialogue
   Third-party program review with a clear opinion
   Greater emphasis on performance
   The standard of proof for program performance can only
    be satisfied by positive evidence of results
   The burden of proof for performance rests on agencies
   Entire programs are evaluated on a regular basis
   The routine nature of PART creates an incentive to engage
Obama: A Pragmatic approach
   “The question we ask today is not whether our
    government is too big or too small, but whether it works
    -- whether it helps families find jobs at a decent wage,
    care they can afford, a retirement that is dignified.
    Where the answer is yes, we intend to move forward.
    Where the answer is no, programs will end. And those
    of us who manage the public's dollars will be held to
    account, to spend wisely, reform bad habits, and do our
    business in the light of day, because only then can we
    restore the vital trust between a people and their
    government”
Example: Pedometer challenge!


   Voluntary
   Belief that transparent performance numbers will
    change behavior, create a sense of competition and
    raise performance
Early evidence on Obama

   Performance measurement will be important
     “The President is creating a focused team within the
      White House that will work with agency leaders and the
      OMB to improve the results and outcomes for Federal
      Government programs while eliminating waste and
      inefficiency”
     Chief performance officer

     Continue to maintain agency level performance
      positions
What happens to PART?
   Not clear
   Criticized as ideological, as too broad, as a data
    collection exercise
   Analysis remains in place, but new PARTs have not
    started
   OMB have offered agencies funds for better
    evaluations
New emphasis on leadership
   Focusing leaders on what matters – key goals
   Accelerating results – Performance Improvement
    Council; data driven meetings
   Style: focused collaboration
New focus on information use
   Will be a central aspect of the Obama
    administration’s performance initiatives
   Jeff Zients: “The ultimate test of our performance
    management efforts is whether or not the
    information is used”
   Shelly Metzenbaum: “the key performance
    management challenge facing the Obama
    administration is to use—not just produce—
    performance goals and measures”
How do we use performance
systems?
Why care about use?

   For reforms to succeed, implies that data is used
   Provides a tractable means of studying the impact of
    results-based reform
   Public organizations have devoted significant time
    and resources into creating routines to collect and
    disseminate data
   Almost no attention to creating routines of use
   How do you use performance data?
Types of responses: 4 Ps
   Passive
   Perverse
   Political
   Purposeful
Passive use of data
   Passive:
     Do the minimum to comply with requirements
     Do not actually use data

     Correlated with cynicism about reforms
Perverse use of data
   Effort Substitution: Reducing effort on non-measured
    dimensions
   Cherry picking/Cream-skimming: Focusing effort on
    subgroups of clients most likely to provide greatest
    impact on performance measures while effectively
    denying services to others.
   Measure selection: Selecting metrics or data to measure
    that will offer the most favorable portrayal of a service
   Hiding numbers: Declining to present performance
    measures that may exist
Perverse use of data
   Output distortion: Manipulating measurement
    processes to improve measured performance.
   Ratchet effects: Curbing productivity in one time
    period to avoid the setting of more challenging
    targets in another.
   Churning: Frequently adopting different targets or
    measures to prevent comparison across time.
   Cheating: Simply making up numbers, though rare,
    does occur.
Responding to perversity
   Add new/additional measures

   Change existing measures

   Rely/cultivate intrinsic norms to limit misbehavior

   Avoid high-powered incentives
Political uses of data
   Process of selecting measures means shaping a
    program narrative
   “Understand that measuring policy is not a science.
    It is an art. It is words, and pictures and numbers.
    And you create impressions, beliefs, understandings
    and persuasions.”
Political uses of data
   Data tells us what happened
   Program officials still need to interpret and explain:
     why performance did or did not occur;
     the context of performance;
     how implementation occurred;
     an understanding of outside influences on performance; and
     how to choose which program measure is a priority.

   Exploit ambiguity and subjectivity of data
Political: Ambiguity of data

   Examine same programs, but disagree on data
   Agree on data, but disagree on meaning
   Agree on meaning, but not on next action
    steps/resources
Political: Subjectivity of data
   Actors will select and interpret performance
    information consistent with institutional values and
    purposes
Evidence of Ambiguity in PART
   Ambiguity of terms:
       E.g.: Program purpose, quality evaluation, ambitious, having made
        progress

   How to interpret results? Multiple logics from experiment:
       Argue that ratings are unreliable
       Cut poorly managed programs
       Raise funding for programs with positive assessments
       Parity: Raise funding because program with similiar assessment received
        more
       Delay cuts because progress being made
       Clear relationship between resources, need and program delivery
       Stakeholder and congressional views
Evidence of Subjectivity with PART
   OMB using PART to expand influence in
    performance management/policy
       OMB can define programs, goals, measures, agency
        responsibility
   Disagreement with agencies/Congress on
    meaning/relevance of PART
   Experimental evidence:
       UW students significantly more likely to disagree with
        OMB, and to argue for higher assessments and
        resources
Implications for Decisionmaking
   Performance information use reflects political
    process, does not replace it
   Performance information use does not lead to
    clarity
   Ability to structure dialogue tied to power
Purposeful use of data
   Use data to improve program performance
   Goal-based learning
     efficiency improvements
     better targeting of resources

     more informed strategic decisions,

     tying indicators to rewards/sanctions in contract
      arrangements
Purposeful use of data
   Use of performance information for problem-solving
    more likely to occur in intra-institutional settings
       Reduces competing interpretations
   Problem of neglect
       rarely do anything with information
Learning forums
   Routines specifically focused on solution-seeking,
    where actors collectively examine information,
    consider its significance and decide how it will
    affect future action

   What measures are useful for agency officials?

   What other ways can we encourage learning
    forums?
What fosters performance
information use?
The Right Context

   Simple function that is easy to measure
   Clear link between measures of actions, and
    measures of outcomes
   One-dimensional – relatively few measures that do
    not conflict with one another
   Stakeholder support – clear agreement about
    purpose
Other factors
   Learning forums
   Mission-based culture/supportive culture
   Resources
   Administrative stability
   Administrative capacity
Quantitative approach
   3 studies using survey-based data
   Self-reported performance information use
   Results from Moynihan and Pandey (in press) and
    Moynihan, Wright and Pandey (2009; 2010)
Study 1: Ordinal regression of reported performance information use for decisions

Variable                                                   Hypothesized              Result
                                                           direction
Individual beliefs
Public service motivation                                  Positive                  ***

Job attributes
Reward expectation                                         Positive                  --
Generalist leader                                          Negative                  ***
Task-specific experience                                   Positive                  --

Organizational factors
Information availability                                   Positive                  ***
Developmental culture                                      Positive                  ***
Flexibility                                                Positive                  *
Budget staff take adversarial role                         Positive/negative         --

External factors
Citizen participation                                      Positive/negative         +
Professional influence                                     Positive                  +
*** = significant at .001; ** = .01; * = .05 +=.10 (two tailed tests)
Controls: region, income per capita, government size, population size, population homogeniety
Intrinsic vs. extrinsic motivation
   Sense of public service motivation mattered
   Possibility of extrinsic reward did not create
    an incentive to use data
   Implication: performance information use as
    extra role behavior
Organizational factors
   Information availability
     Supply-side approach
     Use increases with better information, and when
      information is tied to management systems
Organizational factors
   Demand side approach
       Culture matters
         Previous work focuses on whether culture welcomed
          performance management reforms
         What about broader measures of culture?
         Developmental culture (adaptability, readiness, growth)

       Flexibility – unlikely to use data if cannot apply insights
Specialist vs. generalist leaders
   Task-specific knowledge provides context in which
    to interpret and apply data
   Leadership role
       Task-specific leaders more likely to use data than
        generalist leaders
Other evidence of leadership

 Support/commitment
 Provision of resources

 Participation



   What other ways can leadership matter?
Study 2: Transformational leadership

   Approach to leadership consistent with
    performance:
     Articulate an appealing vision of the organization’s
      mission and future
     Model behavior consistent with vision, inspiring role
      model
     Challenge old assumptions
Propositions
   Transformational leadership behaviors will have an
    indirect, positive effect on performance information
    use through its influence on goal clarity
   Transformational leadership behaviors will have an
    indirect, positive effect on performance information
    use through its influence on organizational culture.
Key measures
   Transformational leadership
     Asked department heads/assistant city managers on extent
      to which city manager demonstrates transformational
      leadership:
     articulates his/her vision of the future.
     leads by setting a good example
     challenges me to think about old problems in new ways
     says things that make employees proud to be part of the
      organization.
     as a clear sense of where our organization should be in five
      years.
    • Aggregated responses by organization
Structural Equation Model
Implications
   Leadership and management
   Indirect effects are important
   “Setting the table” as long-term leadership strategy
Study 3: Perceived social impact
   Individuals who see their work as helping others
    more likely to use performance information
   Some evidence that individuals who perceive
    greater social impact are more motivated
   Why should it relate to performance information
    use?
Key measures
   Perceived social impact
     I feel that my work makes a positive difference in other
      people’s lives.
     I am very aware of the ways in which my work is
      benefiting others.
     I am very conscious of the positive impact my work has
      on others.
     I have a positive impact on others in my work on a
      regular basis
Purposeful and political use
  Purposeful
 I regularly use performance information to make decisions.

 I use performance information to think of new approaches for doing old
    things.
 I use performance information to set priorities.

 I use performance information to identify problems that need attention.

 
Political
 I use performance information to communicate program successes to
    stakeholders.
 I use performance information to advocate for resources to support
    program needs.
 I use performance information to explain the value of the program to the
    public.
  Table 2: OLS Regression of Performance Information Use

  Independent variables                        Purposeful Use     Political


Perceived social impact                     .43 (.12)***        .52 (.11)***

Goal clarity                                .19 (.10)*          .25 (.09)**

Centralization                              .05 (.07)           .10 (.08)

Political support                           .14 (.07)*          .06 (.07)

Red tape                                    .04 (.03)           .02 (.02)

Years in position                           .01 (.007)          .006 (.008)

Supervisory level                           .03 (.05)           .02 (.04)

Educational level                           .05 (.07)           .09 (.06)

Sector                                      -.06 (.15)          .08 (.14)

*** = .001;**= .01; *=.05 one-tailed test   N=184; R2= .25      N= 186; R2= .31
Study 4: Experimental approach
   How does performance information matter to
    decisions?
   How does the framing of performance information
    affect decisions?
   Respondents given surveys with scenario – make
    budget recommendations
   Series of vignettes for different programs
   Half vignettes are control, half are treatment
Theoretical background
   Research on decision frames from psychology and
    behavioral economics
   Performance information is strategically selected
    and presented – does this work?
    Does the Addition of Performance Data Matter?


   Control: no data; treatment: addition of data without
    clear correlation to resources

   The Department of Land and Water Resources is responsible for monitoring
    and maintaining the water quality of lakes in the county, including two major
    lakes that are popular for swimming and other water sports during the
    summer. Estimates of water quality are based on pH levels, pesticides,
    nitrates and other chemicals in the water.
                                                  2007      2008      2009

    Program funding                               174,000   179,000   182,000

    Number of days water quality of major lakes   12        14        11
    deemed unsafe
    Does the Addition of Performance Data Matter?


   Control: no data; treatment: addition of data with
    clear relationship to resources

   The Department of Social Services delivers a program called the Home
    Downpayment Initiative. Using a mix of federal, state, and local resources,
    the program seeks to increase the homeownership rates among low-income
    and minority initiatives. To do so, it provides financial assistance to first-
    time homebuyers for downpayment and closing costs.

                                             2007       2008        2009

    Home Downpayment funding                 723,000    747,000     769,000

    Number of families purchasing homes      36         38          46
Is outcome data more powerful than output?

   Control: output data; treatment: outcome data
   The Department of Health Services offers a program called Health Check,
    which is a preventive health check-up program made available for anyone
    under the age of 21 who is currently enrolled in Medicaid. Health Check
    provides a head-to-toe medical exam, immunizations, eye exam, lab tests,
    growth and development check, hearing check, nutrition check, and teen
    pregnancy services. The goal of the program is to prevent the incidence of
    more serious and more expensive health situations.
                                           2007      2008      2009
Health Check funding                       232,000   244,000   269,000
Clients treated                            1232      1401      1325


Estimated savings due to preventive care   383,000   402,000   389,000
Threshold effects
   Treatment: performance data pass a memorable threshold
    (200)
    The County Tourism Board seeks to increase visits from those who live outside
    the county, and to increase the use of recreational and cultural opportunities
    by both locals and outsiders. It collects data from local hotels, restaurants,
    and other businesses that depend on tourists. In the last number of years,
    the number of tourists visiting the county has stayed relatively flat at about
    100,000, and the Board has focused its marketing budget on “quality, not
    quantity,” by increasing the dollar amount that each tourist spends.
                                                    2007        2008        2009
    Program budget                                    120,898     124,490     131,289
    Average daily dollar amount spent by tourists         178         184         195

                                                    2007       2008       2009
    Program budget                                     124,294    127,196    135,329
    Average daily dollar amount spent by tourists          183        188        201
Including equity measures
   Treatment: addition of equity measure that aligns with mission
   The Department of Social Services funds the Early Intervention Program, which
    provides services for children three and under with developmental delays and
    disabilities. The mission statement for the Early Intervention Program is: “Our
    mission is to provide access to therapies that improve child developmental
    outcomes.” The program is administered by a non-profit, and employs
    therapists to work with children and families in the home environment.


                                         2007             2008             2009
Program budget
                                                329,677          333,451          341,386
Number of hours of contact per year
                                                  8901             8977             9011
Number of children served
                                                   212              233              221
Percent of eligible children below the
poverty line that access services                  42%              47%              51%
Summary points: what to do
   Move beyond passive and limit perverse use
   Focus on political use
     What is the narrative of your program?
     What goals are meaningful and telling? How do they
      relate to the narrative?
     What goals are essential to explaining program
      purpose and achievement?
     How do you frame and communicate measures? Who
      is your audience?
Summary points: what to do
   Focus on purposeful use
     Provide resources, be involved, make clear that it is
      important
     Encourage right context for use
         Foster goal clarity
         Encourage supportive culture

     Create and support learning forums
     Appeal to intrinsic motivation
           Focus on demonstrating significance of measures
Questions/Comments

   dmoynihan@lafollette.wisc.edu

   http://www.lafollette.wisc.edu/facultystaff/moynihan-
    donald.html

   The Dynamics of Performance Management
       Georgetown University Press

				
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