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

The World Bank

Presented to: World Bank Staff PREM Knowledge & Learning Week Washington, DC April 17-19, 2007 Presented by: Graham Scott

Session 5: Session 5: Motivating Organizations & Motivating Organizations & Their Staff to Perform Their Staff to Perform

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Outline

Some thoughts on motivation Trends in performance management of public

• rganisations

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

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Some thoughts on motivation

Motive: “That which incites to action” The principles by which actions become aligned with

• rganisational purpose?

Managerial Psychological Sociological or cultural The late 20th century synthesis (contradiction?) Governance/ accountability for results/

transparency/devolution/ empowerment/ citizen- client focus/ cultural change

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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

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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

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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

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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

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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,

• utsourcing, corporatisation, autonomous

agencies

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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

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Counter-currents

The vision was integrated performance

• riented, 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

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Public Management Reform in New Zealand

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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

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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

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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

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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

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Public Management Reform in the World Bank

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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

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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

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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

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WBG (cont.)

• Need for much improved linkages between

strategy, HR and budget and much better alignment of support services with operations

• WBG is a change resistant organisation
• Attempts to impose benchmarked private

sector practices are likely to be a poor fit and circumvented by embedded behaviours

• Any non-trivial transformation will require effective

leadership that must:

• Take full account of the realities of the Bank

and not just follow some notion of best practice

• Take well analysed and calculated risks
• Put an enormous effort into communicating

about problems and seeking shared solutions

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Performance improvement in D&TEs – why so hard?

Corruption & Patronage undermine performance

management

Lack of professionalism in public policy and

management

Stable wealth destroying institutions as per

Douglass North

It isn’t easy anywhere and Developed countries

began without so many handicaps

The step up in capability needed is large But most countries have skills they under-use Integration is the key and it is the hardest

challenge

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Common problems

Wrong diagnosis - wrong solution Unfocused, over-ambitious plans Fascination with gimmicks Canned methodologies and models Leadership wedded to the status quo Powerful disincentives for making changes Donor distortions and distractions Weak partnership between officials and

advisors

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What works?

• Thorough diagnosis before technical solutions
• Deep knowledge of relevant local and international experience
• Deep thought and commitment to global professional

excellence in helping partners find solutions

• Open trusting relationships with relevant senior country

partners

• Being well-grounded in constitutional relationships and

political and bureaucratic realities

• Subtlety and nuance in the application of donor interventions

and leverage – i.e. getting the WBG role right!

• Keeping clear principles in mind but taking the opportunities

that arise and not being rigid but intelligent about sequencing

• Patience and persistence over long periods but the willingness

to walk away from hopeless situations

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Q&A