M. Jae MoonDepartment of Public Administration

Yonsei University

Performance Management in Asia

OutlineBackgroundPerformance ManagementIssues (levels, actors, tools, and processes)Comparative Asian Performance ManagementOpportunities and ChallengesConclusions

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

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).

Performance ManagementKey Issues in Public Administration

GovernanceAccountabilityPerformance

Diffusion of Performance ManagementManagement by ObjectivesLogic ModelBalanced ScoresZBBPerformance Budgeting

Why Performance?GPRA?

Performance versus Result?

Monitoring and AccountabilityNarrowing Information Gap between Legislative and Executive Branch or Managers and SubordinatesInstitutional Design: Quality and Incentive Structure Cascading Approach

Mission-Goals-Objectives-Measurable TargetsSystem-Government-Agency-Bureau-Team/Group-Individual

3E’s model

Economy

Efficiency

Effectiveness

Costs of procuring services

Technical efficiencyAllocative efficiency

Achievement offormal serviceobjectives

IOO model

Quantity of serviceQuality of service

EffectivenessImpactEquity/fairness

ExpenditureStaffingEquipment

Efficiency

Inputs Outputs Outcomes

Cost per unit of outcome/value for money

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?

Levels of PerformanceIndividual Performance

job appraisalTeam/Group Performance

Group evaluation/ 360 degree evaluationOrganizational/Agency Performance

Satisfaction survey, quality/quantityGovernment Performance

Government effectivenessNational System Performance

Governance indicators, competitiveness index

Dimensions of Organizational Performance (Boyne, 2002)

Performance Domain

Sub-performance domain

Outputs Quantity, Quality

Efficiency Cost per unit of output

Service Outcomes Equity, Formal effectiveness, impact, value for money (cost per unit of service outcome)

Responsiveness Citizen satisfaction, consumer satisfaction, staff satisfaction

Governance Accountability, civil rights, human rights, probity

Governance Indicators (World Bank)Governance Dimensions Contents

Voice and Accountability the extent of free and independence of media as well as democratic political process, civil liberties, and political rights

Political stability and absence of violence

various perceptual measures reflecting “the likelihood that the government in power will be destabilized or overthrown by possibly unconstitutional and/or violent means

Government effectiveness

The quality of public service provisionThe quality of the bureaucracyThe competence of civil servantsThe independence of the civil service from political pressuresThe credibility of the government’s commitment to policies

Regulatory quality Measures of the incidence of market-unfriendly policies such as price controls or inadequate bank supervision

Perceptions of the burdens imposed by excessive regulation

Rule of law 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

Control of corruption Perceptions of corruption

Governance Indicators: Selected Asian Countries

Country Voice/

Accountability

Political

Stability

Government

Effectiveness

Regulatory

Quality

Rule of Law Control of

Corruption

Japan 76 79.4 89.1 86.5 89.5 85.5

China 5.8 33.5 63.5 46.4 45 41.1

Hong

Kong60.6 86.1 95.3 100 90.9 94.2

Indonesia 44.2 15.8 47.4 45.4 28.7 31.4

Korea 65.4 59.8 86.3 72.9 74.2 69.9

Malaysia 31.7 50.2 83.9 60.4 64.6 62.8

Philippines41.3 10.5 55 51.7 39.7 26.1

Singapore 35.1 96.2 100 99.5 93.8 99.5

Taiwan 68.8 71.8 79.1 81.6 73.7 72.9

Thailand 32.2 12.9 58.8 59.9 54.1 43

Vietnam 6.7 56.5 45.5 32.4 41.6 25.1

Country Voice and

Accountability

Political

Stability

Government

Effectiveness

Regulatory

Quality

Rule of Law Control of

Corruption

OECD 90.6 81.9 88.7 91.2 90.2 90.2

Latin America 52.1 35 44.8 48.3 33.1 44.1

South Asia 30 19.5 35.6 29.2 36.6 34

Eastern

Europe&Baltics63.3 56.1 61.3 69.2 58.5 59.1

Eastern Asia 49.9 59.4 46.5 42.1 52.9 45.1

Middle East &

North Africa23.7 37.3 46.7 46.3 49.4 48.3

Subsaharan

Africa32.6 33.5 26.3 28.9 28.6 30.8

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

Performance Management Tools

Level of Performance Performance Management tools and techniques

Individual Job Performance 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 360 Degree Evaluation

Agency Performance Balanced Score Card (Finance, Customers, Business Process, and Learning and Growth)

Job Appraisal In Korea

Grade S

20%

A

20-50%

B

50-90%

C

10%

PFP 230% 160% Below 90% 0%

Overestimation of PerformanceModel 1

Service performance overestimation

Model 2Consumer satisfaction

overestimationIndependent variable ß se ß seConstant 31.49 22.22 47.12 49.86Environmental factorsPopulation (log) -15.20** 3.05 -16.99* 6.76Population density (log) -3.72** 1.28 -5.94* 3.03Deprivation -.05 .07 .03 .16

Management factorsTarget-setting 5.22** 1.32 5.62+ 3.08Benchmarking -.48 1.00 1.57 2.24Partnership 2.66+ 1.56 2.97 3.51User consultation 4.31** 1.20 3.84 2.81

F statistic 8.92** 2.32*R2 .56 .25N= 58 58

Levels and Performance Management Tools (Korea)

Level of Performance Performance Management Tools

Individual Job Performance Management by ObjectivesJob Appraisal for low and middle managersPerformance agreement system (PAS)for high ranking officialsBalanced Score Card System360 Degree Evaluation by managers, colleagues, subordinates, and customersIndividual Performance=Job Appraisal (70%)+360 Degree Evaluation (30%)

Team Performance 360 Degree Evaluation

Agency Performance Balanced Scorecard

On-nara System

On-nara System

IT-enabled Performance Management System in Korea

Customer Management SystemEstablishment & automation of

services workflowReal time reflection of customer’s

opinions in performance

Government Work Management SystemReal-time handling & management of

major policy tasks and jobsQuantitative & qualitative evaluation of

outcomes and reflection of evaluation results in performance

Performance Management SystemDevelopment of core performance

indices for achievement of strategic goals in light of BSC

Routine monitoring for real-time evaluation of performance

Rewarding SystemDepartmental & individual

performance evalution, 360-degree appraisal system, and time-series analysis

Reflection of analysis results in personnel management and rewarding

Integrated Administrative Innovation ‘System

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 CountriesKorea and Japan (US, Canada, UK)Thailand (UK, Australia)

Modeling Performance Management USA Canada Australia Singapore Malaysia UK New Zealand UNDP

Korea ✔ ✔

China

Vietnam ✔

Philippines ✔ ✔ ✔

Japan ✔ ✔ ✔

Indonesia ✔

Cambodia

Thailand ✔ ✔ ✔ ✔

Malaysia

Locus of Performance ManagementLevel

local regional central all levels Other

Korea ✔

China

Vietnam ✔

Philippines ✔

Japan ✔

Indonesia ✔

Cambodia ✔

Thailand ✔

Malaysia ✔

Key Driving Actors for Performance Management

0 2 4 6 8 10

Specialcommittee

Parliament

Civil society

President/ PrimeMinister

Civil servants

Key actors drivingperformancemanagement

Approaches to Performance Management

0 1 2 3 4 5 6

Bottom up

Neither/ Both

Top down

approach toperformancemanagement

Levels of PerformanceSystem 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

Comparative Asian Performance Management

PM at the central government: Cambodia, Japan, Korea, and ThailandPM at the local governments: China, VietnamCentralized PM: Indonesia and CambodiaDecentralized PM (More autonomy at the agency level): Korea, Thailand, Philippines

Dimensions of Performance

8888

5 5

4

43

2

0 2 4 6 8Quality

Quantity

Efficiency

Effectiveness

Citizen Satisfaction

Accountability

Value for money

Impact

Staff satisfaction

Probity

Dimensions ofperformance

Performance Management ToolsCountry Performance Management Tools Adopted

Cambodia JPA, LM, PFP

Malaysia JPA, LM, QC, PFP, SM, PBIndonesia BSC, JPA, LM, SM, PB

Japan LM

Korea BSC, JPA, LM, PFP

Philippines JPA, LM, PB

Thailand JPA, LM, QC, PFP, SM, PB

BSC: Balanced Scorecards, JPA: Job Performance Agreement, PFP: Pay for Performance, LM: Logic Model, SM: Strategic ManagementPB: Performance Budgeting, QC: Quality Circle

Major Challenges in Performance Management

Bureaucratic resistance: 5.75Lack of financial resource: 4.5Lack of political leader’s support: 4.0Lack of citizen support: 3.62

Major ChallengesKorea (bureaucratic resistance, lack of financial supportIndonesia (lack of political leader’s support)Cambodia (lack of financial support)Thailand (bureaucratic resistance

ConclusionGood to Great (Jim Collins)-BreakthroughMeasurement ChallengesManagement ChallengesPerformance and Incentives Internal and External EnvironmentFrom Performance Management to Integrated IT-enabled Performance Management System

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?

Comparative StudiesHistorical 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?

Behn’s Performance Leadership: 11 better practices (2004)

Creating performance frameworkArticulate the organization’s missionIdentify organization’s most consequential performance deficitEstablish a specific performance targetClarify your theoretical link between target and mission

Driving performance improvementMonitor and report progress frequentlyBuild operational capacityTake advantage of small wins to reward successCreate esteem opportunity

Learning to enhance performanceCheck for distortions and mission accomplishmentAnalyze a large number and a wide variety of indicatorsAdjust mission, target, theory, monitoring and reporting, operational capacity, rewards, esteem opportunity, and/or analysis

What Can Be Done?

Things To Be Avoided…

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