PA 412: Performance Management Theory and Practice

Module 2: Historical and Dominant Perspectives, Role of Management in Performance

Management

Asst. Prof. Aaqib Zahid Department of Public Administration,

University of Dhaka
Roadmap and Recommended Readings

• A Historical Perspective on
Performance Management
• Role and Challenges of Different
Management Levels in Managing
Performance
• Dominant Perspectives (Political,
Economic, Institutional) on
Performance Management
A Historical Perspective on Performance Management

• The concept of Performance Management can be traced back to the 1920s. The first
formal monitoring systems evolved out of the work of Frederick Taylor and his followers
(popularly known as Taylorism or Scientific Management) before the First World War
(Armstrong, 2009).
• Scientific management was based on the ideas of: 1) rationality (applicability of the rule
of reason); 2) planning (forward projection of needs and objectives); 3) specialization (of
materials, tools and machines, products, workers and organizations); 4) quantitative
measurement (applied as far as possible to all elements of operations); 5) one best way
of doing (there is one single best method, tool, material and type of worker) and 6)
standard and standardization (the ‘one best’, once discovered, must be made the
standard) (Dooren et al., 2010).
A Historical Perspective on Performance Management

• From a paradigmatic standpoint, Weberian bureaucracy emphasized process rather than

outcomes, and its two key governance mechanisms are hierarchy and formal rules (Leisink et al.,
2021).
• New public management (NPM), however, emphasizes incentives, market mechanisms, customer
focus, and managerial discretion, based upon private sector practices. Thus, from a performance
perspective, NPM emphasizes efficient service delivery and places a strong focus on user/customer
satisfaction (Leisink et al., 2021).

• In the 1980s, fiscal hardship led to considerable pressure on government, which was reinforced by
the ascent of New Right ideologies. A number of countries, notably New Zealand, Australia and
the UK, responded to this pressure by experimentation with managerial approaches. In the 1980s,
savings were the prime focus (Dooren et al., 2010).
A Historical Perspective on Performance Management

• Managerialism in the 1980s resulted in a diffuse set of management reforms that spread
globally in the 1990s and became known as the New Public Management (NPM) (Dooren
et al., 2010)
• New Public Management, however, was initially derided by many OECD members
(generally those who had not accepted its precepts), the take-up of NPM elements that
involves performance (much less so market aspects) has spread almost universally across
Europe (Curristine & Flynn, 2013). While NPM has been partly superseded in first
generation countries, performance management has been further institutionalized in
countries such as Australia and the United Kingdom. The language of NPM has become
more prevalent now in late reforming countries (Dooren et al., 2010).
A Historical Perspective on Performance Management

• Dorren et al. (2010) have identified some patterns in the performance

management movements/ paradigmatic shifts. Among many, some key are-
o Performance management has long been used as a political tool to establish
the power of one public entity over another (Dooren, 2010; p.53).
o Performance management models are endorsed and promoted by key
organizations and associations (for example, OECD) (Dooren, 2010; p.54).
o Shifts in the performance management movements influence the curricula of the
universities (Dooren, 2010; p.54).
A Historical Perspective on Performance Management
TAKEAWAYS-
• Performance management has roots in Taylorism.
• Traditional public administration focused on rules and processes.
• NPM shifted the focus to outcomes that developed through later paradigms (such
as New Public Governance and Public Value Paradigms).
• Although some countries initially opposed NPM, it eventually spread throughout
the world.
• Those who did not fully adopt the business principle of NPM at least bought its
performance aspect.
Role and Challenges of Different Management Levels in
Managing Performance
• The management can be divided into four groups, whose commitment to performance management is crucial
to its success: Such as Top Managers, Line Managers, Employees and Human Resources.

Top Managers

• Top managers are visionaries and play the key role in implementing and convincing the other three groups
why performance management is essential for achieving the organization's goals. Thus, they are the key
players in strategic planning.
• The top managers are responsible for developing a high-performance culture through:
o Ensuring a clear sense of mission underpinned by organizational values;
o Creating a clear line of sight between the strategic aims of the organization and those of its departments
and its staff at all levels;
o Defining and communicating expectations to everyone in the shape of goals for success, performance
improvements and core values;
o Informing everyone about the progress towards achieving goals and what needs to be done if
performance is not up to expectations.
 Role and Challenges of Different Management Levels in
Managing Performance
Line Managers

• Line managers are the implementers of the vision of the top management.
• Line managers must ensure that performance management is not a bureaucratic chore or a form
filling exercise at the end of the year, but it is a dialogue between managers and individuals that
continues throughout the year.
• Line managers must be involved in the design and development of performance management
processes to improve their implementation and incorporate ground realities.
• Line managers are thus responsible for dealing with the backlash that might be expected from
employees while implementing performance management, fearing that doing so will destabilize
the status quo.
Role and Challenges of Different Management Levels in
Managing Performance
Employees

• Every employee, from the top to the bottom of an organization, is subject to performance management even
if this is not necessarily a formal process.
• They may be asked to prepare for review meetings formally or take part in 360-degree assessment schemes
(we will learn about this very soon).
• Employees will participate in objective setting and discussing roles and competence requirements. They need
to be briefed and, often, trained in all these activities.

Human Resource Department

• HR work alongside line managers, helping them as necessary to develop their skills and encouraging their use.
• More specifically, they run training events and conduct surveys to evaluate the effectiveness of performance
management.
• In essence, HR specialists exist to support performance management rather than to drive it.
Role and Challenges of Different Management Levels in
Managing Performance
TAKEAWAY-

Top managers are the visionaries, line managers are the implementers, employees
are the participants, and HR is the facilitator.
 Dominant Perspectives (Political, Economic, Institutional) on
Performance Management
• Performance management can be analyzed from different perspectives. However,
three perspectives or lenses provide a clear insight into its rationale and
functioning.
• These three dominant perspectives are- economic, social and institutional.
• If seen closely, the amalgamation of these three perspectives overlap with all the
possible perspectives.
Economic Perspectives on Performance Management
• From an economic perspective, performance management (in terms of a public organization) refers to
achieving efficiency and effectiveness.
• Efficiency and effectiveness are determined through input, output and outcome.
• Input refers to the resources consumed in producing outputs.
• Outputs are the end results of the production process.
• Outcome is the broader achievement of result in the long term.
• Efficiency is typically referred to as how well an organization uses its resources in relation to outputs or in
other words, the ratio of output to input”. The focus is on “doing the things right (Scales, 1997; Randor and
Barnes, 2007).
• Simply, efficiency is doing things with the least amount of resources wasted.
• The effectiveness factor is the relationship of goods or services produced as measured against a pre-
established and appropriate standard (Pursley and Snortland, 1980).
• Simply, effectiveness is successfully achieving the intended goals or results, even if it requires more resources.
 Political Perspectives on Performance Management

• Performance management is a political agenda for reform and redistribution of power, and its
success depends upon the nature of the polity.
• Democracy is most suitable for public performance management. Under democratic rule, citizens
can have a voice in decision-making or represent public interests through various participatory
mechanisms, ensuring accountability, responsiveness, and quality of service. Moreover, the rule of
law in democracies provides a reliable set of legal institutions that give citizens and the market the
guidelines to perform their functions.
• In other words, accountability and transparency are essential for effective performance
management, and in turn, good performance management strengthens accountability and
transparency in public affairs.
 Institutional Perspectives on Performance Management

• Institutional perspective drives and unpacks the nature of strategic planning and its outcome for an
organization.
• Specifically, Institutional values (such as equity, transparency or fairness) are those that signify why
an organization does what it does, particularly in the course of clarifying its mission, directing its
future (vision), selecting the right strategies.
• Institutional capacity and organizational behaviour determine its output. The capacity and
behaviour may include the organization's resources, funding, culture, workflow. Institutional
perspective of performance management helps assess and improve these factors for enhanced
performance.
 Institutional Perspectives on Performance Management
TAKEAWAY

Economic perspective deals with effectiveness and efficiency, political perspective

deals with accountability and transparency, and institutional perspective deals with
values and capacity.
 Linking Performance Management with Associated Terms
• Performance Management vs. Performance Appraisal: Performance management covers the
broader spectrum of management, or the whole gamut of running an organization's affairs as a
continuous process. In contrast, performance appraisal is a retrospective process that provides an
authentic picture of an individual’s/group’s performance (weaknesses and strengths for further
improvement) in comparison to a predetermined and well-communicated standard. While
Performance management covers the whole gamut, performance appraisal forms a part of
management.
• Performance Management vs. Program Evaluation: Performance Management is a broader issue
that encompasses individuals, organizations, agencies, and even the government, whereas program
evaluation is one of many activities of an organization and is treated individually. In other words,
performance management can be applied to individuals, but program evaluation is concerned with
the program's performance itself.
 Linking Performance Management with Associated Terms

• Performance Management vs. Project Management: Performance management

is concerned about the way how an organization runs and its personnel and
resources are managed. On the contrary, project management is concerned with
the project in hand. It continues as long as the project runs. It is time bound which is
not the case with performance management. Project management is concerned
only with the project people, while performance management aims at improving
the capacity of each and every individual of the organization.
Cheers!