Lecture on the course "Performance management in public organizations" 2.11.2015.

1. Performance measurement and knowledge
management in public administration
2.11.2015, Part of the course: Performance management in public
organizations
Professor Harri Laihonen
University of Tampere, School of Management

2. How would you define your performance?

3. What did you learn last time?

4. Agenda – three main themes
Introduction
1. Phenomenon – what are we talking about?
2. Performance measurement
3. Use of performance information

5. Do these guys have a different view on performance?
Figure: http://www.nutritiondivision.ie/blog/2015/4/6/stress-ultimate-stress-management-internal-external-thresholds

6. Figure: http://stdaily.ghost.io/d/
Figure: http://balancedlifesa.co.za/a-matter-of-perspective-some-introductory-thoughts-1/

7. From an internal perspective it is about management
control
• “the process of assuring that resources are obtained and
used effectively and efficiently in the accomplishment of
the organization’s objectives” (Anthony, 1965)
• ”the formal, information-based routines and procedures
used by managers to maintain of alter patterns in
organizational activities” (Simons, 1994)
Read more:
Anthony, R.N. (1965), Planning and ControlSystems: A Framework for Analysis, Division of Research, Harvard Business School, Boston, MA.
Simons, R. (1994), "How New Top Managers Use Control Systems as Levers of Strategic Renewal", Strategic Management Journal, Vol. 15(3), pp. 169-189.

8. Types of management
control systems
• Beliefs systems: formal systems
used by top managers to define,
communicate, and reinforce the
basic values, purpose and
direction for the organization
• Boundary systems: formal
systems to establish explicit limits
and rules which must be
respected.
• Diagnostic systems: formal
feedback systems to monitor
organizational outcomes and
correct deviations from preset
standards of performance.
• Interactive control systems:
formal systems used to regularly
and personally involve themselves
in the decision activities of
subordinates.
Read more:
Simons, R. (1994), "How New Top Managers Use Control Systems as Levers of Strategic Renewal", Strategic Management Journal, Vol. 15(3), pp. 169-189.

9. Jones, R. & Pendlebury, M. (1992) Public Sector Accounting. Pitman Publishing: London.

10. Performance management
• “a system that generates performance information through strategic
planning and performance measurement routines and that connects
this information to decision venues, where the information is
expected to influence a range of possible decisions”.
Moynihan, D.P. (2008), The Dynamics of Performance Management: Constructing Informationand Reform.
Washington, D.C.: GeorgetownUniversity Press. (availableas e-book)
Personal
Team
Organization
Service chains
Service systems
Ecosystems
Networks

11. Aims of my presentation
1. To consider what is performance; in general and in
case of public administration
2. To understand how the key determinants of
performance can be managed
3. To discuss what information is needed to manage
performance
4. To discuss what we should do with all the performance
information

12. Figure: http://businessmanagementsystems.blogspot.fi/2010/10/contingency-theory-of-management.html
Future of performance
measurement

13. Bititci, U., Garengo, P., Dörfler, V. and Nudurupati, S. (2012),”Performance measurement: challenges for tomorrow”,
International Journal of Management Reviews, Vol. 14, No. 3, pp. 305-327.

14. Amabile, T. M., & Kramer, S. J. (2007) “Inner work life”, Harvard Business Review, Vol. 85, No. 5, pp. 72-83.

15. Performance as a phenomenon evolves; or is the
change in our heads?
1. Customers’ role is changing
2. Focus is moving from structures to value creation -
service processes and impacts
3. New ways of working; work changes
4. Knowledge worker is both seen and treated as an
'asset' rather than a 'cost’

16. Does the measurement
keep up?
Kuva: http://www.foresee.com/common-measurement-mistakes-volume-2/

18. Basic measurement problems
1. Measurement assumes that organizations/institutions
operate as separate entities (only)
2. Focus is on indicators and measures
3. Familiarity and safety guides the measurement
4. If the results do not get better, we measure more

19. Are we doing the right things?
Are we doing things right?

20. It all begings from the objectives
• Business vision
• Performance gap
• Knowledge gap
• KM initiatives
Ferreira, A. and Otley, D. (2009) The design and use of performance management
systems: An extended frameworkfor analysis, Management Accounting Research,
20(4), 263-282,
Zack, M. (1999), “Developinga knowledge strategy”, California Management
Review, Vol. 41, pp. 125-45.

21. Where are we now?
Where we want to go?
Hard work!
Communication!
Testing and learning!
Reporting!
Feedback!
Objectives!
Re-testing and re-learning!

22. Behn, R.D. 2003. Why measure performance? Different purposes require different measures. Public Administration Review 63: 586-606.

23. Change in
environment
Management
control
challenged
Use of
performance
information
Learning
Performance
improve-
ment?
Control vs.
learning
Organizations vs.
Service systems
Control
Budget
Celebrate
Motivate
Promote
Evaluate
Behn, 2003
Research gap!?

24. Knowledge-based performance management
Public strategic management
Management control
Performance information

25. A call for performance dialogue
Performance data Learning forum Dialogue outcome Impact on performance
Read more:
Moynihan, D.P. (2005), "Goal-based learning and the future of performance management", PublicAdministration Review, 65(2), pp. 203-216.
Moynihan, D.P. (2008), The Dynamics of Performance Management: Constructing Information and Reform. Washington, D.C.: Georgetown
University Press.

26. What we discussed about
• In order to manage performance:
1. You need to understand and define what is performance
in the given context
2. You need to recognize the key value drivers leading to
performance (and define objectives)
3. You need to specify what information is needed to
manage performance (feedback)
4. You need to act based on performance information

27. Understanding the
phenomenon:
what is performance?
Management
ideals and approaches:
how to manage
performance and the
key value drivers?
Management tools:
how to gather
information about
the phenomena? how
to use information?
Management
challenges
of the knowledge
and service society