What’s the score?

9 Jun 09
It’s more important than ever to improve public sector productivity, but top-down performance management approaches are destined to fail. A better method, argues Max Moullin, is to use a public sector scorecard

22nd May 2009

It’s more important than ever to improve public sector productivity, but top-down performance management approaches are destined to fail. A better method, argues Max Moullin, is to use a public sector scorecard

Performance management is becoming ever more vital to the public sector, and Public Finance’s May 1 issue highlighted some of the main areas of debate. However, the focus tended to be on the role of government and regulators. What advice can we offer the thousands of other people working in the public sector who are concerned with improving and monitoring their own services?

Also, if we look at the best ways managers can approach this, we should be able to see how central government and regulators can help. The main priority for all public sector organisations – whether central government department, Jobcentre Plus, local authority, fire service or hospital – should be to develop a performance management system that promotes real improvements in services, rather than a blame culture.

In particular, just as with central government, it is risky to impose targets from the top down without involving frontline staff or users. It is important to understand that all performance targets are flawed but some are useful. People talk about ‘perverse’ or ‘unforeseen’ effects of targets, but these are the predictable consequences of a top-down performance management culture, which encourages staff to prioritise an inevitably flawed target over service to the public.

Instead, we need to involve frontline staff, users and others affected in deciding which performance measures are likely to be useful. This applies both to an organisation’s own staff and to services which it outsources to others such as the third sector.

Another useful guideline is that all performance measures and targets should be based either on the outcomes that matter to users and other interested parties (including central government) or on evidence-based drivers of those outcomes. If they are neither of these they should be scrapped. This is vital if staff are to be empowered to provide good services. Too many measures prevent managers and staff from concentrating on the ones that matter.

In addition, we need a more collaborative approach to performance management. In particular, measuring results across organisational boundaries is important to ensure ‘buy in’ from all partners. The key to this is to focus on common outcomes and each partner’s role in achieving them.

One often overlooked aspect is the need to integrate risk management and performance measurement. Addressing the main risks is essential for any high-performing organisation. Any evaluation of performance without considering risk is incomplete. Organisations should work with staff to identify the main risks to the organisation and its users, together with actions to reduce or mitigate them, and to develop a risk-conscious culture without stifling innovation. In addition, they need to monitor these risks and their risk management strategy.

Many public sector organisations have very well-presented performance frameworks (often with impressive green, amber and red flags) but few integrate these with service and process improvement to enable them to achieve better performance on the measures chosen. Clearly, if the aim is to improve performance rather than just to report the data, it is insufficient just to measure results.

We need also to see how well the processes we put in place to achieve them are performing. Public and third sector organisations should develop their own integrated service improvement and performance measurement frameworks, focused on what they want to achieve for service users and others, including government.

One approach is to use a public sector scorecard that focuses on the results organisations and their stakeholders wish to achieve, including value for money; the processes that lead to operational excellence in delivering those outcomes; and the organisation’s capability to support its people and processes in achieving those results. The latter includes its organisational culture, the way it manages its people and its resources, and partnership working, all underpinned by effective leadership (see figure below).

It is designed for services in the public and third sectors and is consistent with health minister Lord Darzi’s recommendations. His 2008 report said: ‘NHS services… will need to develop their own quality frameworks combining relevant indicators defined nationally with those appropriate to local circumstances.’

The scorecard can be used by individual organisations or departments and is well suited to partnerships and working across organisational boundaries. For example, in Sheffield it is being used to address child obesity, facilitating joint working at director and councillor level between the city council and NHS Sheffield. It was also used to help evaluate the work of the government’s ethnic minority employment task force, set up to ensure Whitehall departments work together to provide a coherent, cross-government jobs strategy.

So how can central government and regulators assist organisations in their efforts to improve services, while ensuring that they are accountable both to central government and to the public?

A priority is to avoid contributing to a blame culture with seemingly arbitrary targets that are based neither on agreed outcomes nor on activities that have been shown to produce the desired results. If performance is below target, organisations or departments should be able to explain any exceptional circumstances that might have affected it.

There has been significant progress in recent years in the way government and regulators monitor performance – for example, the reduction in Public Service Agreement targets and the increasing emphasis on supporting working across organisational boundaries with the introduction of Comprehensive Area Assessments. Nevertheless, there is still considerable room for improvement.

Central government imposes targets for the best reasons: to improve public services and achieve value for money. But it is not alone in wanting to improve services – so do most organisations and people working in the public sector. We need to ensure they are not demotivated by having to constantly look over their shoulder, but are empowered to provide continually improving services.

Max Moullin is director of the Quality and Performance Research Unit at Sheffield Business School. He is a fellow of the Chartered Quality Institute and the Operational Research Society. For more details on the public sector scorecard go to www.shu.ac.uk/ciod/pss


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