Sunday April 21, 2024

Measuring performance

By Mian Salimuddin
May 17, 2018

At no time in our chequered history have the federal and provincial governments been under greater pressure to provide results that matter to the public, often within severe resource constraints.

Ministers and government officials are challenged at every forum to overcome the public’s lack of trust in the government. A large number of government and semi-government departments appear to be in turmoil ever since their performance has been under public scrutiny. Though the action was long overdue, I am afraid it’s more like bolting the barn door after the horse has bolted. Most of the siphoned off money is irrecoverable, time has been wasted and people have been denied the benefits for which their money was allocated to these departments.

The above situation would not have arisen if a performance measurement system had been enforced by the government. Practically, all governments in Pakistan in the last three decades have made efforts to introduce performance measurement in government departments, but all these endeavours have failed, because all such efforts suffered from a basic but fatal flaw. According to management gurus, running a government without a performance measurement system is like “driving a car by watching the rear view mirror only”.

The modern concept of performance measurement was the brainchild of Margaret Thatcher when she took office in 1979. Thatcher thought the bureaucracy was bloated, cumbersome, lethargic and insensitive to public needs. This attitude was considered to be largely responsible for the economic woes of Britain. Based on these ideas, she launched a crusade against waste and inefficiency which resulted in creation of public service standards.

Across the Atlantic, President Reagan – convinced that the American civil service was unwieldy, inefficient and cost too much to run – initiated massive reforms. These reforms were taken to the next level by President Clinton when he took over in 1993. One of Clinton’s first acts after taking oath as president was to order a National Performance Review (NPR) led by the then, vice president, Al Gore. This review culminated in the Government Performance and Results Act 1993 (GPRA). The GPRA required all government departments and agencies to establish goals and performance measures, which were to be published and made accessible to the public. By 1994, two hundred government departments had created first ever customer service standards. Today, of course, it’s a regular feature of the US civil service, where annual funding is subject to audit of performance measurement results.

Malaysia also has a very well-known Government Performance Management Delivery Unit (PEMANDU), located in the Prime Minister’s Secretariat. There is hardly any minister or a high official from Pakistan who has not gone on a ‘study tour’ of this excellent performance measurement system. The results of such ‘study tours’ are not known.

Civilised societies cannot exist without effective governments. The efficiency of the government sets an upper limit on the efficiency of the market system. To compete in the world today, it is not enough to reform the market system; one must also reform the overall working of the government. In other words, markets work where governments work.

While bureaucratic processes focus on preventing bad things from happening, performance measurement adds a focus on assuring that the government actually produces positive results. Management based on performance measurement has now become the new standard for the public sector.

Performance measurement leads to the comparison of actual performance with agreed standards. This in turn helps managers understand the extent to which performance is deviating from the expected results. This then provides early detection and warning of performance trends, uncovering actual and latent problems.

In Pakistan, whenever the subject of performance measurement is broached with senior government officials, a number of objections are immediately raised. The first of these is that government departments have their constitutional and political validity and will continue to get their annual budgets to a large extent, based on the necessity of the department’s charter. If the departments have the right to exist and get their annual budgets irrespective of their performance, then what is the need for performance measurement?

For example, if the police force and revenue collection or health departments have poor performance will the budgets for these departments be cut? This is unlikely; probably the opposite will occur as more funds will be made available for hiring, training and equipment etc.

Furthermore, each department has a unique function to perform. So what good will performance measurement be? There can be no comparison or bench marking with any other department. Finally, according to another senior bureaucrat, performance measurement concepts are only applicable to the private sector where measurements are needed for issues of competitiveness, profits, growth, market share etc. Government departments have no such issues as they operate in a competition free environment; why bother about performance measurement?

From the above discussion, it sounds as if the whole concept of performance measurement in government is flawed. Departments will continue to exist and budgets will be allocated irrespective of their performance. Where is the need for performance measurements?

All departments exist not for profit, but to fulfil their charter or mission which is inherently a government function. Departments have the authority to conduct their mission which is delegated by the government. Hence, unlike the private sector businesses that can change in any way they please, government departments are constrained to work within their functional or authorized missions.

The key metric for a government department’s performance, therefore, is not financial but rather mission effectiveness. So there is an important role for performance measurement in government, but it is not based on the strategic goals of the private sector viz competitiveness. In the government sector, strategic goals translate into mission or charter effectiveness, cost reduction, efficiency, accountability to public, integrity, fairness etc.

Thus in government departments the focus of performance measurement is on the effectiveness and efficiency of the department’s authorised work. ‘Performance’ in this context means how well the department is doing with respect to its charter.

In government departments, performance measurement is thus needed for a number of reasons: to ensure that customer requirements have been met; to create standards for comparisons; to provide visibility for people working in the departments to monitor their own performance; and to evolve a feedback system to drive the improvement efforts.

To put it very simply, we need performance measurement in government departments to track and improve their progress towards the outcomes they seek to achieve.

Democratic governments are obliged to be accountable to their owners – citizens. Performance measurement principles and practices give governments the ability to provide easily understood and timely information to the public, so that citizens can assess the results their governments are producing. Public-sector management must, therefore, become synonymous with performance measurement. Accomplishing this will require political and public-sector leaders to not only set high expectations for performance, but also make a commitment to improving results by legislating and reviewing performance measurement in government departments. Unless we do that, 12 billion rupees per day (according to NAB) will continue to go down the drain due to inefficiencies, corruption and procrastination in government departments. Performance measurement is a very potent and predictive tool to point out delays, deviations and non conformances in government departments.

On the flip side, performance deficit could be even more lethal than fiscal deficit. It is more devastating than any known virus as it can convert any surplus into a deficit and plunge the country into a bottomless pit of debt – as it has already done in Pakistan.