THE ROLE OF LEADERSHIP

IN PERFORMANCE
MANAGEMENT
Donald P. Moynihan,
La Follette School of Public Affairs,
University of Wisconsin-Madison
Presentation to Chicago Federal Leadership Forum

Have you encountered?

Strategic planning
Performance measures
Performance contracts
Pay for performance

The role of leadership

During my 20 years in the private sector as a

CEO and advisor to CEOs, I found that
leadership, measurement, and a motivated
workforce create the foundation for good
performance. I am confident that the same is
true in government

Jeff Zients Chief Performance Officer, 2009

Outline

Defining terms
Era of governance by performance
management
From Bush to Obama
How do we use performance systems?
What fosters use of performance data?
Summary points

Defining terms

Performance management

A system that generates performance

information through strategic planning
and performance measurement routines,
and connects this information to decision
venues,

Performance regimes

Performance tools create unprecedented

pressure on public actors to perform, in a
context where performance is defined by
quantitative indicators

Purposes of Performance
Information

Promote: How can I convince political

actors, stakeholders and the public that my
agency is doing a good job?
Celebrate: What accomplishments are
worthy of the important ritual of celebrating
success?
Learn: What is what working or not
working?
Improve: What exactly should who do
differently to improve performance?

Purposes of Performance
Information

Evaluate: how well is my agency

performing?
Control: how can I ensure that my
subordinates are doing the right thing?
Budget: on what programs, people, or
projects should my agency spend the
publics money?
Motivate: how can I motivate employees
and collaborators to improve performance?

ERA of governance by
performance management

Era of Governance
by Performance Management

The rise of a doctrine

Not new, but more influential than
before
Must justify actions in terms of outputs
and outcomes
Basis for holding new structural forms
accountable

Doctrinal logic for change

Government Performance
and
Results Act 1993
Mandated:

5 year strategic plans, updated every 3

years
Specific goals and objectives
Annual performance reviews and plans

From Bush to Obama

Bush approach

Presidents Management Agenda

everyone agrees that scarce federal
resources should be allocated to
programs that deliver results
Wanted to integrate performance data
into budget process

Congressional Justifications

Center around performance goals

Pushback from Appropriations Committees

Veterans Administration told; to refrain from

incorporating performance-based budget
documents; later told: If the Department
wishes to continue the wasteful practice of
submitting a budget structure that will not serve
the needs of the Congress, the Congress has little
choice but to reject that structure and continue
providing appropriations that serve its purposes.

Two budgets required

Congressional Justifications

Department of Transportation told: agencies are

directed to refrain from including substantial amounts
of performance data within the budget justifications
themselves, and to instead revert to the traditional
funding information previously provided. Performancerelated information may be submitted under separate
cover.
Negative consequences were promised for agencies
that ignored this directive: If the Office of Management
and Budget or individual agencies do not heed the
Committees direction, the Committee will assume that
individual budget offices have excess resources that
can be applied to other, more critical missions.

Program Assessment Rating Tool

(PART)

5 year summary by OMB of evidence on

program performance for 1016 programs

18 percent are Effective

31 percent are Moderately Effective
29 percent are Adequate
3 percent are Ineffective
19 percent are Results Not Demonstrated

PART as Evidence-based
Dialogue

Third-party program review with a clear opinion

Greater emphasis on performance
The standard of proof for program performance
can only be satisfied by positive evidence of
results
The burden of proof for performance rests on
agencies
Entire programs are evaluated on a regular basis
The routine nature of PART creates an incentive
to engage

Obama: A Pragmatic
approach

The question we ask today is not whether our

government is too big or too small, but whether
it works -- whether it helps families find jobs at
a decent wage, care they can afford, a
retirement that is dignified. Where the answer
is yes, we intend to move forward. Where the
answer is no, programs will end. And those of
us who manage the public's dollars will be held
to account, to spend wisely, reform bad habits,
and do our business in the light of day, because
only then can we restore the vital trust between
a people and their government

Example: Pedometer
challenge!

Voluntary
Belief that transparent performance
numbers will change behavior, create a
sense of competition and raise
performance

Early evidence on Obama

Performance measurement will be important

The President is creating a focused team within

the White House that will work with agency
leaders and the OMB to improve the results and
outcomes for Federal Government programs
while eliminating waste and inefficiency
Chief performance officer
Continue to maintain agency level performance
positions

What happens to PART?

Not clear
Criticized as ideological, as too broad, as
a data collection exercise
Analysis remains in place, but new PARTs
have not started
OMB have offered agencies funds for
better evaluations

New emphasis on
leadership

Focusing leaders on what matters key

goals
Accelerating results Performance
Improvement Council; data driven
meetings
Style: focused collaboration

New focus on information

use

Will be a central aspect of the Obama

administrations performance initiatives
Jeff Zients: The ultimate test of our
performance management efforts is
whether or not the information is used
Shelly Metzenbaum: the key performance
management challenge facing the Obama
administration is to usenot just produce
performance goals and measures

How do we use
performance systems?

Why care about use?

For reforms to succeed, implies that data is

used
Provides a tractable means of studying the
impact of results-based reform
Public organizations have devoted significant
time and resources into creating routines to
collect and disseminate data
Almost no attention to creating routines of use
How do you use performance data?

Types of responses: 4 Ps

Passive
Perverse
Political
Purposeful

Passive use of data

Passive:

Do the minimum to comply with

requirements
Do not actually use data
Correlated with cynicism about reforms

Perverse use of data

Effort Substitution: Reducing effort on nonmeasured dimensions

Cherry picking/Cream-skimming: Focusing effort
on subgroups of clients most likely to provide
greatest impact on performance measures while
effectively denying services to others.
Measure selection: Selecting metrics or data to
measure that will offer the most favorable
portrayal of a service
Hiding numbers: Declining to present
performance measures that may exist

Perverse use of data

Output distortion: Manipulating measurement

processes to improve measured performance.
Ratchet effects: Curbing productivity in one
time period to avoid the setting of more
challenging targets in another.
Churning: Frequently adopting different
targets or measures to prevent comparison
across time.
Cheating: Simply making up numbers, though
rare, does occur.

Responding to perversity

Add new/additional measures

Change existing measures

Rely/cultivate intrinsic norms to limit

misbehavior

Avoid high-powered incentives

Political uses of data

Process of selecting measures means

shaping a program narrative
Understand that measuring policy is not
a science. It is an art. It is words, and
pictures and numbers. And you create
impressions, beliefs, understandings and
persuasions.

Political uses of data

Data tells us what happened

Program officials still need to interpret and
explain:

why performance did or did not occur;

the context of performance;
how implementation occurred;
an understanding of outside influences on
performance; and
how to choose which program measure is a
priority.

Exploit ambiguity and subjectivity of data

Political: Ambiguity of data

Examine same programs, but disagree

on data
Agree on data, but disagree on meaning
Agree on meaning, but not on next
action steps/resources

Political: Subjectivity of data

Actors will select and interpret

performance information consistent with
institutional values and purposes

Evidence of Ambiguity in
PART

Ambiguity of terms:

E.g.: Program purpose, quality evaluation, ambitious, having

made progress

How to interpret results? Multiple logics from

experiment:

Argue that ratings are unreliable

Cut poorly managed programs
Raise funding for programs with positive assessments
Parity: Raise funding because program with similiar
assessment received more
Delay cuts because progress being made
Clear relationship between resources, need and program
delivery
Stakeholder and congressional views

Evidence of Subjectivity
with PART

OMB using PART to expand influence in

performance management/policy

OMB can define programs, goals, measures,

agency responsibility

Disagreement with agencies/Congress

on meaning/relevance of PART
Experimental evidence:

UW students significantly more likely to

disagree with OMB, and to argue for higher
assessments and resources

Implications for
Decisionmaking

Performance information use reflects

political process, does not replace it
Performance information use does not
lead to clarity
Ability to structure dialogue tied to
power

Purposeful use of data

Use data to improve program

performance
Goal-based learning

efficiency improvements
better targeting of resources
more informed strategic decisions,
tying indicators to rewards/sanctions in
contract arrangements

Purposeful use of data

Use of performance information for

problem-solving more likely to occur in
intra-institutional settings

Reduces competing interpretations

Problem of neglect

rarely do anything with information

Learning forums

Routines specifically focused on solutionseeking, where actors collectively examine

information, consider its significance and
decide how it will affect future action

What measures are useful for agency

officials?

What other ways can we encourage learning

forums?

What fosters performance

information use?

The Right Context

Simple function that is easy to measure

Clear link between measures of actions,
and measures of outcomes
One-dimensional relatively few
measures that do not conflict with one
another
Stakeholder support clear agreement
about purpose

Other factors

Learning forums
Mission-based culture/supportive culture
Resources
Administrative stability
Administrative capacity

Quantitative approach

3 studies using survey-based data

Self-reported performance information
use
Results from Moynihan and Pandey (in
press) and Moynihan, Wright and Pandey
(2009; 2010)

Study 1: Ordinal regression of reported performance information use

for decisions
Variable
Hypothesized
Result
direction
Individual beliefs
Public service motivation
Positive
***
Job attributes
Reward expectation
Generalist leader
Task-specific experience

Positive
Negative
Positive

-***
--

Organizational factors
Information availability
Developmental culture
Flexibility
Budget staff take adversarial role

Positive
Positive
Positive
Positive/negative

***
***
*
--

External factors
Citizen participation
Professional influence

Positive/negative
Positive

+
+

*** = significant at .001; ** = .01; * = .05 +=.10 (two tailed tests)

Controls: region, income per capita, government size, population size, population homogeniety

Intrinsic vs. extrinsic

motivation
Sense of public service motivation
mattered
Possibility of extrinsic reward did
not create an incentive to use data
Implication: performance
information use as extra role
behavior

Organizational factors

Information availability

Supply-side approach
Use increases with better information, and
when information is tied to management
systems

Organizational factors

Demand side approach

Culture matters
Previous

work focuses on whether culture

welcomed performance management reforms
What about broader measures of culture?
Developmental culture (adaptability, readiness,
growth)

Flexibility unlikely to use data if cannot

apply insights

Specialist vs. generalist

leaders

Task-specific knowledge provides context

in which to interpret and apply data
Leadership role

Task-specific leaders more likely to use data

than generalist leaders

Other evidence of
leadership
Support/commitment
Provision of resources
Participation

What other ways can leadership

matter?

Study 2: Transformational
leadership

Approach to leadership consistent with

performance:
Articulate an appealing vision of the
organizations mission and future
Model behavior consistent with vision,
inspiring role model
Challenge old assumptions

Propositions

Transformational leadership behaviors

will have an indirect, positive effect on
performance information use through its
influence on goal clarity
Transformational leadership behaviors
will have an indirect, positive effect on
performance information use through its
influence on organizational culture.

Key measures

Transformational leadership

Asked department heads/assistant city

managers on extent to which city manager
demonstrates transformational leadership:
articulates his/her vision of the future.
leads by setting a good example
challenges me to think about old problems in
new ways
says things that make employees proud to be
part of the organization.
as a clear sense of where our organization
should be in five years.
Aggregated responses by organization

Structural Equation Model

Implications

Leadership and management

Indirect effects are important
Setting the table as long-term
leadership strategy

Study 3: Perceived social

impact

Individuals who see their work as helping

others more likely to use performance
information
Some evidence that individuals who
perceive greater social impact are more
motivated
Why should it relate to performance
information use?

Key measures

Perceived social impact

I feel that my work makes a positive

difference in other peoples lives.
I am very aware of the ways in which my
work is benefiting others.
I am very conscious of the positive impact
my work has on others.
I have a positive impact on others in my
work on a regular basis

Purposeful and political use

Purposeful
I regularly use performance information to make decisions.
I use performance information to think of new approaches for
doing old things.
I use performance information to set priorities.
I use performance information to identify problems that need
attention.

Political
I use performance information to communicate program
successes to stakeholders.
I use performance information to advocate for resources to
support program needs.
I use performance information to explain the value of the
program to the public.

Table 2: OLS Regression of Performance Information Use

Independent variables

Purposeful Use

Political

Perceived social impact

.43 (.12)***

.52 (.11)***

Goal clarity

.19 (.10)*

.25 (.09)**

Centralization

.05 (.07)

.10 (.08)

Political support

.14 (.07)*

.06 (.07)

Red tape

.04 (.03)

.02 (.02)

Years in position

.01 (.007)

.006 (.008)

Supervisory level

.03 (.05)

.02 (.04)

Educational level

.05 (.07)

.09 (.06)

Sector

-.06 (.15)

.08 (.14)

*** = .001;**= .01; *=.05 one-tailed test

N=184; R2= .25

N= 186; R2= .31

Study 4: Experimental
approach

How does performance information

matter to decisions?
How does the framing of performance
information affect decisions?
Respondents given surveys with scenario
make budget recommendations
Series of vignettes for different programs
Half vignettes are control, half are
treatment

Theoretical background

Research on decision frames from

psychology and behavioral economics
Performance information is strategically
selected and presented does this work?

Does the Addition of Performance Data

Matter?

Control: no data; treatment: addition of data

without clear correlation to resources
The Department of Land and Water Resources is responsible for
monitoring and maintaining the water quality of lakes in the
county, including two major lakes that are popular for swimming
and other water sports during the summer. Estimates of water
quality are based on pH levels, pesticides, nitrates and other
chemicals in the water.
2007

2008

2009

Program funding

174,000

179,000

182,000

Number of days water quality of major lakes

deemed unsafe

12

14

11

Does the Addition of Performance Data

Matter?

Control: no data; treatment: addition of data

with clear relationship to resources
The Department of Social Services delivers a program called
the Home Downpayment Initiative. Using a mix of federal,
state, and local resources, the program seeks to increase the
homeownership rates among low-income and minority
initiatives. To do so, it provides financial assistance to firsttime homebuyers for downpayment and closing costs.
2007

2008

2009

Home Downpayment funding

723,000

747,000

769,000

Number of families purchasing homes

36

38

46

Is outcome data more powerful than

output?

Control: output data; treatment: outcome data

The Department of Health Services offers a program called

Health Check, which is a preventive health check-up
program made available for anyone under the age of 21
who is currently enrolled in Medicaid. Health Check
provides a head-to-toe medical exam, immunizations, eye
exam, lab tests, growth and development check, hearing
check, nutrition check, and teen pregnancy services. The
goal of the program is to prevent
the 2008
incidence2009
of more
2007
serious and more expensive health situations.

Health Check funding

232,000

244,000

269,000

Clients treated

1232

1401

1325

Estimated savings due to preventive care

383,000

402,000

389,000

Threshold effects

Treatment: performance data pass a memorable

threshold (200)
The County Tourism Board seeks to increase visits from those who
live outside the county, and to increase the use of recreational and
cultural opportunities by both locals and outsiders. It collects data
from local hotels, restaurants, and other businesses that depend on
tourists. In the last number of years, the number of tourists visiting
the county has stayed relatively flat at about 100,000, and the
Board has focused its marketing budget on quality, not quantity,
by increasing the dollar amount that each tourist spends.
2007
Program budget
Average daily dollar amount spent by tourists

Program budget
Average daily dollar amount spent by tourists

120,898
178

2008
124,490
184

2009
131,289
195

2007
2008
2009
124,294
127,196
135,329
183
188
201

Including equity measures

Treatment: addition of equity measure that aligns

with mission

The Department of Social Services funds the Early Intervention

Program, which provides services for children three and under
with developmental delays and disabilities. The mission
statement for the Early Intervention Program is: Our mission
is to provide access to therapies that improve child
developmental outcomes. The program is administered by a
non-profit, and employs therapists to work with children and
2007
2008
2009
families in the home environment.

Program budget
Number of hours of contact per year
Number of children served
Percent of eligible children below the
poverty line that access services

329,677

333,451

341,386

8901

8977

9011

212

233

221

42%

47%

51%

Summary points: what to do

Move beyond passive and limit perverse

use
Focus on political use

What is the narrative of your program?

What goals are meaningful and telling? How
do they relate to the narrative?
What goals are essential to explaining
program purpose and achievement?
How do you frame and communicate
measures? Who is your audience?

Summary points: what to do

Focus on purposeful use

Provide resources, be involved, make clear

that it is important
Encourage right context for use
Foster

goal clarity
Encourage supportive culture

Create and support learning forums

Appeal to intrinsic motivation
Focus

on demonstrating significance of
measures

Questions/Comments

dmoynihan@lafollette.wisc.edu

http://www.lafollette.wisc.edu/facultystaff/m
oynihan-donald.html

The Dynamics of Performance Management

Georgetown University Press