Session 5: Session 5: Motivating Organizations & Motivating - PowerPoint PPT Presentation

Session 5: Session 5: Motivating Organizations & Motivating Organizations & Their Staff to Perform Their Staff to Perform Presented to: Presented by: World Bank Staff Graham Scott PREM Knowledge & Learning Week Washington, DC April 17-19, 2007 The World Bank

Outline � Some thoughts on motivation � Trends in performance management of public organisations � The New Zealand case � Lessons and challenges from experience � Developing and transition countries � Applying these lessons in the WBG � Public sector performance issues in developing countries Graham Scott Page 2 Civil Service Reform Course The World Bank

Some thoughts on motivation � Motive: “That which incites to action” � The principles by which actions become aligned with organisational purpose? � Managerial � Psychological � Sociological or cultural � The late 20 th century synthesis (contradiction?) � Governance/ accountability for results/ transparency/devolution/ empowerment/ citizen- client focus/ cultural change Graham Scott Page 3 Civil Service Reform Course The World Bank

Broad Trends in Public Sector Management since the 1980s � Governance 1. Transparency 2. Accountability 3. Professionalism 4. Ethics � Strategic planning � Setting high level goals and themes � Linkages to multi-year fiscal frameworks � Control 1. From control of inputs to outputs 2. From pre-audit to post-audit 3. From external control to internal control 4. From external audit to internal audit Graham Scott Page 4 Civil Service Reform Course The World Bank

Trends (cont.) � Reporting 1. From cash to accrual/ GAAP/ GFS/ whole of govt. reporting 2. Contingent liabilities and risk � Systems: Towards integrated performance management � Shrinking the role of the government State owned enterprises – Independent agencies – Contracting out – Fiscal neutrality between public and private sectors – Privatisation – Redefine the role of the centre – Graham Scott Page 5 Civil Service Reform Course The World Bank

Performance budgeting & information � Link services to costs in traditional budget method and use performance information for budgeting: � Other uses of performance information 1. Measurement & assessment of performance - US: PART 2. Setting performance targets 3. Auditing 4. Expenditure analysis 5. Performance contracting 6. Policy analysis and review Graham Scott Page 6 Civil Service Reform Course The World Bank

Trends (cont.) � Performance through managerialism 1. Delegating authority to managers 2. Defining performance 3. Specifying or negotiating performance agreements within comprehensive business plans 4. Allocating budget to performance targets 5. Reporting against targets 6. Performance based HR contracts with incentives 7. Performance auditing and evaluation � “New paradigm” performance improvement Graham Scott Page 7 Civil Service Reform Course The World Bank

Civil service reform for improved performance � Letting managers manage � Specifying accountability for performance � Pay reform – sometimes performance related � Greater differentiation of employment conditions � Promotion more linked to performance over seniority and credentials � Putting functions in non-civil service institutional settings: Contracting, outsourcing, corporatisation, autonomous agencies Graham Scott Page 8 Civil Service Reform Course The World Bank

Aligning strategy, budget, HR and accountability for performance Why alignment matters • Defining performance • What if you can’t? • Whose job is it? Keeping roles clear. • Risks of mis-specification • The holy grail of managing for ‘outcomes’ • The attribution problem • Engaging clients and complementary service providers • Being clear about your role and contribution • Responding to disappointing performance • � You can’t punish the client Graham Scott Page 9 Civil Service Reform Course The World Bank

Counter-currents � The vision was integrated performance oriented, transparent, empowered and accountable public management � The reality was: � Generally short of the rhetoric � Reversals in some developed countries � Movements against the trends in some developing and transition countries � Centralising treasury controls � Formalising the civil service � Debates over the sequencing of reforms continue today Graham Scott Page 10 Civil Service Reform Course The World Bank

Public Management Reform in New Zealand The World Bank

New Zealand: Components of the reform � State-owned Enterprise Reform & Privatization � Structural re-organization of government institutions � Civil service reform � Budget reform � Results-based management � Semi-autonomous agencies framework � Fiscal transparency and responsibility � Policy coordination and strategic management � Ethics and standards � All based in law Graham Scott Page 12 Civil Service Reform Course The World Bank

New Zealand: Performance management � For ministries and independent agencies 1. Multi year fiscal planning 2. Annual business plans and strategic plans 3. Output based budgets link plans to budget allocations 4. Performance monitoring by Finance Ministry and central personnel agency 5. Baseline expenditure reviews to assess output prices 6. New policy allocations in accordance with strategy 7. 5-year performance based contracts for chief executives 8. Delegations of personnel control to CEOs 9. Annual performance auditing and episodic VFM reviews by auditor general 10. Requirements for whole of government interagency cooperation Graham Scott Page 13 Civil Service Reform Course The World Bank

New Zealand: Evaluation � More effective budget processes � Better aggregate fiscal control and macroeconomic performance � Better prioritisation � Improved efficiency - especially in SOEs and initially in core department administrative costs � Much improved transparency � Some structural reforms caused coordination problems � some structural reforms were reversed � Successfully in some areas � But causing failures in others - notably health and electricity Graham Scott Page 14 Civil Service Reform Course The World Bank

Continuing lessons and challenges • Strengthening processes for getting consensus and commitments to objectives, • Clarifying roles and responsibilities • Strengthening accountability for results • Setting priorities in allocating resources • Improving information for performance and accountability • Improving capability – especially human resources • Being concerned with incentives • Incorporating the reality of constitutional relationships and politics • Alignment of components to government goals and preferences Graham Scott Page 15 Civil Service Reform Course The World Bank

Public Management Reform in the World Bank The World Bank

Integrating strategy, budget and performance management in the WBG � Some – possibly controversial – observations 1. WBG has difficulty setting strategy and unpacking it down the hierarchy and implementing it 2. Performance goals are hard to clarify. Core objective of development which requires holistic experimental approaches and deep learning from experience 3. The amount of its budget over which top management has discretion is very small – hence some ‘beyond budgeting’ concepts will be a challenge 4. The Bank is a political organisation as much as an administrative one and the boundaries are unclear 5. Experienced professionals and managers have grappled with the issues for years Graham Scott Page 17 Civil Service Reform Course The World Bank

WBG (cont.) 1. A budget reform is underway and going well in conventional terms but some regions think SPC format fits poorly with CAS 2. The instrument of performance accountability – the OPE – does not work well 3. Many resist the idea that their performance can be usefully specified and monitored – are they right? 4. Professional staff are masters of the budgetary ‘arts’ 5. Its governance system is unique and complex, which drives any approach to accountability and limits intra- year discretion in modifying the budget Graham Scott Page 18 Civil Service Reform Course The World Bank

WBG (cont.) 1. The central corporate functions have evolved in an embrace with the operations and are themselves somewhat change resistant 2. So they must be both a source of energy for change but must also face change themselves 3. There are crucial strategic opportunities and new strategic threats to be addressed 4. Given the budget situation WBG many are going to have to do more with less. 5. Must work smarter not just harder 6. Improved performance management is crucial Graham Scott Page 19 Civil Service Reform Course The World Bank