Performance in complex, hierarchical government organizations: A comparative study
Data/Methods: Over the last twenty years, new public management (NPM) has inspired managerial reforms in public sectors worldwide. The U.S. and Italian governments have embraced one of the main tenets of NPM, managing for results. We assess the introduction of performance management in hierarchical and complex public organizations in both countries, examining how and to what extent military organizations, the Italian Army (IA) and component of the U.S. Navy, implemented PBMSs. We compare the cases and identify key factors that enable or detract from effective implementation and use of a PBMS for large, complex, hierarchical public sector organizations. We find that not all factors previously identified as necessary determinants of a successful PBMS are significant.
Expected Results: Our initial findings appear to confirm the relevance of three key factors: an integrated financial system for tracking costs relative to outputs, technical knowledge and training, and organizational culture or institutional memory.
Both organizations lacked an integrated financial information system that would allow tracking and recording of costs of outputs. The lack of such a system prevented the organizations from identifying priorities across different organizational functions. Obligations (promises to pay) were normally used as proxies for cost. Costs of personnel (which are the largest costs for both organizations) were not included due to the inability to integrate them into the PBMS.
The second is a lack of technical knowledge, training, and general understanding of performance management across whole organizations. In both cases, the difficulty in creating a culture of understanding of the uses of and management “power” related to performance data resulted in sub-optimal decision making.
Finally, organizational culture plays a strong role in the successful implementation of a PBMS. In cases, organizations try to control and increase their budget appropriations using performance information. We find this focus on appropriations is rooted in the “memory” of the traditional bureaucracy.
The present research provides a starting point for understanding the factors that managers of large, hierarchical government organizations should assess in their attempts to manage performance. We contribute to the literature and practical use in government organizations by demonstrating some key features or characteristics of hierarchical, complex government organizations that enable or detract from the successful implementation of a PBMS.