Prof. Datuk Dr. John Antony Xavier Graduate School of Management Universiti Putra Malaysia 10 th May 2012

1. Performance Management in the Malaysian Public Service: Wallowing in the Core or Tinkering at the Frontier? Prof. Datuk Dr. John Antony Xavier Graduate School of Management Universiti Putra Malaysia 10th May 2012

2. Outline • Evolution of performance management • Who drives performance management? • Issues in performance management • How we solve them • Lessons from the Malaysian experience Prof. Datuk Dr. John Xavier

3. Malaysian Public Service HRMStrategic Agenda SETTING STRATEGIC DIRECTION SHAPING A HIGH PERFORMANCE- WORK CULTURE ENSURING ORGANISATIONAL CAPACITY A HIGH PERFORMANCE PUBLIC SERVICE MANAGING PERFORMANCE, RECOGNITION AND REWARDS IMPLEMENTING QUALITY STAFFING BUILDING WORKFORCE COMPETENCY Prof. Datuk Dr. John Xavier

4. Malaysia has come a long wayin performance management Prof. Datuk Dr. John Xavier

5. Who drives these reforms? • Bulk of reforms under Mahathir’s leadership • None had the impact as that of the Government Transformation Programme and its NKRAs and MPKIs Prof. Datuk Dr. John Xavier

6. “… the country’s leadership… will bring a new approach to face a new age… “…introducing a new paradigm for performance through rigorous use of KPIs… “ The Government is set to begin the transformation process” “ The KPI / KRAoffer clear measures designed to ensure that the government is working to better serve the needs of Malaysians” We are committed to undertake this transformational process… …focus on outcomes… …these goals will hold my Government accountable to the Rakyat…   …I will be personally involved in reviewing theprogress…” “ Our real work will begin as we make the transformation of government services happen” …represent our nation’s top strategic priorities…  … involve deep commitment and high demands from civil servants” … the breadth and depth of the initiative is unprecedented… Najib(Our Prime Minister) has calledfor whole government transformationto deliver outcomes for the citizens PM’s cabinet announcement speech (9th April 2009) PM’s 100-Day speechintroducing N-KRAs PM’s Statement on Government Transformation (12th Sept 2009) Prof. Datuk Dr. John Xavier

7. National Key Result Areas align with: 1Malaysia, People First, Performance Now 1Malaysia People First Performance Now National Key Result Areas Crime Prevention Reducing Corruption Strengthening National Unity Access to Quality and Affordable Education Enhanced PublicService Delivery Raising the Living Standard of the Low-Income Earners Government for the People Upgrading Infrastructure in the Rural and Interior Regions Improving Public Transportation Prof. Datuk Dr. John Xavier

8. 8 Ministers have been selected to deliver impact on oneof the six NKRAs in addition to their own set of KPIs Lead Ministry Delivering on One Malaysia, People First, Performance Now Reducing crime MOHA MOT Improving urban public transport Raising living standards of low income households KPWKM Widening access to quality and affordable education MOE BHEUU Fighting corruption MRRD Improving infrastructure in rural areas Prof. Datuk Dr. John Xavier

9. GTP – Bureaucrats deferringto the Leviathan • Political intervention in service deliveryimprovements was inevitable after the 2008political tsunami . It’s now about political survival • Coordination lynchpin • Political side – PM/DPM • Public Service - The Chief Secretary of the Governmentcum Head of Service • PM heads the monthly reviews of NKRA performanceand six-monthly MKPI reviews • The Chief Secretary chairs all reform coordinating committees • Stakeholders are consulted Prof. Datuk Dr. John Xavier

10. PMS: wallowing at the centre or tinkering at the frontier? • Ministers’ KPIs • NKRAs – emulating best practice but formulation and implementation one of its kind Prof. Datuk Dr. John Xavier

11. We took a radical approach A 6 + 1Labs Establish in detail whatneeds to be done B Open Day Share lab output withpeople and seek their feedback C GTP Roadmap Tell the people whatwe are going to do D 4 months Monthly & Annual Comms Tell the people whatwe have delivered We are the only Government who is doing all of the above

12. PMS: wallowing at the centre or tinkering at the frontier? • NKEAs – another pioneering effort in the steps of NKRAs • Renewed focus on outcomes • Integrating planning and budgeting – Capital budgeting (5-year plans) and operational budgeting (OBB) • Aligning performance with the national agenda Prof. Datuk Dr. John Xavier

13. Source: EPU

14. Grappling with performance issues • Ensuring enforcement • OBB will hit the agency pockets for non-conformity: • integrated approach (combined operating and development expenditure) to PMS • NKRA – a huge success as it is politically-driven from the top • Pressure upon the public service to demonstrate its relevance • Alignment between department head’s KPIs and Minister’s KPIs Prof. Datuk Dr. John Xavier

15. Grappling with performancemanagement issues • Plethora of initiatives • Difficulty of measurement • Data availability and integrity • Lack of alignment to the national agenda of agency goals and budget structures • Gaming and number crunching • The elusive outcomes – how to measure them? • Flagging interest after the ‘flavour’ is gone Prof. Datuk Dr. John Xavier

16. Grappling with performance issues • Question zero – • Measurement of what? • What are we trying to accomplish? The most common form of stupidity is forgetting what we are trying to do • Nietzsche Prof. Datuk Dr. John Xavier

17. are we over measuring? • OBB: • 5 strategic thrusts • 24 KRAs • 30 programmes • 200 KPIs to measure outcomes Prof. Datuk Dr. John Xavier

18. Grappling with Performance Issues:Cascading KPIs Tier 2 • SEC-GEN • DIVISION DIRECTORS • DY SEC-GEN (P) • DY SEC-GEN(O) Tier 1 Tier 3 Prof. Datuk Dr. John Xavier

19. How do we solve these performance issues? • Data management – Leverage data from NKRAs • Plethora of initiatives - Integrate performance assessments of central agencies in the CEO scorecard Prof. Datuk Dr. John Xavier

20. Scorecard: Director General , Economic Planning Unit ( EPU ) Common Across Civil Service • GDP Growth Rate • National Competitiveness Index • Agency-specific KPIs • Strategic KPIs (Treasury) • Achievement of macro economics targets by 2010 • GDP (5%) • Unemployment of less than 3.5% • Bumiputera equity ownership of 30% • Eradicating poverty to 2.0% • Eradicating hardcore poverty to 0% Agency Specific • 80% achievement of National Development Expenditure • Quality of Consultation (Assessed by Minister) • Clients’ Charter Compliance Index • Auditor-General’s Rating • MAMPU Rating Personal Effectiveness • Behavioural Competency Assessment (3600 assessment by KSN & KPPA (LNPT), selected KSUs/KPs and direct reports) • Climate for Performance Employee Satisfaction Index (Assessed by direct reports) 30% 60% 80% 100%

21. How do we solve performance issues? • Difficulty in performance measurement – proxy indicators, process measurement • Gaming – benchmarking KPIs and targets with other countries Prof. Datuk Dr. John Xavier

22. Sustaining the reforms ala NPM • Responsive governance and citizen participation • Focus on the touch points of the public • Low-hanging fruits before the high-hanging ones • NKRA driven • Persistent follow-up Prof. Datuk Dr. John Xavier

23. Lessons from the Malaysian experience • Problem-solving approach vs. best practice approach • Wave-like strategy on PMS • Must be politically driven from the top Prof. Datuk Dr. John Xavier

24. Lessons from the Malaysian experience in PMS • Getting KPIs right takes several cycles • We will only learn by doing • We won’t get it right the first time • KPIs are only one part of performance management. • We must follow-though with regular reviews of performance • Use feedback to: • improve departmental performance • determine rewards and consequences Prof. Datuk Dr. John Xavier

25. Lessons from the Malaysian experience in PMS • Performance management is one important part of ensuring delivery • Other critical elements: • managing perceptions and expectations • building capacity • leadership commitment to stretch targets • structure, systems and processes • link between performance and reward Prof. Datuk Dr. John Xavier

26. Lessons from the Malaysian experience in PMS • Resources must match targets • Quick wins to maintain momentum • Focus on few key results areas that are most important for the public • Buy-in if there is a clear link between KPIs and public happiness • If KPIs are seen only as assessment tools, they might be sabotaged • Better no KPIs than wrong KPIs Prof. Datuk Dr. John Xavier

27. Thank you for listening! johnantonyxavier@hotmail.com johnantony@putra.upm.edu.my