Abstract
Governments use various performance measures to ensure that public services delivered by private-sector providers are safe and meet citizens’ particular needs. These measures can include awarding accreditation and assessing citizen satisfaction. However, few studies have investigated how objective performance measures relate to citizens’ subjective evaluations of providers from the perspective of service users. To fill this gap in the literature, this study closely explores a particular case of the Korean childcare market in which governments administer a large number of private-sector providers that play a dominant role in delivering public services. Our findings indicate the positive accreditation–satisfaction link is weakened when parents may not be aware of a provider's accreditation status or when their selected service provider is nonprofit, as opposed to for-profit. Overall, this study suggests that it is important to understand why there is some degree of incongruence between objective and subjective measures and how these two different performance indicators converge in the data. Special attention should be given to bridging the gap by closely reviewing institutional pressure on service providers and a symbolic impression of accreditation.
Keywords
Introduction
Over the past few decades, spurred by business-like government reforms (e.g., voucher schemes, privatization, and outsourcing), governments, desiring operational efficiency and high-quality services, have increasingly relied on private-sector organizations to provide public services in areas ranging from mundane city services (e.g., garbage collection and utilities) to social services such as healthcare and childcare (Kim, 2017). However, it has been argued that without sufficient safeguards in place, some service providers will not be cost-effective or trustworthy due to issues such as asymmetric information, insufficient performance monitoring, opportunism, or corruption (e.g., Hansmann, 1980; Stigler, 1971).
Considering this challenge in light of agency theory, many governments have attempted to reduce such risks—especially when it comes to service quality—by regularly measuring organizations’ performance or instituting policies or regulatory systems that include strong penalties or inducements. Among these strategies, accreditation is a method widely used to tackle agent problems in public service delivery settings. That is, professional titles and/or certifications are awarded to responsible, qualified service-delivery organizations, which are then subject to regularly scheduled assessments for renewal. As an objective performance measurement tool, accreditation plays a role in motivating organizations that provide public services, especially private-sector ones, to adopt a set of standards or best practices. Publicly accredited organizations and those pursuing accreditation may engage in better quality control or put effort into enhancing their qualifications (Beaulieu & Epstein, 2002; Heuer, 2004). An organization's accreditation may also provide citizens a positive information cue about its performance, (re)assuring the public that their families will be safe or well cared for (Scrivens, 1997).
Another strategy governments use to measure the performance of external private agents is collecting citizen evaluations, such as satisfaction surveys (Charbonneau & Van Ryzin, 2012; James, 2011; Lee & Shin, 2023) or monitoring service recipients’ behavioral changes or intentions to act (Jilke et al., 2016; Lee, 2023). Assessments of citizen satisfaction are probably the most widely used method for collecting feedback in the public sphere. They serve as important indicators in the monitoring and diagnosis of processes and outcomes pertaining to political institutions, policies, public service-delivery organizations, and other aspects of government performance (Gofen, 2012; James, 2009; Kim & Kim, 2022). While satisfaction surveys can be controversial, they may help assess the extent to which citizens receive good value for the money from private-sector organizations engaged in public service delivery.
Given governments’ growing reliance on both objective and subjective indicators to better manage the performance of public service organizations, 1 scholars in the area of public administration have begun to examine the relationship between the two different types of performance measures (e.g., see Charbonneau & Van Ryzin, 2012; Kelly, 2005; Kelly & Swindell, 2002; Parks, 1984; Van Ryzin et al., 2008). Despite the mixed evidence regarding the value of citizen surveys and the somewhat critical views toward governments’ reliance on them, there is a growing understanding that what citizens think about the quality of the public services they receive can mirror objective assessments of organizational performance (Charbonneau & Van Ryzin, 2012; Kim & Kim, 2022; Van Ryzin et al., 2008). Since citizens actually consume a given service, their opinions can effectively complement objective or quantitative measures of public service performance (Kim & Kim, 2022; Song et al., 2020).
Nevertheless, more importantly, there is still much to learn about the conditions under which the link between objective and subjective measures can be corroborated. In other words, what is lacking in recent scholarship is a more developed discussion as to how data from these two different performance measures converge, not to mention why there is some degree of variation across the two performance measures.
This study attempts to fill this gap by exploring Korean public childcare service provision as an empirical vehicle. In recent decades, the Korean government has sought to increase the competitiveness of its childcare system and to meet citizens’ diverse needs and expectations by allowing private-sector organizations to participate in the public childcare market. Interestingly, over time, the proportion of private-sector providers in this market has increased, and they now make up the vast majority of childcare providers. In 2018, privately run childcare facilities accounted for approximately 91% of all childcare providers (Ministry of Health and Welfare of South Korea (MHW) and Korea Institute of Child Care and Education (KICCE), 2018a). In response to this rise in private-sector providers, the government has instituted quality assurance measures including an accreditation system for Korean childcare centers. Since the mid-2000s, accredited private-sector organizations providing childcare in local jurisdictions—including both nonprofit and for-profit childcare centers—have come to be labeled “public-type childcare centers” 2 and such providers receive financial support from the government. Through these operations, the government has enticed more potential service providers to enter the market, promoted qualified businesses, and provided parents the opportunity to enroll their children in privately run childcare facilities. These changes may reassure citizens who are skeptical of private childcare centers, which in practice have received less supervision from the government than public childcare centers. However, ensuring the satisfactory performance of organizations that engage in the delivery of caretaking and related support services across sectors is still a challenge. To date, governments have faced managerial and ethical challenges related to the private provision of public childcare, including foodborne illness outbreaks, misuse of public funds, and allegations of child abuse. Accreditation of private-sector organizations has the potential to reduce such challenges, but its value may not be obvious to citizens.
Such challenges have motivated us to investigate the relationship between the two types of performance indicators—government-led objective measures (here, “publicly accredited” status) and citizen-generated subjective measures (here, parent satisfaction surveys). In this study, we use agency theory to frame our analyses. Our central research question is: “How does the accreditation of public service organizations relate to citizens’ satisfaction with the services they provide?” The analyses use secondary data from the 2018 Nationwide Survey of Childcare and Early Childhood Education, including data on parent satisfaction. We attempt to explore not only whether citizens who are aware of their providers’ accredited status tend to be more satisfied, but also whether the relationship between citizens’ satisfaction with accredited service providers varies across sector (nonprofit versus for-profit organizations).
The evidence from our analyses shows that citizens’ awareness that a service provider is publicly accredited has a limited yet positive relationship with their evaluations of the provider's performance. Surprisingly, it turns out that citizens’ satisfaction with their childcare service providers varies significantly depending on their degree of awareness of the provider's accreditation status and whether the provider is nonprofit or for-profit. Overall, our findings suggest that the link between objective and subjective performance indicators is weak, which is puzzling. We observe an incongruence between the government's assessments of service providers and citizens’ (service users’) evaluations of their services. These findings have significant implications for public administration scholars and practitioners because it is important to understand the mechanisms behind various types of performance measures and why they may not consistent with each other, and to uncover the missing factors that can explain this incongruence.
Background on Quality Accreditation in the Korean Childcare Market
Since 1991, in response to unprecedented demographic change in the country, largely driven by women increasing economic participation and opportunities, falling birth rates, and rapid population aging, the Korean government has paid a great deal of attention to childcare services by setting a national-level agenda to avoid accelerating the country's so-called demographic cliff. In other words, fearing a worst-case scenario, policymakers began to design some supply side policies to enhance families’ access to childcare services. Notably, unlike in the past, a large number of privately run centers were allowed to enter the childcare service market (Rhee, 2007). However, there was a need for the government to adopt a means of strengthening accountability and transparency in the private sector by nudging it to be more officially sanctioned and publicly recognized.
As a result, since the mid-2000s, in an effort to continue to maintain and improve service quality in the childcare sector, the government has designed and initiated a nationwide quality accreditation system for private-sector service-delivery organizations. As a trial operation, the first accreditation policy was introduced in 2005 after intensive case research on accreditation standards for service providers in the West (e.g., the United States and Australia) (Kim, 2014; Rhee, 2007). 3 The main purpose of this policy was to provide (and maintain) satisfactory physical environments in childcare facilities and kindergartens, to ameliorate working conditions for staff, and to improve the quality of the curriculum in childcare and early childhood education (Rhee, 2007).
There was another dramatic shift in the childcare market in the 2010s. In 2010, the Korean government implemented a universal free childcare policy for all households with children under 5 years of age (MHW, 2018a; Park & Jun, 2017). This approach brought about a regulated market with a price ceiling. In addition, the government started to offer parental subsidies (regardless of income level) through a voucher scheme that was intended not only to help expand parents’ choices of service providers, but also to take advantage of existing private-sector providers by encouraging them to expand the supply of childcare services. Such extensive financial support by the government led to an increase in the number of private-sector organizations in the childcare market in a matter of years. In 2018, the majority of children enrolled in childcare services (approximately 85.8%) received care from private-sector providers, with 71.6% attending for-profit sector childcare centers and 14.2% attending nonprofit ones (for more information, see MHW & KICCE, 2018a).
In 2011, both central and local governments launched a new version of the accreditation policy designating qualified private-sector organizations as “public-type” childcare centers. 4 Through this updated accreditation policy, the government has sought to identify accountable and trustworthy private-sector providers (both for-profit and nonprofit) and further motivate potential candidate-organizations to learn from their peers in the same service industry (MHW & KICCE, 2011; Seoul Welfare Foundation (SWF), 2020). Although accreditation is a voluntary process by which an organization may demonstrate that it meets the standards established by professionals, it should be noted that the “public” designation signals that private-sector providers are under the drect supervision of the government. This is because publicly certified private-sector organizations are likely to be dependent on financial support from the government, while being committed to delivering public services to the people and being expected to execute such duties faithfully.
Specifically speaking, the program is mainly open to private-sector providers with general accreditation grades over 90, also known as high-quality care class A. Criteria are divided into three categories, which include providers’ openness or operational stability, the expertise of the staff, and autonomous regional evaluations (for more information, see MHW, 2020, pp. 2–16). These standards are set to ensure that organizations operate soundly and that the process is accountable and transparent. Once providers are selected as accredited centers (a designation that is renewed through evaluation every 3 years), they are awarded a “public-type accreditation certificate” along with grants in the form of a monthly financial allowance from the local government that helps cover their operational costs (e.g., labor costs). If they fail to maintain the standards, however, their accreditation might be canceled and the subsidy would be cut off beginning the following month.
Conceptual Framework and Hypotheses
Accreditation as Nudging
To frame the focused analysis, we rely on agency theory, which suggests that there is some possibility of information asymmetry between service providers (agents) and service recipients (principals). As mentioned earlier, the main reason governments use quality accreditation policies is to address the risks related to service quality when using alternatives to traditional public service delivery. In support of this view, both scholarship and practice have suggested that accreditation may be positively associated with service performance, since “accredited” status can serve as a sort of nudge in building a sense of professionalism in public service organizations beyond just presenting a symbolic impression to stakeholders.
Specifically, it is argued that accreditation plays an “adjudicative function” per se in determining and ascertaining whether a particular public service-delivery organization is in compliance with government-established professional standards of practice (Kinney, 1994). What is more, one can claim that the accreditation policy produces competition among peer organizations in the service delivery market. This is because in practice, for public service organizations, “being publicly accredited” may represent having an opportunity to build and enhance reputations and relationships with external stakeholders beyond mere publicizing the reputations of accredited organizations and receiving financial support from the government. Thus, the quality accreditation system not only motivates internal stakeholders (e.g., staff) to act in line with organizational goals and the interests of the community, it may also be a way for organizations to earn the trust external stakeholders (e.g., service users or governments) (Casile & Davis-Blake, 2002; McCabe et al., 2018; Teodoro & Hughes, 2012).
Taken together, an accreditation policy is thus expected to work as a positive inducement mechanism to organizations, in that service providers open themselves up to scrutiny by aligning with or promoting “professional and ethical principles” to ensure continuous improvement of service quality (Carter & Sapp, 1994). If this is true, then it suggests that in practice, the performance of accredited providers does not fall short of the performance of other providers. From the insight of agency theory, we claim that via accreditation, agents can act in the best interests of the principals. That is, the performance of “accredited” organizations is likely to exceed or at least meet citizens’ expectations, which in turn may lead to higher levels of overall satisfaction with the services.
Previous studies have presented evidence that while public service organizations might act strategically to become publicly accredited in order to build their reputations or receive financial support from the government or external stakeholders, in situations where participation in an accreditation program is voluntary, service providers also attract public attention to their commitment to satisfactory performance (Bekkers, 2003; Carman & Fredericks, 2013; Feng et al., 2016). Additionally, recent empirical studies of public childcare services in Korea have observed that quality accreditation is not negatively associated with citizens’ evaluations of accredited providers’ performance (e.g., Kim & Kim, 2013; Lim & Kim, 2014; Park & Cho, 2019). Given such clues as to the positive causal link between accreditation and satisfaction, this study offers the following hypothesis as follows:
Hypothesis 1: Citizens are more satisfied with public service organizations recognized as accredited than unaccredited.
Citizens’ Awareness of Accreditation Status
In the context of social services such as healthcare or childcare services, the public is unable to observe the quality of the service prior to purchasing it and may have no experience of the delivery process, thus may have difficulty assessing if the services are safe without expert guidance (Kinney, 1994). Thus, being informed of a service provider's accreditation status is doubtless valuable to citizens (Ishimine et al., 2009; Zellman et al., 2008). In this respect, we suggest that the symbolic (signaling) effect of accreditation informs citizens which providers are under the direct supervision of the government, naturally leading them to evaluate the competence of public service providers or the quality of the services.
Specifically speaking, as an objective performance indicator, a service provider's accreditation status can provide a fairly credible signal of the service quality to stakeholders including citizens, not to mention government agencies. In practice, while not all citizens will experience a given service directly, they may naturally form perceptions about the quality of specific service providers vis-à-vis their competitors. Some citizens, acting as rational consumers, will have reasons to doubt the performance of certain public service organizations, and will probably want to know that a provider they select has been recognized as providing a high standard of care (Scrivens, 1997). Particularly in social service markets, there is a general understanding that safety is paramount in the minds of those who receive care. Hence, in cases where consumers directly or indirectly confront unobservable or unsatisfactory management issues with the services from private-sector providers, they may struggle to ascertain whether a specific provider of services has the requisite experience and resource management capacity to ensure the safety of public services (Kinney, 1994). Fearing poor service, the public is likely to rely on a quality accreditation system in their decision-making practice as it makes information on service providers easily accessible (Sanyal & Martin, 2007), and consumers are likely to consider such titles or certifications as a signal of trustworthiness with regard to service quality (Frumkin & Galaskiewicz, 2004; McCabe et al., 2018; Scrivens, 1997; Teodoro & Hughes, 2012).
More importantly, despite the abovementioned expectations that an objective performance measure (here, accreditation) can provide information about a provider such as their organizational resources and their capacity to provide service of a given quality, how accreditation policies are perceived by citizens, in terms of their satisfaction with the actual policy outcomes, can differ from the intended effects of the policies. That is, as some scholars have pointed out (e.g., Kelly, 2005), there is some discrepancy between the so-called “assumed satisfaction” of citizens and their “demonstrated satisfaction” in practice. Regarding the gaps between objective and subjective performance indicators, for example, one can argue that due to users’ different socioeconomic or demographic backgrounds such as their education or income levels, their perceptions of policy outcomes may differ—and once formed, these may persist—thus influencing interpretations of policy recipients’ experiences with the relevant services (Kelly, 2005; Stipak, 1979).
Although the evidence of relations between such factors and citizens’ evaluations of their providers, which translate to their level of satisfaction, is still mixed and inconclusive, scholars have begun to discuss the interplay of citizens’ expectations and their satisfaction, building on the view that satisfaction equals service quality minus expectations (James, 2009; Oliver, 1997; Van Ryzin, 2004, 2006). This formula suggests that the satisfaction judgment is determined by a process in which consumers compare the actual performance of a service provider with their prior expectations about the benefits or outcomes of the service offered (Oliver, 1980; Van Ryzin, 2006). In the words of Van Ryzin (2006, p. 600), “[t]he disconfirmation of expectations can be positive as well as negative,” depending on whether the performance exceeds expectations or falls short of them.
Following this line of reasoning, this study contends that the so-called expectancy-disconfirmation model can be used to examine how citizens interpret public service organizations’ accreditation status vis-à-vis the organizations’ performance. While this is an underexplored topic in the literature, we view citizens’ recognition of providers’ accredited status as a critical factor in their evaluations of the providers’ performance, because their satisfaction with the performance likely hinges on their expectations of how well accredited providers will perform and these expectations stem from their awareness of a service provider's accredited status. Previous studies have noted that reasonable or credible information about public service providers’ performance tends to shape individuals’ positive or normative expectations, which represent “what they think service performance will be” and “what they think performance should be,” respectively (James, 2009, 2011, p. 1420). Working from this perspective, it can be argued that when citizens are aware that their selected service provider is publicly accredited, they are likely to have a certain level of expectation regarding the service quality, and may have higher expectations of an accredited provider compared to one of unknown status, which in turn may lead them to be less satisfied with the accredited provider's performance than they expected to be.
Of course, in practice, high expectations will not necessarily constitute or trigger normative expectations, or vice versa (James, 2011). Admittedly, the underlying process by which an individual citizen evaluates accredited providers (e.g., being disappointed by their performance) might be complex or unclear because it relies on the individual's prior experiences or recognition of their chosen providers’ objective performance (e.g., being aware of the providers’ accredited status). It should also be kept in mind that as a few studies have found, as external stakeholders, people have a limited capacity to absorb, evaluate, and use relevant information in their decision-making and subsequent actions (here, their choice of service providers), partly due to their disinterest or lack of understanding of quality accreditation systems (e.g., see Hibbard & Jewett, 1997; Marshall et al., 2000). Thus, given that citizens may originally hold positive expectations of accredited providers, some could turn out to be more critical of the providers or hold them to their own particular standards when comparing them with others, or they may not rate the effectiveness of the current accreditation policy highly, thereby underestimating the performance of accredited providers.
Nevertheless, many of the empirical studies of Korean public childcare services have provided further confidence regarding our line of inquiry (e.g., see KICCE, 2016; Kim & Kim, 2013; Lee et al., 2012; Park & Cho, 2019). As previously noted, in the existing literature, there is strong evidence that the performance of publicly accredited providers does not fall short of that of unaccredited service providers. That is, it is arguable that the performance information of public-type (or Seoul-type) childcare centers in Korea may raise parents’ positive expectations of accredited providers’ service quality. This study relies on the idea that citizens’ expectation is raised by provision of information about the excellent performance and lowered by information about poor performance (James, 2011). Based on this proposition, this study claims that citizens’ awareness (perception) of a service provider's accredited status is critical as it helps strengthen the positive accreditation–satisfaction link. On the other side of coin, citizens’ limited recognition of accredited provider status may attenuate the link in practice. More specifically, we expect that citizens who are aware that their selected provider is accredited may award high marks to publicly accredited organizations compared to others who may not be aware of a provider's accreditation status. Seen in this light, our hypothesis is as follows:
Hypothesis 2: Citizens are more satisfied with public service organizations recognized as accredited, than others unrecognized of their service providers’ accreditation status.
Relationship Between Accreditation and Satisfaction Across Provider Type
As noted earlier, accreditation programs are designed not only as a signal to citizens that there are consequences for organizations’ performance, whether good or bad, but also as inducements to private-sector service providers that can elicit high-quality performance. In furtherance of these intended policy directions, previous research has examined policy outcomes related to accreditation policies and some empirical evidence has demonstrated that so-called technical factors such as potential economic gains from accreditation tend to play a greater role than institutional factors (e.g., increased legitimacy) in influencing the responsiveness of private organizations, as opposed to public ones (e.g., Casile & Davis-Blake, 2002). That is, private organizations may opportunistically exploit the accreditation system, placing a higher priority on the resources they can secure from engaging in the process than on the opportunity to improve their service quality (Bekkers, 2003; Carman & Fredericks, 2013; Feng et al., 2016). This is because after receiving accreditation, it may be easier for service providers to build their reputations and collect funds such as user fees (e.g., kindergarten tuition) or donations from the public, not to mention government grants, than it is for their unaccredited counterparts. This raises the question: do different types of service providers—nonprofit versus for-profit—respond to the accreditation policy in the same way? This line of inquiry has also led us to consider that the gap between citizens’ evaluations of accredited and unaccredited providers may vary depending on the organizations’ sectors. Thus, in this study we perform a cross-sector comparison of users’ evaluations of childcare organizations.
In the existing public administration research, a considerable proportion of previous studies has differentiated nonprofit and for-profit providers within the private sector and compared performance across these two types of organization in a range of service areas. In various social service contexts (e.g., healthcare and education), scholars have focused attention on nonprofit organizations due to governments’ increased reliance on these providers to deliver public services on a contract basis or via collaboration. There is strong evidence that citizens are more likely to patronize public or nonprofit organizations compared to for-profit ones (e.g., see Drevs et al., 2014; Eggleston & Zeckhauser, 2002; Handy, 1997). One of the underlying logics behind this finding might be found in Hansmann's (1980, p. 838) description of a nonprofit provider as “an organization that is barred from distributing its net earnings.” According to Hansmann (1980), in the area of daycare services, parents are likely to turn to nonprofit providers, believing that these are less likely to abuse their trust. Likewise, until recently, the nonprofit literature has tended to emphasize the favorable pro-organizational aspects of nonprofits, which may act as equal partners or stewards in the public service delivery setting (Kim, 2017; Van Slyke, 2007). In turn, it has been widely discussed that unlike their for-profit counterparts, nonprofit providers have greater incentives to seek quality improvements or achieve better program outcomes due to their altruistic missions rather than engaging in cost-minimizing behaviors to maximize profits (Amirkhanyan, 2010; Eggleston & Zeckhauser, 2002; Weisbrod, 1978).
In our examination of the accreditation system in the Korean childcare market, we apply the above reasoning and a general expectation that citizens will have positive attitudes toward nonprofit providers. It seems reasonable to note that the services provided by nonprofit providers are likely to meet or exceed citizens’ (parents’) expectations, which in turn would induce positive evaluation of their performance. However, given that our main focus here is citizens who are aware of their providers’ accreditation status (e.g., if their selected childcare centers are accredited or unaccredited) and organization type (nonprofit versus for-profit), we claim that the accreditation of nonprofit providers can rather lower the level of parents’ satisfaction, since their expectations of nonprofit providers start out higher. For example, if parents are aware that their selected service provider (e.g., a private daycare center) is publicly accredited and for-profit, their satisfaction is likely to be higher than that of parents who are aware that their for-profit daycare center is unaccredited. Yet, this association is less likely to happen in the case of nonprofit daycare centers. This is because a citizen who is aware that their nonprofit daycare center is accredited may have much higher ex ante expectations of the service quality than a citizen who knows that their nonprofit daycare center is unaccredited. In other words, the actual service quality of the accredited nonprofit provider may not exceed the parents’ high initial expectations, thus the level of the parents’ satisfaction will not be necessarily (subsequently) heightened via accreditation. Parents’ perceptions of their providers may depend on the providers’ sub-sectors. Accordingly, we hypothesize that:
Hypothesis 3: The relationship between citizens’ awareness that a public service organization is accredited and their satisfaction with its services varies according to whether the public service organization is nonprofit or for-profit.
Data and Methods
Data Source
We focused on the Korean public childcare sector, one of the key public service markets in the country. Our empirical analysis is based on the secondary data source named the 2018 Nationwide Survey of Childcare and Early Childhood Education collected by the Korea Institute of Childcare and Education (KICCE). The survey was completed as 100% response rate 5 as planned, which means it has no response bias so increases the representativeness of targeted population (MHW & KICCE, 2018a). In addition, the survey of childcare is regarded as a comprehensive investigation on a national scale because it includes data from interviews with households (mostly homeowners) with young children and it includes all childcare facilities in operation at the time of the survey. Notably, this dataset enabled us to distinguish survey respondents depending on their degree of awareness of their childcare service providers’ accreditation status, providing more realistic results for our inquiry and advancing a more nuanced understanding of the drivers and barriers to satisfaction with services.
Measures
In the specific context of the Korean childcare accreditation system, we assume that the government assesses various dimensions of the services provided by participating organizations, including financial, operational, and technical aspects of the services that reflect the organizations’ competency and integrity, and then formally recognizes those that meet its standards (by granting them the “public-type” label). Given this context, we decided to assess diverse elements of the service providers in our measurement of the main variable (here, citizen satisfaction with childcare services). We use multivariate regression analyses with factor analysis for our dependent variable, citizen satisfaction, rather than an ordinal logistic or ordered probit regression. 6 This allows us to provide relatively straightforward results while capturing complex aspects of the continuous variable.
Dependent Variables
Acknowledging that there are multiple specific dimensions of the performance of private-sector organizations (e.g., childcare centers) in practice, we treated parent-users’ satisfaction with the childcare services they receive as a multidimensional concept. In this regard, we first constructed a measure for overall citizen satisfaction with the services using survey questions covering 10 items as follows: (1) staff (including principals and teachers), (2) neighborhood environment, (3) educational facility condition (e.g., teaching materials and aids), (4) cost (e.g., fee), (5) health management, (6) food management (e.g., meal services), (7) safety and security management, (8) curriculum, (9) counseling and guidance service, and (10) parent participation and education (e.g., training). Given these questions, respondents were asked to rate their satisfaction with each item on a five-point Likert scale ranging from 1 (very dissatisfied) through 5 (very satisfied). To develop an index variable (here, Overall satisfaction) with these items, the principal component analysis method and varimax rotation method were applied (Cronbach's alpha coefficient of .934).
In addition, as in previous studies that have considered diverse elements of services across types (e.g., Bolton & Drew, 1991; Chan et al., 2021; Grönroos, 2000), 7 we compartmentalized childcare services into two general categories as follows: core services and facilitating services. While the former category includes primary and basic care services that should correspond to public childcare services, the latter represents essential yet secondary services that make it possible for citizens (parents) to consume a particular core service. In the Korean context, we counted the following five items as core services as follows: staff, safety and security management, curriculum, counseling and guidance, and food management. The facilitating services consisted of five items as follows: neighborhood environment, educational facility condition, cost, health management, and parent participation and education. Such a two-way classification allows for a close look at whether the relationship between accreditation and satisfaction varies depending on childcare service performance. To create two additional index variables (Core service satisfaction and Facilitating service satisfaction), we ran a principal component factor analysis along with the varimax rotation method (Cronbach's alpha coefficients of .907 and .861, respectively).
Explanatory Variables
It is important to note that since in practice not all consumers are capable of discerning their service provider's accreditation status, acknowledging whether the services selected by a user are provided by a publicly accredited provider may affect the user's evaluation of the service performance (quality). We thus incorporated parents’ awareness of the accreditation program, which designates well-operating private-sector childcare service providers as public-type organizations and supports them financially, into the model. This was measured using the following survey question: “Is your selected service provider is an accredited childcare center as a public-type provider?” For coding of this indicator, Accreditation status, we employed a trichotomous measure based on the original responses to the question, including 0 (do not know my selected service provider's accreditation status or generally unaware of the public-type accreditation system itself), 1 (aware that the center is unaccredited), and 2 (aware that the center is accredited). For this categorical variable, 0 is the reference level, and 1 and 2 are named Unaccredited and Accredited, respectively. In our model, responses pertaining to both public-type childcare centers and Seoul-type centers are combined in the Accredited variable.
In addition, this study analyzed citizen satisfaction with service quality by sector. According to provision #10 of the 1991 Childcare Act, the Korean childcare service market allows seven different types of service providers: (1) national-public (generally known as “public”) providers, (2) social-welfare cooperatives, (3) partly cooperative organizations or associations, (4) employer-supported providers, (5) cooperatives, (6) private home providers, and (7) private home centers. For the analysis, we reclassified these provider types, narrowing our focus to two within the private sector (differentiated by Organization type) as follows: nonprofit providers (combining types 2 and 3) and for-profit providers (combining types 6 and 7). It should be noted that our sample excluded respondents who used types 1, 4, and 5. Childcare centers belonging to type 4 have not been officially admitted to the program, as they are already supported via employment insurance according to relevant laws, while data on type 5 centers were not collected by the survey.
Lastly, in terms of control variables, this study takes into account the individual socioeconomic status of parent respondents, including family size, household income, education level, and household type, and the model also includes regional fixed effects to control for the latent impacts of regional autonomous status. Measurement information for all research variables included in the empirical model is summarized in Table 1.
Measurement of Research Variables.
Results
Table 2 presents the descriptive statistics and correlation matrix of the research variables and Cronbach's α. As Table 2 illustrates, the main research variables (per each dependent variable) were correlated with each other with no suspicion of multicollinearity. It also should be noted that before running the regression analyses, we conducted some additional diagnostics to check for potential methodological (e.g., endogeneity) problems that could influence the results, such as heteroskedasticity, outliers, and omitted-variable bias. These checks did not reveal any potential concerns that affect our empirical analyses. 8
Descriptive Statistics and Correlation Matrix of Variables.
Note: Cronbach's α in parentheses. N = 1,336; ***p < .01; **p < .05; *p < .1; 275 (20.6%) households recognized them as unaccredited, 659 (49.3%) households recognized their providers as accredited, and 402 (30.1%) households unrecognized their providers’ accreditation status out of 1,336 households.
Models 1, 2, and 3 are the baseline models pertaining to Overall satisfaction, Core service satisfaction and Facilitating service satisfaction, respectively, with control variables. In Models 4, 5, and 6, we tried to focus on three different citizen satisfaction indicators of nonprofit service providers in sequence, while in Models 7, 8, and 9, we closely examined those of for-profit service providers.
With regard to the context of nudging via accreditation, somewhat contrary to our earlier expectations, the results in Table 3 show that Hypothesis 1 was not supported when Unaccredited and Accredited organizations were compared (see Models 1–3). In addition, concerning a symbolic impression of accreditation, Hypothesis 2 was not supported due to the statistical insignificance of the association between citizens’ awareness of their service provider's accredited status and their satisfaction with their service provider. As we mentioned earlier, in 2018, approximately 91% of all childcare providers were private-sector organizations (MHW & KICCE, 2018a), and of these private-sector childcare providers, just over 15% had received public-type accreditation (MHW & KICCE, 2018b). Thus, it is possible that most citizens would assume that a given childcare center (hitherto unknown to them) is unaccredited. However, it should be noted that when we unrecognized childcare centers (those whose accreditation status was unknown to citizens), the coefficients on the accredited group as a base of the unaccredited group were positive and significant in models other than the nonprofit subgroups (see Appendix A). Thus, the direction of the accreditation–satisfaction link (i.e., the statistically insignificant yet positive signs of the coefficients on Accredited in Models 1–3) leads us to suspect that citizens might be more satisfied if they knew more about service providers’ accreditation status. This requires further investigation.
Results of Multivariate Regression Models.
Note: ***p < .01; **p < .05; *p < .1; Core service satisfaction (five items): staff, safety and security management, curriculum, counseling and guidance, and food management. Facilitating service satisfaction (five items): neighboring environment, educational facility condition, fee, health management, and parent participation and education.
Alternatively, the nonsignificant coefficients for Accredited in Table 3 could suggest that publicly accredited private-sector providers do not necessarily produce higher levels of citizen satisfaction. Thus, one could argue that the current accreditation system, which is intended to capture the characteristics of high-quality service, may not sufficiently reflect the characteristics that parents need or prefer in their childcare services. Ironically, this would imply that while accreditation is widely expected to deliver important information that citizens can trust and act upon, in reality a majority of citizens might still lack critical information about the actual quality of the services offered by providers. This observation indicates that knowing providers’ accreditation status does not tell the average parents much about the unobserved quality attributes of childcare centers beyond what they have inferred from a firm's reputation.
In terms of the Organization type variable, our results confirm Hypothesis 3. As indicated in Models 1–3, when services are provided by nonprofit providers rather than for-profit providers (Nonprofit), parents’ overall evaluations of service performance (Overall satisfaction), core services (Core service satisfaction) and facilitating services (Facilitating service satisfaction) were higher (β = .084, p < .05 in Model 1; β = .074, p < .01 in Model 2; β = .094, p < .05 in Model 3, respectively). The results reveal that in the current childcare service market, citizens generally have positive attitudes toward nonprofit organizations, regardless of their accreditation status. This seems to be in accordance with the previous observation that nonprofit providers are viewed as trustworthy agents in social service markets (e.g., Drevs et al., 2014; Eggleston & Zeckhauser, 2002; Handy, 1997; Hansmann, 1980). However, when we divided the sample into two different sub-sectors (nonprofit versus for-profit service providers), we found different patterns in the accreditation–satisfaction link for nonprofit subgroups versus for-profit ones. Specifically, in Models 4 and 6 pertaining to nonprofit providers, the coefficients of Unaccredited were insignificantly negative yet the coefficients of Accredited were negative and statistically significant (β = −.266, p < .05 in Model 4; β = −.367, p < .05 in Model 6, respectively), indicating that Overall satisfaction and Facilitating service satisfaction were lowest among citizens who received services from nonprofit providers. When comparing only Accredited and Unaccredited groups, the coefficients of Accredited were statistically insignificant (see Models 4–6 in Appendix A). On the other hand, when the analysis was limited to for-profit providers as in Models 7–9, we found that the coefficients of Unaccredited were not significant and were inconsistent in their direction. However, the coefficients of Accredited were positive and statistically significant for all three service items (β = .145, p < .01 in Model 7; β = .122, p < .05 in Model 8; and β = .168, p < .01 in Model 9), indicating that Overall satisfaction, Core service satisfaction, and Facilitating service satisfaction, respectively, were highest among those who received services from for-profit providers. When comparing only the Accredited and Unaccredited groups, all coefficients of Accredited were positive and statistically significant (see Models 7–9 in Appendix A).
Taken together, such interesting findings of Hypothesis 3 suggest that while citizens (here, parents) tend to evaluate nonprofit providers more positively than for-profit ones, their satisfaction with the services provided by accredited nonprofit providers is likely to be lower than with those provided by unaccredited nonprofit ones, in contrast to their evaluations of for-profit providers. This appears to lend support to our argument that parents’ ex ante expectations of accredited nonprofit providers are higher than their expectations of unaccredited nonprofit providers, thereby decreasing the likelihood that their ex post evaluations of the services provided by the accredited nonprofit providers would be positive.
As we proposed earlier, these discrepancies can be explained based on expectancy-disconfirmation theory. In practice, due to the altruistic mission of nonprofits, citizens may have higher expectations of them. However, in line with Van Ryzin (2006), satisfaction hinges on whether the actual service quality or performance exceeds expectations or falls short of them. That is, when citizens have higher expectations of nonprofits or hold them to higher standards, especially citizens who know these service providers are publicly accredited, they may be easily disappointed with the accredited nonprofits’ services. Another explanation is suggested by agency theory. Because participation in the accreditation system for Korean childcare centers is voluntary, leading to selection bias, nonprofit and for-profit organizations may respond similarly to the system's incentives. For example, contrary to the policy's intentions, accreditation may cause opportunistic behavior among nonprofit providers, given that these organizations are dependent on government grants as their primary source of funding. It may be that some financially-disadvantaged nonprofit providers (e.g., small or new ones) with low organizational capacity are more likely to voluntarily participate in the accreditation program. In the worst scenarios, organizations may opportunistically exploit the tax advantages of accreditation or their image as trustworthy partners of government to secure resources such as enhanced reputation or financial support. Relatedly, it is possible that after obtaining accredited status, some nonprofit providers might stop improving their quality, perhaps due to decreased competitiveness vis-à-vis the for-profit market.
We cautiously suggest that the second explanation may be less relevant in this context. Previous studies of public childcare in Korea have observed that accredited organizations outperform unaccredited providers. For example, the teachers who work for public-type childcare centers express greater job satisfaction and organizational commitment, which produces higher quality childcare (Kim & Kim, 2013). Public-type accreditation is positively associated with individual citizens’ intentions to use the same service again (Lim & Kim, 2014), and public-type accredited providers are fairly well financed via user fees, compared with unaccredited providers (KICCE, 2016). In line with these studies, our underlying argument is based on the assumption that the performance of accredited providers does not fall short of the performance of unaccredited providers. Thus, we explore how parents’ different expectations of the distinct sub-sectors of private childcare centers (nonprofit versus for-profit) could make a difference in their satisfaction. Of course, the related result may warrant further investigation with more in-depth analysis based on contextual information (e.g., by adding more available variables to the empirical models) or data gleaned from interviews.
With respect to the control variables, family size had no significant association with satisfaction in any model. Household income was statistically insignificant in Models 1–3, but its coefficients were positive and statistically significant in the Models for the nonprofit subgroup (β = .074, p < .05 in Model 4; β = .085, p < .05 in Model 5; and β = .063, p < .1 in Model 6), and household income also had a significant yet negative impact on satisfaction in the Models for the for-profit subgroups (β = −.112, p < .05 in Model 7; β = −.093, p < .1 in Model 8; and β = −.132, p < .01 in Model 9). In addition, despite partial support, the results of parents’ education level indicate that both parents who were educated at the middle and high levels tend to have negative evaluations of private-sector childcare services compared with less educated parents. Yet, regarding the household type, we found that citizens having a dual-income family are likely to provide positive evaluations of service providers.
Discussion and Conclusion
This exploratory study investigated underlying contextual factors that have been underexplored in the existing literature and answered why there is some degree of incongruence between objective and subjective measures and how these two different performance indicators converge in the data. To deeply probe the issue, this study focused on the Korean childcare market, and in particular one of the objective measures of organizational performance, the current public-type accreditation policy, which enables private childcare service providers to be seen as equivalent to public ones under direct government supervision. Given that the accreditation system is not immune to the principal-agent problem, however, we also examined citizen satisfaction as a subjective yet important indicator of service providers’ performance that can be used to gauge the effectiveness of the current public policy. This investigation is important to reveal how objective and subjective performance measures should be interpreted together as accreditation is implemented in the long term. Using multivariate regression analyses of citizen satisfaction, we tested our hypotheses and found evidence that in the aggregate, the current accreditation system in Korea has a somewhat limited positive association with citizens’ satisfaction with private-sector service-delivery organizations.
Our findings suggest that there is the gap between objective and subjective performance measures for public service organizations. In other words, there is arguably no guarantee that the current accreditation system can sufficiently ensure citizens’ positive evaluation of accredited service providers. This evidence closely parallels the observations made in prior research dealing with the potential of citizen satisfaction surveys as an indicator of service performance (e.g., Kelly, 2005; Kelly & Swindell, 2002; Stipak, 1979). But interestingly, unlike prior studies that exhibited positive and favorable views of nonprofit service providers (e.g., Drevs et al., 2014; Hansmann, 1980; Kim, 2017; Van Slyke, 2007), the findings indicated that accredited nonprofit childcare centers may be poorly evaluated by parents, possibly due to parents’ higher expectations of these providers. Overall, the evidence from this study demonstrates more nuanced understanding that the current quality accreditation system does not necessarily correct the asymmetric information received by service users.
Acknowledging these challenges in utilizing the accreditation performance measures, this study provides some practical implications. An accreditation program must be grounded in a realistic and sophisticated understanding of how and when it can feasibly apply institutional pressure or produce symbolic effects for stakeholders (including both service users and providers), specifically effects that are connected to intended outcomes. The assumption that there are benefits from accreditation suggests that citizens will be satisfied with their providers if they believe that accreditation improves the service or reflects superior service. However, in cases where actual good or improved performance fails to meet citizen expectations in practice, one can argue that the problem might be driven by not the providers but individual citizen's perceptions, such that some citizens evaluate the performance in a way that contradicts objective measures of the same performance.
When considered together, it seems that governments and policymakers must endeavor to bridge the gap between the two types of performance measures, perhaps by further investigating citizens’ satisfaction with accredited providers. For instance, they may want to determine whether the accreditation policy has provided misleading information or negative impressions to citizens, which could induce inappropriately high or low expectations of accredited providers. It is important to ensure that potential and current service providers do not lose their motivation to achieve accreditation and instead are encouraged to bring their performance in line with professional standards and ethical principles of practice. This is because without proper follow-up that provides a safeguard against poor performance, there is a risk that childcare centers may seek accreditation in a strategic way that is not aligned with the public interest, or that high-performing service providers will see little value in pursuing public accreditation. In this regard, the criteria for accreditation must allow all potential and current private-sector providers to compete fairly. If this is accomplished, it can be expected that providers will be willing to provide honest information about their experience, expertise, or performance capabilities in order to become accredited. Thus, in the real world, proactive or mandatory participation in the accreditation system is a proposal that deserves careful consideration.
Furthermore, particular attention should be paid to improving the current outreach efforts related to the accreditation policy. For example, parents’ feedback should be taken into account by policymakers during the accreditation renewal process, and citizens should be better informed of the criteria for accreditation, including updates to the process and its outcomes (e.g., scorecards or rankings of the quality and the accreditation status of service providers available on public websites). This is important to minimize the likelihood that citizens are put at risk for neglect or exploitation if service providers misrepresent their qualifications. This is reminiscent of Kelly and Swindell’s (2002) argument that “[o]utreach efforts such as satisfaction surveys could increase citizen awareness and satisfaction with public services” (p. 611).
This study contributes to the existing literature in a few notable respects. First, in the field of public administration and policy, as noted earlier, little attention has been paid to the incongruence between quality accreditation policies and citizens’ satisfaction with their providers, and previous evidence about the effectiveness of accredited versus unaccredited providers has been mixed across sectors, in terms of citizen satisfaction. Until recently, studies have typically dichotomously categorized service providers by their accreditation status, and investigated accreditation-related outcomes at the organization level. These studies have likely missed some factors that could explain how citizens evaluate their accredited providers. It is important to ascertain whether citizens’ recognition of providers’ accreditation status relates to their satisfaction, either negatively or positively. The implications for accreditation policies are worthy of scholarly attention and also have practical value. It is necessary to determine whether accreditation is a guarantee of high quality or a protection against low quality providers from the citizen's point of view, regardless of the policy's effect on providers. Taking into account all these perspectives, this study thus helps fill the void in the existing literature: (1) by revealing how citizens evaluate accredited providers at the individual level, a topic neglected in the literature; (2) by adding more realistic evidence via rigorous empirical approaches to ascertain how citizens’ awareness of providers’ accreditation status is linked to their satisfaction with the services they receive and further how this relationship varies by provider sector; and (3) by calling for continued inquiry into the policy effectiveness of accreditation and providing insight to policymakers as to the primary stakeholders’ (here, citizens’) perceptions of the policy on the basis of their experience and how these are important for the successful implementation of the accreditation policy in the long term.
More specifically, it is notable that the present study is one of the first to link citizens’ recognition of their providers’ accredited status and subsequent changes in their expectations to sectoral differences by investigating citizens’ satisfaction with the service performance of nonprofit versus for-profit organizations. In this sense, the study enriches the literature and encourages continued inquiry into opportunities to strengthen the performance and accountability of private-sector service providers. Furthermore, unlike previous studies that have tended to simply describe the current situation using t-tests (e.g., Beaulieu & Epstein, 2002; Heuer, 2004) or structural equation models (e.g., Park & Cho, 2019), leaving some missing factors unexplored, this study uses an estimation model that employs a set of variables measuring different aspects of service quality in our multivariate regression analyses (here, overall citizen satisfaction with both core services and facilitating services), not to mention one main independent variable (here, Accreditation status) that was measured using a three-way classification. All in all, this study provides a more nuanced understanding of the factors and conditions that contribute to the effective design and implementation of accreditation policies when governments collaborate with private-sector organizations.
There are a few caveats to the findings that can inform future research. First, because our analyses were based on self-reported data that all came from the same survey (making it subject to common method bias), 9 caution is required in generalizing the results beyond the given context. Replication of this study in other locations and service areas, or using additional data, is needed to verify our findings. Second, there are possible alternative explanations for the findings. For example, it may be the case that citizens’ degree of satisfaction encourages awareness of their service providers’ accreditation status. Future studies could thus employ longitudinal data to identify a stronger causal pathway. Likewise, there are individual-level factors such as families’ number of children, their ages, how the parents found the childcare center (e.g., via word-of-mouth, provider network, or online/website) and their child's number of years of attendance that could affect citizens’ expectations and satisfaction, in addition to organization-level factors such as its size, age, and so on. Future studies should thus consider such latent variables that were not accounted for in this study and capture their dynamics using more comprehensive models, including those based on longitudinal data. Next, as mentioned briefly, we carefully assumed that the unrecognized groups are mainly composed of unaccredited providers based on the empirical literature on this context. However, future studies may need to consider including more information on how many unaccredited providers remain unrecognized by citizens in the models. In doing so, it is expected to closely investigate the related process from which the discrepancies emerge and further help distinguish symbolic impressions from institutional pressures of accreditation. Furthermore, it is notable that in this study, we focused on private-sector organizations. If related data were available, it might be interesting to include information on government-run organizations (public childcare centers) in the empirical models and examine closely paired organizations from different sectors (public versus private) to ensure that comparisons are made between competitors at the aggregate and sectoral levels. Lastly, we admit that in practice, the performance of public service organizations, regardless of their sub-sector type (nonprofit versus for-profit), is a multidimensional concept that can be interpreted differently by diverse stakeholders, including policy beneficiaries, the general public, interest groups, and even contractors. Therefore, for the program to provide customized information that would be valuable to parents as they select childcare providers, extensive evaluation of the centers by multiple stakeholders would be needed. This might require in-depth interviews with parents, the staff of childcare centers, and government officials, which could be compared and synthesized to provide new insights for policy development via future research.
Supplemental Material
sj-docx-1-arp-10.1177_02750740231193431 - Supplemental material for Understanding Gaps Between Objective and Subjective Performance Measures: Accreditation of Public Service Organizations and Citizen Satisfaction
Supplemental material, sj-docx-1-arp-10.1177_02750740231193431 for Understanding Gaps Between Objective and Subjective Performance Measures: Accreditation of Public Service Organizations and Citizen Satisfaction by Jae Bok Lee and Soojin Kim in The American Review of Public Administration
Footnotes
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: Kim's work was supported by the Singapore Ministry of Education (MOE) (grant number Tier 1 Grant RG 117/20). Lee's work was supported by the research grant of the Gyeongsang National University in 2022 and the grant from Institute of Human Rights and Social Development of Gyeongsang National University (HRSD-2023-A-003).
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