Performance Management Research for State and Local Government: Where It Should Go Next

One—Sifting Essential Components and Working Tools from Mere “Window Dressing”

Much of the current literature has focused on the trappings of performance management—i.e., whether organizations possess the elements commonly associated with performance management and demonstrate the capacity for performance management—rather than on evidence of the use and usefulness of these elements. Ideally, future research will confirm or refute the necessity of the elements commonly associated with performance management and the requisite characteristics of each.

For instance, among the most widely accepted prerequisites of performance management is the possession of a good set of performance measures. But all sets of performance measures are not equally useful for management purposes (Ammons 2020; Halachmi 2005). Should an organization having a rudimentary set dominated by output measures be given the same performance management credit as one with more sophisticated measures of efficiency and outcomes and, more importantly, evidence of the use of these measures to improve performance? Helpful research would examine the relationship between measurement sophistication or maturity and usefulness in performance management. Perhaps it would also lay to rest assertions about the dual use of performance measures for accountability and performance improvement. If used for performance reporting in the name of accountability, does the publishing of these measures engender a level of defensiveness among managers, supervisors, and workers that reduces their openness to learning and thereby destroys the usefulness of the measures for learning and performance management (Van Dooren, Bouckaert and Halligan 2010)? If so, can a government simultaneously be both transparent and accountable about its performance and committed to performance excellence and continuous improvement?

Organizations have been known to adopt performance measures and other presumed tools of performance management more for symbolic purposes—signaling their professionalism—than for actual use. Building the capacity for performance management—that is, displaying all the trappings—is not the same as actually engaging in performance management. Still, much of the current literature offers assessments of government organizations and judgments about performance management based on the presence or absence of trappings. Even the vaunted Government Performance Project of the 1990s and 2000s awarded managing-for-results grades to state and local governments on the strength of a government's capacity for performance management rather than on the results it was achieving. Future research should be sufficiently discerning to sift essential components and working tools from window dressing.

Two--Distinguishing Performance Management Exemplars and Honorable Mentions from Also Rans

State and local government practitioners wishing to adopt performance management in their organization understandably seek exemplars—governments doing performance management well. But popular lists of performance management leaders do not always stand up to scrutiny. When researchers in one study asked probing questions of two dozen cities that enjoyed reputations for managing for results, one-third withdrew with several indicating that they were not as far along in managing for results as their reputation would imply (Burke and Costello 2005). In another study of local governments having reputations for performance management excellence, researchers found a cluster of governments whose spokespersons considered performance management in their organization to be neither a system nor a management philosophy but instead merely a means of upgrading their performance measures, a response drawing their reputation into question (Ammons, Liston and Jones 2013).

Many government officials have a tendency to overstate their organization's engagement in performance management, often anchoring their claims on their adoption of the mere trappings of performance management in a “hoop-jumping exercise” (Behn 2002, 7) without a meaningful commitment to the actual use of performance information or a record of performance improvement. Researchers whose work focuses on superior results rather than on reputations or simply the trappings of performance management can help practitioners by sorting out performance management contenders from mere pretenders.

Three—Ranking Performance Management Tactics by Relative Effectiveness

Managers wishing to engage in performance management can choose from a wide variety of tools as they approach the task. Among their choices are these prominent options: data analytics, target setting, market-type mechanisms (for instance, contracting for services, managed competition, and publicized comparisons of public sector providers—i.e., “league tables”), rigorous cost accounting, performance-related pay, benchmarking, Lean, Six Sigma, the Balanced Scorecard, stat systems, and behavioral tactics. Each of these, in the hands of a skillful practitioner, is a tool that can use performance information to get improved results.

Unfortunately, current research provides little guidance regarding the comparative records of success among the various performance management tool options or their respective average returns on investment (ROI). Such research would be challenging to perform—requiring analytic skills of much greater depth than required for studies surveying the use of various tools and the perceptions of managers about their value—but this is the research that managers in state and local government need.

Four—Documenting the Successes of Routinely Conducted Performance Strategy Sessions

Performance strategy sessions conducted regularly as part of an organization's management routine offer recurring opportunities to review the organization's performance information, pinpoint problems, brainstorm solutions, and ensure follow-up action. Whether modeled on New York City's Compstat, Baltimore's CitiStat, or more collegial “learning forums” (Moynihan 2005), such sessions have been praised for setting “a cadence of accountability” (O’Malley 2019, 14) in the organization and getting results. Research is needed that will document more precisely the results attributable to this tactic beyond general claims of success and the ramifications of adopting different formats (for example, collegial versus more aggressive—even confrontational—sessions) for the results achieved.

Five—Devolved Decision Authority, Competency, and Trust

Performance management doctrine calls for engaged upper management that sets the general course or direction and inculcates organizational values throughout the ranks. It also calls for devolved decision authority—that is, meaningful decision authority at the organization's operating levels. This combination is akin to what Peters and Waterman (1982) called “loose-tight properties,” with values set at the top, but most operating decisions—as long as they are consistent with those values—left in the hands of operating managers.

The arguments in favor of decentralization are clear. “[R]ather than devising top-down systems, performance management needs to be in the hands of middle managers and front-line supervisors who understand the situational requirements best” (Van Dooren, Bouckaert and Halligan 2010, 186). Centralized decision making, close supervision, and minutely specified procedures have been shown to alienate professional employees and other workers, and to restrict employee creativity, risk taking, and productivity (DeHart-Davis and Pandey 2005; Feeney and DeHart-Davis 2009). And yet, devolved decision authority is rare in state and local governments, as officials at the top of these organizations and managers of staff agencies, such as finance, budget, and human resources, cling to their prerogatives and deny to operating managers meaningful decision authority over the use of resources. In a study of 66 local governments having reputations for performance management excellence, only eight were found to have both devolved decision authority and the frequent monitoring of performance information by senior managers—the combination seemingly required in organizations achieving the loose-tight ideal (Ammons and Roenigk 2015).

Research is needed that will clarify the value of devolved decision authority and will prescribe more thoughtfully the steps executives and managers can take toward judiciously awarding greater discretion to subordinates, perhaps not in a doctrinaire manner but instead as these subordinates demonstrate their capacity for such discretion.

Six—Forging More Explicit Linkages Between Human Resource Management and Organizational Performance Management Practices

If not for the controversial topic of performance incentives, the human resource management function in organizations would be all but ignored in performance management research or mentioned only for its association with various civil service protections that sometimes thwart government performance efforts (Condrey and Battaglio 2007). Yet the broader human resource management (HRM) function logically should be a critical contributor to performance management (Garengo and Sardi 2020).

Research is needed that brings clarity to competing findings on the efficacy of monetary and nonmonetary awards, individual and group incentives, tactics that reward or punish programs with budget gains or losses, those that use employee conference and training budgets as incentives or rewards, the disparate effects of incentives on employees at different levels of the organization, and their effects on extrinsic and intrinsic motivation (Bregn 2013; Brewer and Walker 2010; Dee and Wyckoff 2015; Stazyk 2013; Swiss 2005; Torres, Pina and Martí 2015; Christensen, Paarlberg and Perry 2017; Weibel, Rost and Osterloh 2010). Also needed is research that more clearly ties the performance-influencing, standard work of HR departments—from recruiting and developing employees to guiding supervisors in employee performance appraisals—to the organization's performance management efforts (Walker and Andrews 2015).

Seven—Performance Management and Social Equity

Performance management efforts focusing on dimensions of performance other than social equity, such as effectiveness and efficiency, have sometimes yielded results having disparate effects for favored and disfavored elements of the population (Kroll 2017; Pasha, Kroll and Ash 2021). A pressing task for researchers is to determine whether performance management can be deployed to the benefit of social equity.