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Negative Impacts of Performance Management and Target Setting in the UK’s Public Sector

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The increased focus on performance management and target setting within the UK public sector in recent decades has ultimately been more detrimental than beneficial. Critically discuss.


Performance management has been a topic of key interest since the introduction of governments. In its simplest terms performance management can be defined as “the policies, strategies and techniques intended to direct managers’ and employees’ attention towards the improvement of an organisation’s performance”. (Andrews, 2014). If we delve into the public sector, public management can used as a framework to aid politicians in managing results, swerving from the traditional prominence on managing inputs and processes.

Talbot states that “Rulers – even autocratic ones – have usually sought to justify their rule by showing how it is beneficial to be ruled” (Talbot 2007, P.491). This is still undoubtedly evident in the society of today, becoming especially prominent during periods of election with candidates promising the voters desirable benefits in exchange for their support. In recent times Jeremy Corbyn promised the public that labour would inject an extra £37billion into the NHS if he was to be voted into power, alongside the abolition of tuition fees. Political leaders then asked to be judged on their achievements “However, a perennial problem is the lack of specificity or measurement of delivery against these promises” (Talbot, 2007, P.491). In this case it later came to light that it would simply be impossible for the party to deliver on any of Jeremy’s promises, with conservatives describing the suggested policies as ‘nonsensical’, furthermore that through their delivery it would inflict additional damage to the economy. This is a common practice that politicians dabble in, later retreating from what they have delivered – leaving behind the recurrent case of ‘over promising and under delivering’.



Before delving further into the practice of performance management, it is important to highlight the key terms of performance in the public sector, which Talbot (2007) divides into three distinct focuses; Organisational Performance, Activity Programme and Policy Performance and thirdly, Individual Performance. Majority of literature focuses on the first of these, organisation performance. The main reasoning for this is being, accountability and finance structures tend to be built around organisations rather than individuals, making them easier to report and comprehend as everything can be grouped together under the umbrella of the organisation. However, this doesn’t always provide a complete and accurate picture of performance, which is due to several reasons, including the vast amount and scale of and polices organisations are responsible for, in addition to this the under and over performance of individuals in an organisation can have a dramatic effect on results, which can further lead to inaccuracies.

This is where the second option ‘Activity, Programme and Policy Performance’ proves as a useful measure, taking cost benefit analysis into account, considering the costs incurred by an institute through implementing a policy and benefits achieved through the implementation which enables educated decisions to be formed surrounding the feasibility of the policy. Whilst highlight those who are delivering in terms of performance and those are aren’t achieving targets. In contrast to Organisational behaviour, this model can be much more complex, for example if considering mental health in the adultescence there are several different parties which will need to be considered including the doctors providing treating and social services. On the 3rd October 2018 it was announced that Australia will become the first country to effectively eliminate cervical cancer if vaccination and screening rates are maintained. FINISH OFF THIS EXAMPLE

Finally, the third focus is upon Individual Performance which can be monitored by HR, measuring for example how many successful operations has a particular DR carried out.


Elements of Performance

According to Boyne (2010), performance management in the public sector is generally composed of three interconnected elements; performance measurement, target setting and rewards and/or sanctions, these elements enable the public to compare various results and outputs across time. For example, if we look at the education system in the NI, school performance league tables are published to the general public on a yearly basis, which allows for comparisons and benchmarking to take place. These league tables provide parents and prospective students with the data they need to make informed decisions around which schools they would like to send their children to or attend, as well as providing an incentive for those headmasters/teachers ranking in lower positions on the spectrum to improve the their ‘service’ to edge further up the league table. However, this league table has been controversial with the Secondary Heads Association criticising the narrow range of targets as distorting schools’ attention and diverting pupils choice of subjects.

Typically, performance management focuses on factors such as return on investment, profit margins, market share and share holder value. However, factors such as profit are considered more of a means to and end in the public sector rather than a driving factor. Instead, an emphasis is placed upon the purpose of the organisation being managed which is providing some sort of social or economic impact on society, for example in hospitals this may be providing effective treatment around the prevention and treated of illnesses. If we consider the typical approach, factors such as profit margins and market share offer a clear- and clean-cut set of results displaying the success or failure of a business’s performance. However, we do not have this luxury in the public sector, consequently leading to results which are difficult to define.

These results can begin to be defined through considering the quality or quantity of the services delivered, focusing on their efficiency and effectiveness. Measuring the effectiveness of such outputs can be achieved through measuring the cost of producing this output. For example, how much does it cost to perform cataract surgery per patient, if we are in possession of this information we can then begin to make comparisons between operational units and benchmark, meaning we can compare the cost of cataract surgery in The Royal Hospital in comparison to The City Hospital which will give us further insights into the success of the service.

In terms of effectiveness, the emphasis is placed upon the cost of achieving defined outputs or results. For example, what costs are incurred to help a pupil obtain 5 GCSES at A*-C? Although, issues still arise using this method as such results have more than one contributing influence including factors such as household environment and income. If we consider the undeniable link between household income and student performance, there is strong evidence to support that students coming from households with a higher income typically perform better than those from lower income households therefore it would be biased to evaluate outcomes based on effectiveness alone. For example, if we explore the circumstances of a pupil privately educated from a privilege background receiving 5 GCSES grade A*-C, in comparison to a pupil state educated from a deprived area receiving enough qualifications to secure a job. This opens the debate of which educational organisation has achieved more, this is where ‘value’ added comes into play which was introduced to give a more accurate assessment of a schools performance. 

Previously I mentioned that the purpose of public sector organisations is providing some sort of social or economic impact on society. This impact is based upon the programme or organisations outcome – these are events, occurrences or changes in conditions, behaviours or attitudes that arise from the outputs. Rather than focusing on what the programme or organisation did itself, it concentrates on the consequences of what the programme or organisation did. These outcomes can be separated into immediate outcomes and end outcomes, as well as assessing the impact of the environment to fully grasp the ‘full picture’.

In relation to the figure below, AUSTRIALA EXAMPLE CERVICAL CANCER


Figure 5.1 (Flynn and Asquer,2007)

Performance Measurement

According to Van Dooren et all (2010), performance measurement is a five-step process, targeting, indicator selection, data collection, analysis and reporting with quality assurance being reinforced in each of these steps. Each of these steps involved a variety of choices, which should be made based on the envisaged use of performance information.

To put this diagram into context, I will focus upon the type of results which we could achieve through introducing the sugar tax, this is first step of the process ‘targeting’ – identifying what is we are going to measure, in this case the sugar tax.

Second, we have indicator selection – for the purpose of this example this could be reduction in type 2 diabetes or the average weight level in the population. An important point to make here is that these indicators do not take into account other attributing factors including the hereditary aspect which puts into question the reliability and usefulness of the information this will produce.

The third step is data collection, this could be collecting records from the NHS concerning the level of type 2 diabetes, has it increased, decreased or remained at a constant level. Another point to make here I that collecting these resources can be an expensive process, which leads to disputes of the cost effectives of the process.

Analysis is next, this step can be difficult, I previously mentioned contributing factors such as genetics aren’t considered, consequently making it problematic to ascertain a clear link between the policy and the impact it has had. Furthermore, this point draws attention to the issue that reality is not as ‘clean-cut’ as the process suggests.

The final step is reporting, this area considers if the information gathered should be published, can this educate the public? or will this publicise failure of policy which organisations would prefer to ‘brush under the mat’.

Performance Information

Regardless of result, this information only becomes valuable when followed by action and justifiable if used, what is the point in collection the information if no tangible use is made of it? Van Dooren et al (2015 P.120) suggests that this information can be used for three different purposes in policy and management including; to learn, to steer and control and to give account.

Gathering this performance information aids in highlighting what is working and equally as important what is not working. It is vital to consider the ratio of the money you are investing into a policy to the outcomes produced through the policy, if the result is unfavourable the future of the policy is opened for debate; should the policy be scrapped or should it be revised as the information you have gathered can you help you remodel the policy to make it more effective. In recent times, the RHI scheme was scrapped in Northern Ireland due to a £30million shortfall, although this is an example of policy failure, it drew attention to several valuable learnings including that NI needs a long-term strategy for tackling our energy shortfalls, not short-term measures.

Performance information may be collated to monitor goal attainment and enable corrective action if required. It draws into consideration the uses of the information and if it can be used to help shape policy. For example, originally the ban of smoking in public places was a policy that had been left ‘untouched’ until information surfaced that levels of smoking weren’t falling quickly enough, this led to action being taken to implement the previously untouched policy due to the information that had been gathered.

In terms of accountability, this information may be collected to enhance transparency. This is particularly important regarding the NHS and social services, as it makes people accountable for use of public money additionally in a democracy such as the UK it is considered the public’s right to know what they are actually getting for their money.

Performance Reporting

However, performance reporting can be a complex and multifaceted process, with no ‘best practice’ on how to approach it. The UK is said to be one of the most transparent in terms of reporting, unfortunately this can more detrimental than useful as there is such a vast amount of information published, often referred to as ‘information overload’ which can consequently make it difficult for the public to understand. One of the best-known performance reporting frameworks is the Balance Scorecard, which use extends to the private and third sector, reporting against financial, customer, internal process and innovation. This approach calls for so-called strategy maps of the cause-and-effect relationships (Kaplan and Norton 2004; Bovaird 2012). Unsurprisingly, success and failure look significantly different between various stakeholders, for example the public will be concerned with waiting times whilst the hospitals financial managers will be concerned with which practice is most cost effective, the Balance Scorecard considers and represents the different perspectives of the various stakeholders. Furthermore, its purpose is to ensure that different stakeholders’ interests are taken into consideration rather than focusing on one particular party which subsequently aids in producing something that is actually a real benefit to ordinary people.

Evolution of Performance Management

As stated in the beginning of this paper, governments have always been interested in the performance of public service – especially in periods of election, I’d like to explore this further particularly the elements remaining constant throughout. Firstly, individuals should be held accountable for their and their unit’s performance, which was a primary concern of the Financial Initiative in 1982. Secondly, there has been a desire for explicit service standards, such as waiting times – which the NHS have been consistently failing on in recent years, specifically in NI particularly in Belfast. As well as the quality of outcomes, which was made explicit through the Citizens Charter in 1991. Thirdly, prime ministers attempted to gain control through the introduction of special units close to the centre, usually within the cabinet office, for example Tony Blair & the Prime Ministers Delivery Unit or David Cameron & the Implementation Unit. They reflect the frustration that successive Prime Ministers have expressed about their relationship with the public services, particularly the Civil Service, becoming especially important during re-election as they want to show they’ve taken a handle in trying to improve public services. Finally, the reliance on a document outside the normal budget process that sets out performance measures and sometimes also targets against which individuals and units can be held to account. However, from 2010 onwards, there has been a retreat from the attempt of comprehensive performance management, with the introduction of Public Service Agreements which attempted to capture all government activities in a series of hierarchical agreements. As well as business plans concentrating on the government priorities, leaving large amounts of routine work outside the performance management system. Reasoning for this includes that firstly, it is unattractive for politicians to publish a comprehensive set of service standards and indicators of their achievement if they may be moving in the wrong direction, particularly in periods of austerity. For example, last year the NHS very quietly released information throughout the year in an effort to draw minimal attention to their failings across the board. Secondly, with the growth of outsourcing, performance standards and targets are captured in outsourcing agreements.

Arguments for Performance

Performance Management has been a consistently present consideration throughout the history of the government although Talbot (2007) states that a wide range of arguments have been put forward for placing an even greater focus on performance. The first of these is performance as accountability – in order to maintain a functioning democracy its inhabitants need to be given information not just on what is spent on public activities but also what results are achieved, reasoning for this includes that is a democratic right for citizens to have access to information which offers insights into public spending.

This is followed by performance as user choice, where there is not simply a single, monopoly state provider but citizens can make a choice in their relation to which public institution to utilise, then it is argued performance information for help inform their decision. In England Ofsted reports are published, this involves an inspector visiting each individual school which they will then appraise to rate on a scale – this helps parents chose which school to send their children to. However, even if the public don’t have a choice it can encourage organisations to take steps to help them improve, for example which hospital in Northern Ireland we are referred to for treatment.

Performance as customer service is another consideration, arguing that public organisations should make clear statements about the level of service they intend to supply, in terms of timeliness, accessibility and quality, and then report on their success against these aims. These services are funded through public taxation therefore the public have a right to know, furthermore modern society are more discerning, expecting increase access to information with higher expectations on results. During 1980s customer service was highly criticised which led to the introduction of the ‘Charter Mark’ in 1991, a feature of the Citizens Charter initiative introduced under former Prime Minister John Major, which demonstrates a national standard for excellence in customer service in UK public sector organisations. In more recent times this has been replaced by the Customer Service Excellence Standard, which companies often display as a ‘badge of honour’ if results are favourable whilst motivating those with unfavourable results to improve their service.

It is argued that by being in possession of performance information, especially concerning effectives and outcomes is necessary in understanding the utility of resources allocated to any specific policy which enables policy makers to best allocate resources to meet user needs whilst reducing or eliminating wastage.

Government organisations have become too focused on the inputs and processes of administering public policies subsequently losing sight of the outcomes they are intended to achieve. Instead there should be a greater focus on ‘what works’ which can be achieved through performance management. Furthermore, positively addressing how they can create value which could not be made in the private sector, i.e. also focusing on improving quality of life.

Arguments Against Performance

In contrast, it is argued that performance management has not been the predicted success in the public sector.(Fryer.2009)

The scope and scale of the public sector is immense, making it impossible to achieve a complete picture of what is really happening and what is being achieved due to the vast amount of information that would need to be collected. Consequently, the harder we try to retrieve all of this information, the ever more complex the performance measurement system becomes, which can be detrimental in terms of helping us understanding it any more clearly, coincided with the common problem of ‘information overload’. Attempting to gather all this information is also a timely and costly process, how much of nurses and Dr’s time gets caught up doing paper work, when it would be considerably more time and cost effective spending this time on the ‘ground’ treating patients and performing operations.

In addition to this, attribution is another major issue in relation to outcomes of performance. Firstly, have the outputs of public services resulted in desired outcomes, if this is the case, how do we attribute these undoubtedly to the outputs. For example, In the beginning of the year the UK growth rate was lagging at 02%, however in the last quarter growth increased to 0.9%. This was initially attributed to economic policies put in place yet when further investigated the growth was attributed to England’s performance in the world cup alongside the spate of good weather the UK experienced.

It’s no surprise, that manipulation and deception come into play when performance measures are imposed and can lead to rewards or sanctions, in order to present the best possible picture. As previously mentioned, this can be particularly common during times of election, with running mates ‘tarring’ current leaders whilst current leaders will focus on the improvements – this bias can be misleading, clouding voters’ judgements subsequently this can lead to voters being dissatisfied by those who they have voted into government. 

Measuring performance can further lead to distorted behaviours and unintended consequences, in the UK the NHS are measured on specific targets consequently to reach these targets they may start using all resources in this area, at the expense of another area which may be as equally or more important but is not being measured.

The sustainability that is essential in order to achieve effective performance measurement can be not attained in a political environment. This is due to elections, with different parties being nominated who will have different targets, goals and policies – leading to cyclical incompatibility; it is impossible to achieve a clean consistent picture over time.

Finally, Charles Lindblom championed that public systems are dominated by politics which inevitably lead to instability, incrementalism, muddling through, messy compromises and value judgements which fatally undermine all attempts at rational decision making – consequently meaning that we are trying to get a picture of something much more complicated than what we actually understand.


Performance Management Traps

Buockaert and Halligan argue that performance management provides interesting possibilities for enhancing public sector management and policy making, however Van Dooren highlights that there may be several traps. Indicators can be chosen with the reasoning being collecting this particular data is the easiest option consequently this ‘easier solution’ may not give the bigger picture. Indicators can also be selected in order to paint a more favourable picture, for example if they can portray that a particular target has been achieved – this can be referred to as window dressing. Collecting this data can be a time consuming and expensive process, therefore it is important that it is used to shape policies going forward otherwise it becomes a waste of resources. Vagueness and ambiguity of goals further heightens the difficulty in measuring performance, offering


How successful has Performance Management been?

Despite at least three decades of attempts to improve the performance of the public sector, it still remains difficult to determine the level of success of these efforts. The main reasoning for this is due to a lack of clarity, it is problematic to make judgement as we have no evidence on which outcomes would have been achieved in their absence, leaving us with no option but to look at the results without implanting performance improvement in them.

What does the future hold for Performance Management? It is unlikely that performance management will be set aside or forgotten about due to its prominent presence throughout the history of the government, which is more uncertain is how performance management will develop. During previous decades, performance management has evolved through adhoc improvements, there is a lack of confidence that this is best practice with Van Dooren et al (2010) suggesting that this may resolve some of the issues. However, he offers more radical option which includes rethinking the blueprint of performance management in order to better fit with complex environments which in turn could result in a more fruitful process.


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