Pages: 19

This chapter introduces the core themes of performance management. It situates performance as a contested concept within public administration, public policy, and public management and identifies the sequence of measurement, incorporation, and use. The discussion explores how performance management has evolved from New Public Management (NPM) reforms, which emphasized results-driven governance, efficiency, and market-based mechanisms, to more adaptive approaches that respond to criticism of NPM’s rigid performance management approaches. The chapter also outlines the structure of the book, organised around the process of purposeful performance measurement, tailored for the intended uses and effects of performance information and avoiding the unintended effects.

Pages: 18

This chapter defines and differentiates performance, performance measurement, and performance management, laying the conceptual foundation for understanding how performance information is used in public sector decision-making. It introduces the production logic model (inputs, activities, outputs, outcomes) and applies it to concrete cases. The chapter further explores how public value theory provides a substantive framework for a normative assessment of performance in all its dimensions. Differences between public and private sector performance are explored. The chapter highlights the challenges of measuring public sector performance, emphasizing measurability constraints, policy evaluation frameworks, and stakeholder perspectives.

Pages: 20

This chapter traces the historical development of performance measurement and management. It demonstrates that performance management ideas predate New Public Management (NPM) and have been central to public administration for over a century. The chapter explores major performance movements, such as the social survey movement, performance-based budgeting, and the evidence-based policy movement, which have shared a focus on performance information. The chapter also discusses how performance-oriented approaches expanded globally, culminating in the NPM reforms of the 1980s and 2000s that implemented performance management in the fine fibres of governance. The chapter concludes by discussing change and continuity in the performance movements.

Pages: 25

This chapter outlines the performance measurement process, detailing the five core steps: prioritization, indicator selection, data collection, analysis, and reporting. It examines the design parameters influencing measurement systems, emphasizing the choices within the five-step framework. Where should one begin measuring? What are effective indicators? What are the costs and benefits of various data sources? How can data be converted into information, and what are some reporting formats? The chapter also addresses measurement challenges, such as causality and concept reduction. The last section discusses the quality of performance management systems in terms of validity, reliability, and legitimacy.

Pages: 52

This chapter examines how performance information is incorporated into policy, financial, and contract cycles. Incorporation refers to the formal adoption of performance information within the established administrative systems, such as strategic planning, budgeting, and annual reports. The incorporation of performance information bridges the gap between performance measurement and actual use. Good incorporation can enhance the durability and impact of performance measurement. The chapter highlights different approaches to incorporating performance measurement at different stages in the policy, financial, and contract cycle. It also discusses some macro-level whole-of-government and whole-of-society approaches. The appendix to Chapter 5 provides real-life examples of incorporation.

Pages: 24

This chapter revisits the uses of performance information: learning, steering, control, and accountability and contrasts hard and soft uses, comparing formula-based performance management (e.g., contracts and sanctions) with interpretive benchmarking and dialogue-based performance improvement. The chapter further explores how the intended use of performance information impacts the design of the performance measurement process, drawing on examples from performance assessments in policing, healthcare, and higher education. It also questions whether performance measurement systems can fulfil multiple purposes or whether the uses are incompatible. A discussion on the political uses of performance information concludes the chapter.

Pages: 19

This chapter examines the primary users of performance information, including public managers, executive politicians, members of parliament, civil servants, and the media. It explores how user-specific needs and decision-making contexts affect the interpretation and application of performance data, including instances where information is not utilized. The chapter also examines barriers to effective use, including political incentives, organizational resistance, and the credibility of data sources. Case studies illuminate the role of performance information in governance and public service delivery. By taking an actor perspective, the chapter offers a realistic evaluation of what can be anticipated regarding performance information uptake.

Pages: 19

Despite the availability of performance information, many organizations fail to use it. This chapter examines the reasons behind non-use, distinguishing between technical, cognitive, cultural, and institutional barriers. It also explores how performance measurement can serve a symbolic function, providing legitimacy rather than actionable insights for policy and management decisions. The chapter builds on established cultural and institutional theories but presents new research of performance information use, including cases of performance management systems, such as those in the Netherlands, Ireland, and the UK, that prioritized compliance over meaningful use. The chapter concludes by highlighting the consequences of non-use, emphasizing that performance information only improves governance when effectively used.

Pages: 25

Performance measurement influences behaviour, often in unexpected and counterproductive ways. This chapter distinguishes between functional and dysfunctional effects, providing cases and evidence on how performance indicators have shaped public sector management in positive and counterproductive ways. It examines cases where performance targets led to gaming, manipulation, or perverse incentives, including the Soviet Union’s production quotas, the UK’s target-driven public sector reforms, and incentive-driven performance management systems. It also explores the dysfunctionality of ratchet effects, tunnel vision, and goal displacement. Strategies for mitigating dysfunctional effects include designing flexible, learning-oriented performance systems that balance accountability with discretion. The chapter concludes by emphasizing the need for designing context-sensitive performance management systems.

Pages: 21

The future of performance management demands both improved implementation and a fundamental rethinking of traditional approaches. This chapter explores how conventional performance management systems, shaped by New Public Management (NPM) reforms, struggle to navigate complex governance environments marked by uncertainty, crisis, and rapid change. It examines implementation issues and paradoxes in performance management, such as the tension between centralized control and decentralized decision-making by professionals or between having clear lines of accountability and sharing responsibility within networks. Additionally, it suggests some paths for a more fundamental transformation of performance thinking. Moving beyond rigid, metric-driven systems, the chapter advocates for adaptive, learning-oriented performance frameworks.