The Big Question for Performance Management: Why Do Managers Use Performance Information?
Moynihan, Donald P., Pandey, Sanjay K. (2010). The Big Question for PerformanceManagement: Why Do Managers Use Performance Information?, The Journal of Public Administration Research and Theory, March 2010, 18p.
We propose a slightly different question, which we believe is another big question for public management, and perhaps the biggest question for performance management: why do managers use performance information?
Performance information use is important not just to students of administrative reform but can also inform scholarship on public policy, network theory, principal agent theory, and other areas of cross-disciplinary interest.
The ultimate test of our performance management efforts is whether or not the information is used.
Zients, 2009 (President Obama’s Chief Performance Officer)
A Model of Performance Information Use
Heinrich (1999) noted that most empirical evidence came from the private sector. Her study of performance standards in job training found that data were used but much depended upon the design of the overall performance system and that there was little to guide designers beyond neoclassical economic arguments for financial incentives.
Moynihan and Landuyt (2009) characterized performance information use as an element of organizational learning and identified structural and cultural variables that predict such use.
- the provision of adequate resources has been consistently found to be associated with performance information use (Askim, Johnsen, and Christophersen, 2008; de Lancer Julnes and Holzer, 2001; Moynihan and Landuyt, 2009).
- The existence of dedicated learning forums is also associated with use (Askim, Johnsen, and Christophersen, 2008; Moynihan and Landuyt, 2009).
- Evidence from US state governments and Norwegian municipal governments associates performance information use with more liberal political settings (Askim, Johnsen, and Christophersen, 2008; Bourdeaux and Chikoto, 2008; Moynihan and Ingraham, 2004).
- Political competition (Askim, Johnsen, and Christophersen, 2008) has been found to be positively associated with use, although other models have not found significant results (Moynihan and Ingraham, 2004), and in some instances, political conflict has been shown to have a negative or non-significant effect (Dull, 2009).
- The presence of basic bureaucratic competence and expertise in performance management is associated with use (Bourdeaux and Chikoto. 2008; Dull, 2009).
- Measures of legislative involvement vary in their influence on use among executive branch officials, ranging from positive (Bourdeaux and Chikoto, 2008), negative (Moynihan and Ingraham, 2004), to nonsignificant (Dull, 2009).
- Further positives:
- administrative stability(Askim, Johnsen, and Christophersen, 2008)
- internal requirements and lower levels of government (de Lancer Julnes and Holzer, 2001)
- inclusion of organizational members in performance management processes (Melkers and Willoughby, 2005)
- chief executive power (Bourdeaux and Chikoto, 2008).
- Further negatives:
- efforts by the central agency to control the policy agenda (Moynihan and Ingraham, 2004)
- measurement challenges (Dull, 2009).
Conceptualizing Performance Information Use as Organizational Behavior
Employees have discretion about whether and the degree to which they engage in it but are influenced by the social context and formal systems in which they work.
There is significant evidence that altruistic beliefs affect public employee behavior in ways that benefit the organization.
Much of this evidence falls under the rubric of the Public Service Motivation (PSM) concept (see Perry and Hondeghem, 2008).
H1: Managers with higher levels of PSM are more likely to use performance information.
Organizations do not reward performance information use but do reward individualized performance to varying degrees. If individuals perceive that their organization links pay and promotion with goal achievement, employees have an extrinsic incentive to use performance information (Jennings and Haist 2006).
H2: Managers who perceive a link between extrinsic rewards and performance are more likely to use performance information.
Both qualitative (Radin, 2006) and quantitative (Askim, Johnsen, and Christophersen, 2008; Dull, 2009) research report that variation in the use of performance data depends upon the type of program an employee worked in.
There are good reasons to believe that leaders with more general responsibilities are less likely to use performance information than those with task-specific responsibilities.
- A leadership role requires dealing with external stakeholders and political negotiation. This leaves less time for management activities.
- The more senior the leader, the less specialized the knowledge.
Generalist leaders lack a sense of context to interpret performance information—they struggle to know why performance is good or bad or what to do about it.
H3: Task-specific leaders are more likely to use performance information than generalist leaders.
Managers rarely learn directly from quantitative numbers,but from interpreting these numbers, making sense of what they mean given their knowledge of the context in which they work. Individuals with a deep knowledge of task are therefore advantaged in the ability to apply performance data.
H4: Managers with greater task-specific experience are more likely to use performance information.
Ammons and Rivenbark (2008) point out that it is not only the existence of measures but also the ability to tie these measures to management systems that fosters use.
H5: Managers who perceive performance information is available and tied to management systems are more likely to use it.
Managers must want to use performance data.
- Case research illustrates the importance of building an organizational culture that is supportive of performance information use (e.g., Broadnax and Conway, 2001; Franklin, 2000).
- Yang and Hsieh (2006) find that organizational support for performance measurement is correlated with perceptions that it is effective.
- There is also evidence that goal or mission orientation is associated with performance information use (de Lancer, Julnes and Holzer, 2001; Moynihan and Landuyt, 2009).
Developmental cultures are associated with a focus on the organization, flexibility, adaptability and readiness, growth,andresource acquisition (Quinn and Rohrbaugh, 1981;Zammuto and Krakower, 1991; Pandey,Coursey, and Moynihan, 2007).
Developmental cultures correlate with self-reported measuresof organizational effectiveness (Moynihan and Pandey, 2005), although de Lancer Julnes and Holzer (2001) found that a similar measure of organizational culture was not associated with performance information use among their respondents.
H6: A developmental organizational culture fosters performance information use.
If managers have the freedom to experiment with processes, they have an incentive to examine performance data to find rationales for innovation.
If managers are restricted in their ability to pursue process change, insights derived from examining performance data are less likely to be useful, and therefore, the incentive to use data are reduced.
H7: Managers who perceive decision flexibility are more likely to use performance information.
Some reforms, such as the ‘‘stat’’ model (Behn, 2007), or the Program Assessment Rating Tool (Moynihan, 2008), are based on the logic that the performance that agencies made must be challenged if performance data are to be taken seriously. From this perspective, an adversarial dialogue fosters use. A contrary perspective is that an adversarial exchange can devolve into a ‘‘gotcha’’ approach, fostering defensiveness and even gaming (de Haven-Smith and Jenne, 2006).
H9: The willingness of budget staff to adopt an adversarial stance affects performance information use.
Yang and Hsieh (2006) find that stakeholder participation is a positive predictor of the perceived effectiveness of performance measures.
H11: Managers influenced by professional organizations are more likely to use performance information.
|Marginal Effects||p Score|
|Public service motivation||0.038||0.001|
|Budget staff take adversarial role||0.023||0.338|