Structure of the Administration (political and administrative system)

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1 Thailand Performance Management 1. Introduction Structure of the Administration (political and administrative system) Since the declaration of the first constitution in 1932, the politics and government of Thailand have continued to develop under the democratic system. This constitution stipulates that in the parliamentary form of government the King is under the constitution, the House of Representatives was the legislative organization, the Cabinet was the administrative organization, and the law courts are the representatives of judicial power. In 2007, Dynamics in the country s environment, that is political changes (promulgation of the Constitution of the Kingdom of Thailand 2007 and general election in coming December). Summary of the Public Administration In Thailand there are three levels of government: the national administration, provincial administration (in 75 provinces), and local administration (municipalities, Tambon Administration Organization, etc). After the restructuring of ministries and departments in 2002, The government agencies consist of 20 ministries, 143 departments and nongovernmental organizations (19 Public Organizations and 3 Service Delivery Unit). General Reforms 1 The implementation of the comprehensive bureaucratic reform in 2002 started by embarking on overhauling administrative processes and the public sector s structure at the same time. Consequently, various laws and regulations pertaining to state administration and laws required for transformation at ministerial, bureau, and departmental levels have been amended and put into effect since 3 rd October 2002, such as the State Administration Act and Government Restructuring Act. 1 Sources: OPDC Annual Report 2006

2 The State Administration Act, Amendment Issue 5, 2002 prescribed a vital principle in Section 3/1, stating that state administration must be conducted for the benefits and wellbeing of the people, or so called citizen-centered principle. This constitutes an effort to change values, paradigm, and working culture of the public needs more responsively. Additionally, good governance principles have also been highlighted and eventually the Royal Decree on Criteria and Procedures for Good Governance was enacted in The efforts to fulfill the intent of Section 3/1 of the state administration law and the Royal Decree on Criteria and Procedures for Good Governance have been in high gear over the past five years. The Public Sector Development Commission (PDC) thereby proposed the Strategic Development Plan for Thai Bureaucratic System to the cabinet for approval. The aim was to systematically prescribe implementation framework, particularly identifying objectives, key performance indicators (KPIs), Strategies, and measures that ensures effective implementation in various aspects. 2. Performance management 2 The purpose of Performance management; PDC has initiated the performance management to create the mechanism and the implementing system according to the Performance Agreement (PA) to monitor and evaluate the performance of the public sector at both organizational and individual levels, to formulate and develop the incentive measures, and to promote the improvement of the auditing and evaluating system for stronger public sector. Background of the Performance management The Use of Incentive Schemes to Promote Good Governance: Performance Agreement 2 Sources: OPDC Annual Report

3 The Cabinet approved the principles, criteria and procedures to use incentive schemes to promote good governance, consistent with Section 3/1 of the State Administration Act (volume 5) of 2002, as proposed by the OPDC on 30 September Principles: According to the Strategic Plan for Public Sector Development ( ), the public sector in Thailand is required to effectively provide public services and related functions in order to respond to needs of the people. The public sector shall be rightsizing and consist of the better service quality, high performance and an open bureaucracy. Therefore, the use of incentives schemes in public agencies promotes public sector development and is in accordance with the national, economic and social strategies as well as organizational and personnel needs. Various tangible and intangible incentive schemes shall promote collaboration for work efficiency. Mechanisms of performance agreement Each department or province is required to present its plan for change. Two committees are involved in setting the incentive scheme agreement: the Agreement Monitoring Committee, which determines the performance expectation framework and targets as well as implementation measures; and the negotiation and Evaluation Committee, appointed by the Public Sector Development Commission, to negotiate the approved agreement and to evaluate performance as previously agreed Incentives A variety of incentives includes sharing benefits from expanse reduction, annual bonuses and recognition. The use of incentive scheme to promote good governance requires public agencies to develop strategic plans; to negotiate appropriate performance indicators; to set up targets consistent with strategic plans; to set up criteria; and to sign performance agreements. Implementing organizations of Performance agreement Performance agreement has been created as a tool for monitoring and evaluation of performance in order to promote good governance. Every department and province 3

4 (except Bangkok) must go through the process of negotiation and agreement of pact details, comprising of key performance indicators, targets, evaluation processes and internal scheme. Negotiation and evaluation committees were set up by the Chairperson of the Public Sector Development Commission (PDC). The concept of Balanced Scorecard has been applied as a framework of performance evaluation which is composed of 4 perspectives: effectiveness of missions, quality of service provision, efficiency of work processes and organizational development. Performance pact scheme had been implemented in Every government agency and province had to choose to pursue one of the following incentives schemes based on its readiness and willingness: Group 1 Across-the-Board Scheme, Group 2 Challenge Scheme, Group 3 Action Learning Scheme. From the fiscal year , government agencies, higher education institutions, provinces and public organizations have participated in the same incentives scheme and gotten to familiar with the preparation of performance agreement. Performance agreement development has helped each agency create clear direction and shared results of an agency, resulting in a better goal setting and internal monitoring system. Monitoring and evaluation of implementation Performance monitoring and evaluation is part of the process of continuous improvement, starting with planning, doing, checking and action. Every public agency and province must administer itself in line with 4-year Government plan. In so doing, it must develop its performance agreement, consisting of perspectives and go through a negotiation process with the Office of the Public Development Commission (OPDC) to determine performance indicators, targets to be achieved and scoring criteria. In addition, it must report its implementation progress in a form of Self-Assessment Report Card (SAR) at the end of the 6 th 9 th and 12 th months. Furthermore, OPDC performed site visits as part of the performance evaluation twice a year: 4

5 Site visit I (April-May): This mid-term visit is for monitoring the implementation process. It is time for making mutual understanding between the agency and assessors on definition and performance evaluation system. The visit also includes an observation of the site operation and service delivery. Site visit II (November-December): This site visit is for verification of evidences supporting the achievement of performance pact of the agency. Challenges in Implementing Performance Management 3 1. Performance management systems: Formulating key performance indicators - Most of public agencies struggled with identifying strategic key performance indicators and appropriate targets to guide achievement efforts. While able assistance has been provided by a private firm hired by the OPDC, some agencies appear to need some continued assistance. For all agencies, some continuous spot-checking should also be done for quality control. - The process of implementing performance measurement is complex and timeconsuming. This process is overwhelming most of the small teams assigned to manage the process in each agency, because many of the team members have regular tasks to accomplish in their agencies. Eventually it will become a valuable tool in making public services more effective and efficient and in enabling national development. - A crucial element of taking responsibility for reaching results is the recognition that factors beyond agency control may contribute to the success or failure to reach the desired results. Employees may feel uncomfortable committing themselves to be accountable for that which is beyond their control. One useful method for reducing the anxiety of accountability is the use of what can be called intermediate outcomes, which, once accomplished, contribute to the long-term and overall desired results. If the 3 Source: Evaluation Report : Results-Based Management in Thailand written by Jeanne-Marie Col, Ph.D and her team. 5

6 outcome is segmented in this manner, an agency is more likely to feel comfortable in being accountable for accomplishment. - There is also a problem of the relevance and accuracy of indicators, and whether reaching a target means anything. It will take some time before most Thai agencies, especially the smaller ones, have enough experience with performance measurement to be able to use targets to encourage results without incurring any adverse and unwanted effects. - The use of Self Assessment Reports (SARs) to report on organizational performance is challenging. Despite the practice of spot-checking, there may be reasons for an agency to overstate its accomplishments in these reports. This behavior could be encouraged when the results are used to reward or punish agencies. However, when performance management systems are internalized and used by managers because they want to improve agency performance, the agency will have less of a reason to exaggerate. - Finally, using KPI targets for rewards and punishments may distort human behavior into playing a game. However, performance management systems are likely to yield more accurate and useful results if employees are actually trying to improvement organizational performance. While systems of rewards and punishments may be essential to motivate interest, the need to be carefully monitored and evaluated for their potential to inspire gaming and distortions in performance. 2. Inter-institutional integration requirements and issues New and innovative approaches of performance measurement are not always an easy fit with existing institutional practices and structures both horizontally (across agencies) or vertically (across levels of governments). The introduction of performance initiatives can engender unexpected tensions and conflicts within departments and ministries, as well as across departments and ministries. Therefore, building ways to harmonization of performance measurement within and across agencies and ministries is a priority in balanced and integrated performance measures. 6

7 3. The role of the executive in performance management and coordination, especially in provincial teams The roles of ministers and of governors are becoming more critical to the adoption of the mechanisms of performance management, and to the management of the tensions between provincial objectives and the national department objectives in implementing performance management. Abilities to coordinate departments at the provincial level and to reflect national priorities of the central government are a key aspect for reforming management. In addition, the responsibilities of technical expertise are getting heavier at various stages of decision-making as processes and procedures of performance systems become more complicated. Focus on integrated area development at the provincial level brings new responsibilities for the provincial governors, who will increasingly coordinate the inputs and activities of the line ministries and departments at the provincial level to achieve results in the provinces. It is important that appropriate resources come under the control of the Executive Governors, although this shift may initially be resisted by the line departments. Executive Governors will require special training in negotiations and leadership in harmonizing the interests and resources of the departmental units at provincial level. 4. Capacity building and learning processes The recent expansion of Results-Based Management (RBM) to all agencies has placed a large burden on current capacity and has made training essential for the internalization of the practices and to instill real ownership of the process. Capacity building is being accelerated and facilitated by regular training sessions that bring together the OPDC/innovation teams from several departments and provinces. 5. The impact of structure and Information Availability on RBM Implementation - Defining measures of performance. Among the many challenges here are defining appropriate outcomes and connecting the performance of agencies and programs with those outcomes. 7

8 - Data are often limited and must be developed over time to support performance measures. Emerging and newer programs will pose inherent problems because by definition, very little information is available for these initiatives. 6. Incentives, risk and dysfunctional behavior patterns The introduction of incentives has the dual-edged potential of both increasing attention to performance information as well as increasing the likelihood of the corruption of the integrity of the measures. Agencies will have incentives to increase their focus on performance as well as to distort or select those measures which show them in the best possible light. The greater the incentive, the more necessary are central review, oversight and auditing of performance systems. 7. Role of the people: voice and governance In Thailand, modern-style popular participation in planning, managing implementation, evaluation and use of feedback has been emerging for more than 20 years. Recently, many activities have been undertaken to energize village and Tambon councils, as well as non-governmental organizations at national and sub-national levels. Although citizen surveys are being used, their use needs to increase at all levels. Many governments have found popular participation strategies to serve several purposes: informing people about available services and functions, learning how well these operation are being handled, soliciting suggestions about improving government performance, and measuring the gap between what is desired and what is being delivered. 8. Sustainability Developing a dynamic institutionalization of demand involves making government official, civil society, non-governmental organization and individual citizens aware of the results management process and the increase in results that evolves from this practice. In this way, both citizens and manager become the main stakeholders in sustaining RBM. The OPDC serves to manage and catalyze the processes of developing KPIs and making clients 8

9 / citizens aware of mechanisms to voice their needs and comment on government s responsiveness to their needs. Furthermore, linking individual performance through management-by-objectives (MBO) linked to RBM can contribute to sustainability of the RBM system in which civil servants are more confident that the system of linking rewards and results is going to continue and requires their attention and commitment. In Thailand, this system of MBO is further reenforced when civil servants at all levels are appraised through this process, and even Ministers and Governors are signing performance contracts with the Prime Minister Result of the Performance management The performance agreement is a mechanism to enforce administrative liability for each agency. Top executives are forced to take full responsibility and work as professionals. This will increase the effectiveness, efficiency, quality of service, transparency, and open bureaucracy, providing and opportunity for the public to scrutinize the work of the government. 3. Next Steps 4 - Align RBM (performance system) with other management systems, including the budget and audit systems. Sustainability of performance systems is increased when performance indicators and measurement are integrated into the budget process and budget documents, including presentation of measures in the budget and discussion of how budget levels will affect performance and budget allocations. - Cascade RBM vertically throughout each agency. To ensure that performance goals are taken seriously throughout an agency, OPDC can ensure that KPIs inform the entire range of performance measures and accountability systems used throughout each agency. 4 Source: Evaluation Report : Results-Based Management in Thailand written by Jeanne-Marie Col, Ph.D and her team. 9

10 These KPIs need to be logically related vertically so that accomplishments at each level, from bottom to top, contribute to accomplishment of strategic goals of the agency. - Intensify training in agencies for the OPDC innovation teams, and increase training in OPDC innovation for line manager at all levels. Manager who have not heretofore been required to develop the required information or used it to manage will need training to understand the nature of tasks involved and to learn form the experiences of comparable public and private within Thailand and throughout the world. - Integrate RBM with individual performance appraisal by implementing a MBO approach that links individual contributions to government results. - Investigate KPIs in best practice case studies for new ideas for measurement and targets. All agencies should benchmark their practices to those that are identified as most effective and efficient. Best practices need to be independently evaluated by OPDC. Best practices are among the credible and compelling tools to promote learning and successful adoption of promising approaches. - Improve information systems to facilitate comparison of KPIs and comparisons of results. OPDC can develop Information systems to make performance measurement and management work together. Measures can serve as effective accountability tools only if information and data exist to report on progress accomplished in achieving these measured goals. Often, the development of measures and goals necessarily precedes information systems, but these systems should not be too far behind lest they undermine the credibility and utility of the performance measurement themselves

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