Performance Management in Asia. M. Jae Moon Department of Public Administration Yonsei University

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1 Performance Management in Asia M. Jae Moon Department of Public Administration Yonsei University

2 Outline Background Performance Management Issues (levels, actors, tools, and processes) Comparative Asian Performance Management Opportunities and Challenges Conclusions

3 Key questions Performance management? What are the models that can be used to measure organizational performance in the public sector What are the dimensions of performance? Levels, tools, and actors?

4 Performance Management? performance management is not an end in itself rather its overall objective is to support better decision-making by politicians and public servants leading to improved performance and/or accountability and, ultimately, to enhanced outcomes for society (OCED 2005, p. 56).

5 Performance Management Key Issues in Public Administration Governance Accountability Performance Diffusion of Performance Management Management by Objectives Logic Model Balanced Scores ZBB Performance Budgeting

6 Why Performance? GPRA? Performance versus Result? Monitoring and Accountability Narrowing Information Gap between Legislative and Executive Branch or Managers and Subordinates Institutional Design: Quality and Incentive Structure Cascading Approach Mission-Goals-Objectives-Measurable Targets System-Government-Agency-Bureau-Team/Group-Individual

7 3E s model Economy Costs of procuring services Technical efficiency Allocative efficiency Efficiency Achievement of formal service objectives Effectiveness

8 IOO model Expenditure Staffing Equipment Quantity of service Quality of service Effectiveness Impact Equity/fairness Inputs Outputs Outcomes Efficiency Cost per unit of outcome/ value for money

9 Multidimensional nature of performance Models provide: economy, technical efficiency, quantity and quality, effectiveness, cost per unit of outcome, impact, equity. But overlooks: Responsiveness to citizens, users and staff? Governance: probity, participation accountability?

10 Levels of Performance Individual Performance job appraisal Team/Group Performance Group evaluation/ 360 degree evaluation Organizational/Agency Performance Satisfaction survey, quality/quantity Government Performance Government effectiveness National System Performance Governance indicators, competitiveness index

11 Dimensions of Organizational Performance (Boyne, 2002) Performance Domain Outputs Sub-performance domain Quantity, Quality Efficiency Cost per unit of output Service Outcomes Responsiveness Governance Equity, Formal effectiveness, impact, value for money (cost per unit of service outcome) Citizen satisfaction, consumer satisfaction, staff satisfaction Accountability, civil rights, human rights, probity

12 Governance Indicators (World Bank) Governance Dimensions Contents Voice and Accountability Political stability and absence of violence Government effectiveness Regulatory quality Rule of law Control of corruption the extent of free and independence of media as well as democratic political process, civil liberties, and political rights various perceptual measures reflecting the likelihood that the government in power will be destabilized or overthrown by possibly unconstitutional and/or violent means The quality of public service provision The quality of the bureaucracy The competence of civil servants The independence of the civil service from political pressures The credibility of the government s commitment to policies Measures of the incidence of market-unfriendly policies such as price controls or inadequate bank supervision Perceptions of the burdens imposed by excessive regulation The extent to which agents have confidence in and abide by the rules of society perceptions of the incidence of crime, the effectiveness and predictability of the judiciary, and the enforceability of contracts Perceptions of corruption

13 Governance Indicators: Selected Asian Countries Country Voice/ Accountability Political Stability Government Effectiveness Regulatory Quality Rule of Law Control of Corruption Japan China Hong Kong Indonesia Korea Malaysia Philippines Singapore Taiwan Thailand Vietnam

14 Country Voice and Political Government Regulatory Rule of Law Control of Accountability Stability Effectiveness Quality Corruption OECD Latin America South Asia Eastern Europe&Baltics Eastern Asia Middle East & North Africa Subsaharan Africa

15 Singapore: Housing Development Board Performance indicators Government classification of measures Classification of measures 90% of waiting time is equal or less than 10 minutes Effectiveness Responsiveness Written replies were given Responsiveness Not a performance measure There was a maximum waiting time of 8 minutes at the counter Effectiveness Responsiveness Written replies were given within 3.8 working days Responsiveness Responsiveness Calls were attended to within 4 rings Responsiveness Responsiveness Customers were greeted appropriately Courtesy Responsiveness

16 Performance Management Tools Level of Performance Individual Job Performance Performance Management tools and techniques Management by Objectives Job Appraisal for low and middle managers Performance agreement system (PAS) for high ranking officials Balanced Score Card System 360 Degree Evaluation by managers, colleagues, subordinates, and customers Individual Performance = Job Appraisal (70%) +360 Degree Evaluation (30%) Team Performance Agency Performance 360 Degree Evaluation Balanced Score Card (Finance, Customers, Business Process, and Learning and Growth)

17 Job Appraisal In Korea Grade S A B C 20% 20-50% 50-90% 10% PFP 230% 160% Below 90% 0%

18 Overestimation of Performance Model 1 Service performance overestimation Model 2 Consumer satisfaction overestimation Independent variable ß se ß se Constant Environmental factors Population (log) ** * 6.76 Population density (log) -3.72** * 3.03 Deprivation Management factors Target-setting 5.22** Benchmarking Partnership User consultation 4.31** F statistic 8.92** 2.32* R N= 58 58

19 Levels and Performance Management Tools (Korea) Level of Performance Individual Job Performance Performance Management Tools Management by Objectives Job Appraisal for low and middle managers Performance agreement system (PAS)for high ranking officials Balanced Score Card System 360 Degree Evaluation by managers, colleagues, subordinates, and customers Individual Performance=Job Appraisal (70%)+360 Degree Evaluation (30%) Team Performance Agency Performance 360 Degree Evaluation Balanced Scorecard

20 On-nara System

21 On-nara System

22 IT-enabled Performance Management System in Korea Government Work Management System Real-time handling & management of major policy tasks and jobs Quantitative & qualitative evaluation of outcomes and reflection of evaluation results in performance Customer Management System Establishment & automation of services workflow Real time reflection of customer s opinions in performance Integrated Administrative Innovation System Rewarding System Departmental & individual performance evalution, 360-degree appraisal system, and time-series analysis Reflection of analysis results in personnel management and rewarding Performance Management System Development of core performance indices for achievement of strategic goals in light of BSC Routine monitoring for real-time evaluation of performance

23 Asian Performance Management Survey Cambodia, China, Indonesia, Japan, Korea, Malaysia, Philippines, Thailand, Vietnam and Adoption of Performance Management Malaysia (1992), Indonesia (1996), Korea (1997), Japan (2001), Cambodia (2002), Indonesia (2003), Vietnam (2005) Model Countries Korea and Japan (US, Canada, UK) Thailand (UK, Australia)

24 Modeling Performance Management USA Canada Australia Singapore Malaysia UK New Zealand UNDP Korea China Vietnam Philippines Japan Indonesia Cambodia Thailand Malaysia

25 Locus of Performance Management Level local regional central all levels Other Korea China Vietnam Philippines Japan Indonesia Cambodia Thailand Malaysia

26 Key Driving Actors for Performance Management Civil servants President/ Prime Minister Civil society Key actors driving performance management Parliament Special committee

27 Approaches to Performance Management Top down Neither/ Both approach to performance management Bottom up

28 Levels of Performance System level: Government Performance Agency level: Agency (Organizational) Performance (Korea, Indonesia, Program/Policy level: Program Performance (Japan) Unit level: Team (group) Performance (Korea) Individual level: Individual Performance (job appraisal)- Korea, Cambodia, Philippines

29 Comparative Asian Performance Management PM at the central government: Cambodia, Japan, Korea, and Thailand PM at the local governments: China, Vietnam Centralized PM: Indonesia and Cambodia Decentralized PM (More autonomy at the agency level): Korea, Thailand, Philippines

30 Dimensions of Performance Probity 2 Staff satisfaction 3 Impact 4 Value for money 4 Accountability 5 Citizen Satisfaction 5 Effectiveness Efficiency Quantity Quality Dimensions of performance

31 Performance Management Tools Country Cambodia Malaysia Indonesia Japan Korea Philippines Thailand Performance Management Tools Adopted JPA, LM, PFP JPA, LM, QC, PFP, SM, PB BSC, JPA, LM, SM, PB LM BSC, JPA, LM, PFP JPA, LM, PB JPA, LM, QC, PFP, SM, PB BSC: Balanced Scorecards, JPA: Job Performance Agreement, PFP: Pay for Performance, LM: Logic Model, SM: Strategic Management PB: Performance Budgeting, QC: Quality Circle

32 Major Challenges in Performance Management Bureaucratic resistance: 5.75 Lack of financial resource: 4.5 Lack of political leader s support: 4.0 Lack of citizen support: 3.62

33 Major Challenges Korea (bureaucratic resistance, lack of financial support Indonesia (lack of political leader s support) Cambodia (lack of financial support) Thailand (bureaucratic resistance

34 Conclusion Good to Great (Jim Collins)-Breakthrough Measurement Challenges Management Challenges Performance and Incentives Internal and External Environment From Performance Management to Integrated ITenabled Performance Management System

35 Next Questions? What information exists? What are priorities: administrative and political? What should be measured and what is? Who should make judgments and who does? How can better measures be developed?

36 Comparative Studies Historical Background: colonial experiences, political system and constitution Politics is the country democratic? How many political parties are there? The nature of the administration what is the employment status of civil servants, does the administration have pro-active or passive leadership? How is change managed? The social and economic context how has the country been affected by the Asian Financial Crisis?

37 Behn s Performance Leadership: 11 better practices (2004) Creating performance framework Articulate the organization s mission Identify organization s most consequential performance deficit Establish a specific performance target Clarify your theoretical link between target and mission Driving performance improvement Monitor and report progress frequently Build operational capacity Take advantage of small wins to reward success Create esteem opportunity Learning to enhance performance Check for distortions and mission accomplishment Analyze a large number and a wide variety of indicators Adjust mission, target, theory, monitoring and reporting, operational capacity, rewards, esteem opportunity, and/or analysis

38 What Can Be Done?

39 Things To Be Avoided

40 Frosbury Flop He jumped higher than anyone before by thinking the opposite from everyone else

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