Performance Management Bsc

Performance management in government and public services – balanced score card

An organization is akin to a human being. It has a life. It is born, it grows, matures, ages and dies or transforms during its life time. It goes through businesses and economic cycles of boom and bust, growth and recession, just like individuals / families go through highs and lows in life. It is a living system. It has several parts (subsystems), dimensions of performance, demands, expectations, shortcomings, special strengths and weaknesses, which may vary with time. It has to live in the business environment just like human s have to live in the society composed of fellow humans and also members of other species. It gets opportunities to exploit and enjoy and also have to live with threats from fellow beings or species of a different kind. An individual has several capabilities not all of them equal in their degree or across various individuals. There may be individuals who are competent in mathematics but poor in sports or arts, there could be someone who is a great scientist but has simply unacceptable manners, grooming, dress sense, appearance and behavior. Some are very easy going, social animals, liked and appreciated by many in society. Others may be morons and are just matter of fact, official, rigid. Organizations and individuals exist and grow in this complex environment where all these attributes / subsystems coexist and are necessarily needed for one attribute / subsystem to function, just like individuals need all the subsystems like respiratory, circulatory, sensory, and digestive and so on, for their healthy existence. A balanced functioning of these several subsystems enable the individual to live. Similarly, there is a great amount of interdependency among various subsystems / departments / functions, whose cohesive and synchronous functioning alone will enable the organization to move forward in pursuit of its objectives. Organizations perform due to the collaborative and synchronized functioning of the finance, HR, marketing, technology, production, subsystems.

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One cannot have an individual whose only competency is mathematics, as for him to use his competency he necessarily has to communicate with other people, get their support, and convince them and so on. One cannot therefore assume a unidimensional assessment of an individual and typecast as good, bad or ugly. On the similar lines organizations have a multidimensional character reflected in their several functional areas. Only a well orchestrated functioning of the various subsystems allow the organization to progress. Assessing the health of an organization has to take into account the contribution from each subsystem and their coordinated functioning. A balanced score card helps assess the health of the organization as an organization, collectively. Compare a cricket team that has batsmen, bowlers, wicket keeper, fielders, captain and team manager. Each if these is an asset to the team individually, but the team will win the match only if there is a balanced contribution from and coordinated functioning of the various experts. Similarly, the organization’s performance has to be seen distinctly from the individual functional area performance such as finance, market share, employee strength, image, alone A balanced score card recognizes the vision, mission, goals of the organization. It also recognizes the drivers of competitive advantages for the organization that may be industry specific. For instance, in the knowledge/service industry, the role of the HR department assumes great significance while in a trading business it could be working capital management and merchandising functions. In a high technology industry such as engineering, it could be the technology group and their functioning, say the no. of patents registered. Similarly, the top management may have their own managerial vision, value systems and priorities. For instance, some organizations attach great importance to employee care and retention, while others are hungry for market share and PAT. Some may be focusing on short term financial objectives such as profitability every quarter, while others may focus on working towards gaining a strategic advantage over a three year horizon. Depending on the nature and line of the business, the strategic thinking and organizational values, priorities, the inter se weight age attached to various performance parameters in the BSC could vary.

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To measure organizational performance, once also has to ask ‘on what performance parameter’? The various performance parameters are expected to sync to enable the organization to grow. Some of the performance measures are quantitative , whereas some are qualitative (collected through measurement of perceptions). It may also be necessary to develop indices for measuring performance of each performance parameter, for instance % growth in monthly sales, market share, and % of employee separations in the last month,…. The expectations of various stakeholders are not necessarily aligned. It could even be in conflict with each other. In such a scenario, for one to assess organizational performance, one has to adopt a balanced approach to rate an organization against its own industry peers or across all organizations. All organizations whether they are in business or government, exist to meet certain expectations of their stakeholders. All operations of organizations across industry / service / objective categories, are governed by three common dimensions : input , process and output. Therefore, at a high level, it would suffice if we measure these key parameters and assign weight age to each factor based on the assigned priority and reduce it to a common index to rank / rate organizations on a uniform balanced yardstick. The factors considered and weight age assigned reflect the priorities of the evaluators. A balanced scorecard is an excellent normalizing tool to assess how in a balanced manner organizations are able to meet multi stakeholder expectations. A balanced score card also ensures that organizations maintain a sense of balance while acting in pursuit of their stated / unstated objectives. The focus is not sitting in judgment over what objectives organizations should pursue and how do the various objectives rank in terms of priorities attached. On the other hand, the focus is on highlighting the need for a holistic approach to an assessment and evaluation of performance vies-a- vies a narrow approach, whereby some stakeholders interests get more attention in comparison with that of others. For eg. One can over focus on achievement of shareholder interests through EPS. This may jeopardize the interests of employees

whose wages get cut to make

more earnings to shareholders. Over emphasis on profitability may also result in 3

poor tax compliance or using means that are not necessarily legally and ethically acceptable. A balance growth supports long term sustenance, sustained positive, brand value, enables attract employees, suppliers and customers as also a positive attention from regulators. In the long run, image and brand value as a good corporate citizen carry much higher, market value than PAT, EPS, share price in the market. The value of a balanced growth and hence a BSC have been well recognized among global corporations as a good growth strategy. The BSC also helps to effectively communicate management’s priorities and help implement the same through appropriate relative weight ages assigned in the BSC. Let us now look at what are the elements of the balance score card, how are these data identified, collected, measured, analyzed, ad arrived at as a BSC to reflect organizational standing. BSC as a performance monitoring tool for government organizations / public services The government and the public services sector has been at the receiving end of management practitioners, the citizens, media as well as the policy makers. Performance management in government has also been the subject of criticism and debate at the highest levels such as the PMO, the Planning commission, the CAG, several committees, the various consumer grievance redressal fora. Is it because the stakeholder expectations are unrealistic, diverse, not stated / known clearly to the service providers, we use in-appropriate yardstick to measure performance, lack of clarity on what performance is among the decision makers and employees in these organizations, they do not have realistic infrastructure / support system to deliver, incompetency among the employees, lack of involvement / indifference of employees, inappropriate inventive and disincentive to direct efforts towards achievement of goals / work towards defined performance measures or a combination of these? Is it that all government organizations providing varied services / performing varied roles are victims of perception of low performers? Is it that the gap in the 4

expectation / delivery mismatch has a common pattern for organizations performing similar roles such as ULBs, Revenue departments, Utilities, law enforcement agencies, administrative departments, PSUs in business? Is it that everyone is complaining including the service providers, citizens, policy makers,….and if so, it appears there is no clarity on what to expect, who is to deliver, how do you measure performance, .. or these are not uniformly understood and communicated and also used for measuring performance and publishing the same for dispelling myths. I sit also that in this cacophony, there are certain elements are rejoicing over the opportunity to benefit themselves at someone else’s cost? It is possible to address this complex scenario through performance management systems such as BSCs in government. In fact the BSCs are more

relevant

for

the

government

than

the

private

sector

which

apparently exist for commercial benefit as their super-ordinate goal, while the govt. exists to achieve society’s goal that are more complex, diverse, all encompassing, cannot choose their customer - the citizen, … Also since the government’s outputs are not measured in monetary / tangible terms such RoI, EPS, market share,…the value of the service rendered is also not visible. In fact, for many government organizations, their presence may not be felt, but their absence will be, for eg. The Police department. In this scenario, it is

possible for using tools such as the BSC for

assessing performance of the department, unit at any level. The BSCs will be able to define performance expectations, measures weight ages, data sources and collection methods, verification and data analysis, result aggregation and arriving at indices for the BSC, comparison across organizations, units, geographies, services, as well as longitudinally over time. This approach will force definition of objectives, means, priorities, performance parameters and measures, and thereby transparently share the results and feedback to all stakeholders. Sharing

of

the

BSC

indices

and

discussing

on

varying

levels

of

performance with all stakeholders will provide a forum and method for bringing in clarity on expectations as well as performance diagnostics. We 5

believe that the approach will help bring in transparency, professionalism and logically tread towards higher levels of expected performance. It will also help reduce scope for corrupt practices and active participation of stakeholders. The objectives, expectations and parameters themselves can be arrived at through a consensus process involving all stakeholders so that the buy in / taking ownership for the action points from the deliberations can be ensured.

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