Assoc. Prof. Dr. Wongsa Laohasiriwong Khon Kaen University Performance Based Management
Scope of the Module • Performance based management • Strategic formulation • Performance measurement • Resistance to changes • Resistance to changes management
Performance • The results of activities of an organization or investment over a given period of time.
Management • Management in all business and human organization activity is simply the act of getting people together to accomplish desired goals and objectives.
Performance Indicators • Effectiveness • Efficiency • Quality • Organization Development
Effectiveness Degree to which objectives are achieved and the extent to which targeted problems are resolved. effectiveness is determined without reference to costs effectiveness means "doing the right thing." Efficiency ability to produce a desired effect, product, etc. with a minimum of effort, expense, or waste; quality or fact of being efficient the ratio of the effective or useful output to the total input in any system. "doing the thing right," Effectiveness VS Efficiency Business Dictionary. COM
Quality • Client satisfaction
Organization Development • Human resource development (HRD) • IT development of HRD
Why Assess Performance? • Need for cost containment . • Evidence of variations in use of services (underuse, overuse, misuse). • Evidence of errors and of inadequacies in the quality of service provisions. • Rising public expectations regarding accountability and transparency. • Demand of ‘value for money’. • Increasing access to information, rising awareness of service errors ► increasing willingness to litigate and advocate . (Source, J. Layburn, “Performance Monitoring/Management of Service Delivery,” RIPA International @www.ripainternational.co.uk)
Public sector challenges • A variety of factors create barriers to the planning and adoption of performance management in the public sector: (Source: M. Bailey and K. Miller, Deloitte Consulting LLP, 2007)
Performance-based management • Performance-based management is a systematic approach to performance improvement through an ongoing process of establishing: • strategic performance objectives • measuring performance • collecting, analyzing, reviewing • reporting performance data • using that data to drive performance improvement * Accountability for performance is established at all steps in the framework*
Performance-based management • It is a way of getting people to do what you want them to do and to like doing it. • Ensuring employees are focusing their work efforts in ways that contribute to achieving the agency’s mission • setting expectations for employee performance • maintaining a dialogue between supervisor and employee to keep performance on track, and • measuring actual performance relative to performance expectations. • (Source: W. Artley, D.J Ellison and B. Kennedy, “The Performance-Based Management Handbook: Volume 1 Establishing and • Maintaining a Performance-Based Management Program,” Performance-Based Management Special Interest Group (PBM SIG), • September 2001)
Performance-based management • Performance management at any level in an organisation should demonstrate : • Knowledge of what you are aiming for • Knowledge of what to doto meet your objectives • Knowledge of how to measure progress towards your objectives • Knowledge of how to detect problems and remedy them (Source, J. Layburn, “Performance Monitoring/Management of Service Delivery,” RIPA International @www.ripainternational.co.uk)
Performance-Based Management: 3 Critical Questions • Where do we want to go? • How will we get there? • How well are we doing trying to get there?
Performance-Based Management - How You must • Align your organization strategically, • prepare your people, make sure everyone understands the "rules" and their roles. (Source: A Reeds and S Carter, Acquisition Directions, Advisory, Issues and Answers, May 2004)
Performance-Based Management - How • Set up good communications processes, recognize that there will be risk to be managed,
Performance-Based Management - How • Put in place a framework for measuring performance that lets you understand where you've been, where you are, where you need to go --and why.
New Public Management Strategy Formulation Public Administration Plan 4 year performance plan S W O T Vision Strategic Issue Goal (KPI / target) Strategies Strategic Control Strategy Implementation Action Plan Strategic Management Process Risk Assessment & Management Structure Process/IT Alignment Rule & Regulation People/ Culture Blueprint for Change
An ongoing dialogue between manager and employee that links expectations, ongoing feedback and coaching, performance evaluations, development planning, and follow-up. Performance-Based Management - What (Source: www.utexas.edu/hr/er/perfeval/index.html)
Characteristics of a Performance Based Management System *High percentage of performance appraisals completed. *Clear linkage between employees’ jobs and the organization’s mission. *Investment of money and time in training and development activities. *Open sharing of performance measures. *Reward differentiation between high and low performers. *Consistent recognition of good performance. (Source: http://hr.dop.wa.gov/hrreform)
Performance Based Management System: Benefit • It provides a structured approach to focusing on strategic performance objectives. • It provides a mechanism for accurately reporting performance to upper management and stakeholders. • It brings all “interested” parties into the planning and evaluation of performance. (Source: W. Artley, D.J Ellison and B. Kennedy, “The Performance-Based Management Handbook: Volume 1 Establishing and Maintaining a Performance-Based Management Program, ” Performance-Based Management Special Interest Group (PBM SIG), September 2001)
Performance Based Management System: Benefit • It provides a mechanism for linking performance and budget expenditures. • It represents a “fair way” of doing business • It provides an excellent framework for accountability. • It shares responsibility for performance improvement. (Source: W. Artley, D.J Ellison and B. Kennedy, “The Performance-Based Management Handbook: Volume 1 Establishing and Maintaining a Performance-Based Management Program, ” Performance-Based Management Special Interest Group (PBM SIG), September 2001)
What role do employees have in performance management? • Performance management must be a shared responsibility of employees and managers. • Employees are responsible for seeking clarification when needed so they understand what’s expected of them and for performing the work in a way that meets expectations. • Employees are also responsible for participating in the performance evaluation process and for communicating successes and problems to supervisors so the supervisor can better measure progress and provide assistance where needed. (Source: http://hr.dop.wa.gov/hrreform)
Six Disciplines of Performance-Based Management • Cultural Transformation--Proactively manage the organizational and cultural changes integral to the success of the initiative; • Strategic Linkage--Provide a consistent vision throughout the organization, making sure the desired results reflect organizational strategic goals; • Governance--Establish roles, responsibilities, and decision-making authorities for project implementation;
Six Disciplines of Performance-Based Management • Communications--Identify the content, medium, and frequency of information flow to all stakeholders; • Risk Management--Identify, assess, monitor, and manage risks; and • Performance Monitoring--Analyze and report status--cost, schedule, and performance--on a regularly scheduled basis during project exe. (Source: A Reeds and S Carter, Acquisition Directions, Advisory, Issues and Answers, May 2004)
Purpose of Performance-Based Management System • Purpose of the performance management system is to ensure that: • The work performed by employees accomplishes the work of the agency; • Employees have a clear understanding of the quality and quantity of work expected from them; • Employees receive ongoing information about how effectively they are performing relative to expectations;
Purpose of Performance-Based Management System • Awards and salary increases based on employee performance are distributed accordingly; • Opportunities for employee development are identified; and • Employee performance that does not meet expectations is addressed.
Purpose of Performance-Based Management System • An operative performance management system shall consist of: • A process for communicating employee performance expectations, maintaining ongoing performance dialogue, and conducting annual performance appraisals; • A procedure for addressing employee performance that falls below expectations; • A procedure for encouraging and facilitating employee development; • Training in managing performance and administering the system; and • A procedure for resolving performance pay disputes • (Source: www.osp.state.nc.us/manuals/manual99/pms.pdf)
Performance-Based Management – Common Elements • Context (who or what is to perform and what is to be accomplished). • Goals or targets (form & level of accomplishment). • Information about performance • Collection of information • Modifications/Change possible (Source: Public Health Performance Management Curriculum Prepared by Center for Public Health Practice, UIC School of Public Health)
Performance-Based Management – SMART Elements Performance elements must be aligned with organizational goals and should be: • Specific, clear, and understandable • Measurable, verifiable, and results oriented • Attainable • Relevant to the mission • Time-bound with a schedule and milestones (Source: G.A. Steinberg and A.I. Wolfrey, “Performance Management Appraisal Program (PMAP), Government Performance Summit 2008, U.S. Department of Health and Human Services February 26, 2008)
Performance-Based Management – SMART Elements People should be able to answer the following questions. • What are my roles and responsibilities? [Performance agreement] • What standards are expected of me? [Performance minimums] • Who is going to give me feedback? [Manager, peers, all?] • How often will they give me feedback? [One to one frequency] • How am I doing? [Review process] • Where do I go from here? [Targets for next period] • How do I get there? [Development plan] (Source: www.owlweb.co.uk/option7/samples/perform.shtm)
Key Components of Performance Management • Applying Appropriate Standards • Measuring Key Aspects of Performance • Reporting and Interpreting Measurements • Making Changes Based on Measures of Performance (Source: Silos to Systems: Using Performance Management to Improve the Public’s Health. Turning Point Performance Management National Excellence Collaborative: Seattle WA; Turning Point National Program, 2003)
Performance-Based Management – Pitfalls to Avoid • Do not rush through the Performance Planning Process (Employee or Supervisor) • Do not overrate a poor performer as a motivational tool • Do not focus on one specific incident - review the entire period which the appraisal covers • Do not go solely by memory - base the review on accurate and factual data • Length of service or an employee’s grade does not necessarily mean better performance • Avoid bias about an employee based on your personal feelings for that individual (Source: G.A. Steinberg and A.I. Wolfrey, “Performance Management Appraisal Program (PMAP), Government Performance Summit 2008, U.S. Department of Health and Human Services February 26, 2008)
Critical Components of Performance Based Management - Applying Appropriate Standards • Identify and apply relevant standards (what will be measured). • Standards are one form of performance measure; they are generally objective standards or guidelines that are used to assess performance (“standard” here means a standard way of measuring rather than something specific to achieve). • Identify appropriate indicators (how it will be measured).
Critical Components of Performance Based Management - Applying Appropriate Standards • Indicators are another form of performance measure; they are the data or information that is used to assess progress toward a performance standard. • Set goals and targets • The planned or expected level of performance • Communicate expectations
Critical Components of Performance Based Management - Measuring Performance • Relies on indicators that document where performance is in relation to the target established for a standard • Develop data systems • Collect data
Critical Components of Performance Based Management – Reporting Progress • Analyze data • Convert data into useable information • Feedback to managers, staff, policy makers, and constituents • Develop a regular reporting cycle
Critical Components of Performance Based Management – Reporting Progress • Provide context for the report • How do the performance measures relate to mission and goals • Create clear, easy to read, report designs • Use simple charts and tables • Determine Reporting Frequency • When and how often
Critical Components of Performance Based Management – Improving Quality • Use data for decisions to improve policies, programs, and outcomes • Manage change • Create a learning organization
Critical Components of Performance Based Management – Improving Quality • Improvement comes only with change; but change doesn’t always improve results • Smart improvement relies on understanding how systems work • Systems rely on interdependencies which are as important as the system’s elements • Change is more difficult than setting goals, measuring or holding people accountable. “I would rather (measure, complain, blame, accept good enough, fight) than change!” (Source: Silos to Systems: Using Performance Management to Improve the Public’s Health. Turning Point Performance Management National Excellence Collaborative: Seattle WA; Turning Point National Program, 2003)
For Successful Performance Based Management • *All four Performance Management components should be present! • *And they should be integrated into the organization’s or system’s core operations! (Source: Silos to Systems: Using Performance Management to Improve the Public’s Health. Turning Point Performance Management National Excellence Collaborative: Seattle WA; Turning Point National Program, 2003)
Public sector performance management: unique challenges • The notion of “performance” is not an easy one to address in public sector organizations: Where profits or bottom line results are irrelevant • : Performance can be defined differently by different people • : If it is not defined, how do we know the organization is performing well? Legislature Taxpayers/ Voters • Statutory obligations • Electoral commitments • Avoiding embarrassments • Demonstrate achievements • “Doing more with less” • Sustainable Economy • Quality of Life • Safety Net Employees Customers • Job security and compensation • Workload and morale • Satisfaction • Values • Timely and responsive service • Accurate communications • Accessibility • Equity and dignity Public Servants have to balance multiple stakeholder demands and different people define performance differently (Source: M. Bailey and K. Miller, Deloitte Consulting LLP, 2007)
Performance Based Management -Examples • Context for “improvement” (is/is not) clear? • Goals or targets for improvement (are/are not) established? • Appropriate measures of performance (are/are not) collected? • Reports of measurements (do/do not) reach the proper parties? • Information from measurements (are/are not) used to make improvements? (Source: Silos to Systems: Using Performance Management to Improve the Public’s Health. Turning Point Performance Management National Excellence Collaborative: Seattle WA; Turning Point National Program, 2003)
What does the Public Sector hope to gain from Performance-Based Management? • Focus of the top three benefits organizations hope to realize: • Resource alignment and optimization • Strategic and cross-departmental alignment, collaboration and accountability • Budgeting and planning process aligned with strategy • Alignment becomes a concern because these benefits are too often not realized within organizations, whether private or public (Source: Becca Goren, Better Management.com)