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4/5/12 PERFOR

MANCE MANAGE MENT IN PUBLIC SECTOR

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Outline
Performance Management Performance indicators Personnel performance appraisal Appraisal procedures and techniques Difference b/w public performance management Performance Auditing Performance Evaluation in Pakistan Suggestions Conclusion
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&

private

Performance Management

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Process of performance appraisal

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Personnel performance appraisal


Methods of Performance Appraisal

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Performance Indicators

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Performance indicators
Performance Indicators or Key performance indicators or Key Success Indicators are commonly used by an organization to evaluate its success or the success of a particular activity in which it is engaged. represent a set of measures focusing on those aspects of organizational performance that are the most critical for the current and future success of an organization
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Sometimes success is defined in terms of making progress toward strategic goals however often, success is simply the repeated achievement of some level of operational goal

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Types of performance indicators

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Types of performance indicators


INPUTS
Resources used to produce the goods and services Social value is acquisition cost measured by their

Performance criterion is economy-the timely acquisition of high quality inputs at lowest cost For a university, inputs would be teachers, 1111 administrative and other employees,

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outPUT S
The good or service itself Social value is approximated by the market price for the good or service, or for its closest equivalent service Performance criterion is efficiencyminimizing total input cost per unit of output For a university it would be number of graduates it produces
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Outcome s
Purpose that is achieved by producing the service Social value is difficult to access Performance criterion is effectivenessmaximizing outcomes in relation to the outputs produced For a university, outcome would be higher literacy rate
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Processe s
Manner in which inputs are procured, outputs produced, or outcomes achieved Value of good process inherently undetermined is high but

Are useful proxy for performance when outputs or outcomes cannot be defined very clearly Can be quantitative but mostly qualitative
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TYPES OF PERFORMANCE INDICATORS (SUMMARY)

Source: Public Management in Global Perspective By Salvatore Schiavo-Campo, Hazel M. McFerson

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Personnel performance appraisal

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4/5/12 Personnel performance appraisal

Personnel performance appraisal is the assessment of performance of individual employees Guide employees to make important contributions towards organizational goals Should be specific to the job and measure only observable behaviors Should be participatory and tied to long range organizational objectives

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Should promote a climate in which performance, achievements and difficulties can be discussed openly Critical importance of the cultural context should never be disregarded

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4/5/12 Appraisal procedures and techniques

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Individual Evaluation Methods

4/5/12 Performance appraisal techniques Multiple Person Evaluation Method Ranking Paired Comparison

Other Methods Performance Field Review

Confidential Reports Tests Essay Evaluation Technique

Critical Incident
Checklist Graphic Rating Scale Behaviorally Anchored Rating Scale Forced Choice Method MBO

Forced Distribution

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GRAPHIC RATING SCALE


Easy to develop All the desirable and undesirable behaviors are rated an a scale In ranking method all the behaviors are rated then ranked in any particular order

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GRAPHIC RATING SCALE

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Forced choice method


A performance appraisal in which the rater must choose between two specific statements about an employees work behavior Helps reduce supervisory simplifies comparisons biases and

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Forced choice method

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Essay method
In this method the supervisor make narrative comments about employees Oldest form of appraisal Time consuming and depends largely on supervisors' writing ability

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Essay method

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Objective method
Measure work performance previously set standards against

Most relevant in physical or technical jobs

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Critical incident method


A performance appraisal method focuses on key behaviores differentiate between doing a effectively or ineffectively that that job

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Behaviorally anchored rating scale


Performance appraisal technique that generate critical incidents and develop behavioral dimensions of performance. The evaluator appraises behaviors rather than traits.

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Behaviorally anchored rating scale

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Psychometric analysis
Based on psychological tests Valuable for first recruitment into occupation where personnel temperament is critical to good performance

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Feed back

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Managing poor performance


Handling of poor performance is the single most difficult aspect of performance management, especially in public organizations Incompetence or unwillingness to meet the job standards are the two main reasons of poor performance

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four sequential ways of managing poor performance 1. Early intervention counseling and informal of

2. Formal counseling with the help performance improvement plan 3. Follow up on the improvement plan 4. Sanctions

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Rewarding good performance

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The cream of good performance

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Setting the targets: benchmarking


The technique of comparing performance levels between organizations to identify opportunities for making improvements in the economy, efficiency and effectiveness of organizations performance

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Types of benchmarking

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Metrics benchmarking

Focus on calculation of numerical indicators, such as unit costs, response time, and number of customer complaints, which can then be compared with similar data from organizations from the same field. Helps to identify areas where it is less efficient

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Process benchmarking

Process benchmarking involves preparing process maps for the activities in the selected area of focus, collecting information on the resources consumed by those activities, analyzing the practices, working methods, and policies that determine the performance of those activities. Reveals obvious processes inefficiencies in the

Process benchmarking is also known as continuous improvement.


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Monitoring and evaluation


Monitoring is the regular tracking of inputs,outputs,outcomes,and processes in a given area of activity Evaluation is the systematic assessment of positive and negative factors affecting the performance Both are instruments accountability of statistic

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Monitoring is necessary for evaluation and ,and evaluation is to close the feedback loop and improve future performance based on the lessons of the 4141

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Managing performance around the world


Cultural context and social values have a great deal of influence on Nature of performance appraisal Manner of imposing sanctions Granting rewards Relative emphasis on group vs. individual achievements Selecting the best format performance appraisal to use in

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examples
Participatory style of management is acceptable in some countries while in others hierarchal values make it disregard to ask employees for ideas Most western countries accept the concept of performance evaluation ,some cultures interpret it as a sign of distrust or even an insult to an employee

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amir A hzad She

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Difference b/w public & private performance management


is a more difficult and controversial undertaking in the public sector than it is in the private sector. works best when there is clarity about what is being measured and managed, and why The private sector is driven by profit, so that success or failure can be measured in dollars and cents. Private companies exist to make a profit and create wealth for their owners and can look at profits, revenue, share-price, 4545

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Driven by the objective of improving peoples lives in ways that often cant easily be measured in dollars and cents For public servants and the public programs, there is often a lot of ambiguity over what the bottom line is. Ambiguity about the bottom line creates a situation that one never sees in the private sector: room for disagreement over what constitutes results and performance, and therefore, room for disagreement about appropriate performance measurement.
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Performance auditing
assessment of the activities of organization to see if the resources being managed with due regard economy, efficiency and effectiveness accountability requirements are being reasonably. an are for and met

an examination of a program, function, operation or the management systems and procedures of a governmental or non-profit entity to assess whether the entity is achieving economy, efficiency and effectiveness in the employment of available resources. 4747

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The examination is objective and systematic, generally using structured and professionally adopted methodologies.

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Performance auditing

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Performance auditing
Assessment: It means that the auditor
formulates a judgment on the basis of relevant and reliable evidence.

Activities: Performance auditing extends


to financial as well as activities of an organization.

non-financial

Organization: Performance auditing takes

an over view of the activities and functions of an organization as a whole.

Resources:

The resources of an organization consist of money, men, 5050 materials, and machines.

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Performance auditing
Management: Management covers such
functions as planning, organization, resourcing, directing and controlling.

Economy: Review of economy is a primary


element in performance auditing.

Efficiency:

Efficiency refers to the relationship of inputs and outputs. It relates to utilization of resource.

Effectiveness: It means the extent to


which an objectives. organization achieves its
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Performance auditing
Accountability
Public managers are responsible to carry out the policies of the legislature by translating them into appropriate programmes. It acts as a catalyst to increase awareness of accountability among public managers.

requirements:

Reasonability: The performance auditing


adopts the manager. approach of a reasonable

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4/5/12 The Three E's in performance audit

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The Three E's in performance audit

whether resources have been procured in the right amount, at right place, at right time and at right cost Right time to acquire a resource is also linked to the need to be fulfilled. The resource should be available to satisfy the need when it is required.
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Efficiency

Efficiency is a difficult concept in government organizations. It presumes that standards of input and output are available.
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Private Sector Comparison: In certain areas where private sector is also providing similar service, comparison with private sector could be useful Past Performance: Comparison with past years may also reveal potential areas Targets: Targets set by the management for itself should be used as comparison measures

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Measurement of Efficiency
Whether all levels of the organization are aware of their goals? Whether there is a reliable system in place to monitor the output of each level? Whether the management receives regular reports on current levels of efficiency or services rendered? What are the measures taken by the management to improve its efficiency? What efficiency measures are feasible in the given situation?
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Pre-requisites for the Measurement of Efficiency

The outputs repetitive.

should

be

uniform

and

There must be an agreed standard of performance against which actual output has to be measured. For example, in case of a school the number of class-contact hours for a teacher in a week should be laid down as a standard. If the standards do not exist then output may be measured with previous years. Sometimes measurements are compared between two geographical locations, or,
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Advantages of Efficiency Measures


They help quantity. to control to prepare quality and

They help achievements. They help plans. to

demonstrate budgets and

They provide a rational basis for pricing goods and services, They help in deciding' the level of service to be provided,
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The Three E's in performance audit


Effectiveness

Review of effectiveness presumes existence of measurable objectives or outcomes of public programmes. These objectives or outcomes serve as criteria for the auditor. Expressing an opinion on the effectiveness is an important and vital breakthrough in the traditional scope of auditing. In certain auditing is countries known as performance 6060 effectiveness

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whether the objectives have been defined by the auditee as precisely as practicable? how far the objectives have been based on facts and forecasts which appear reliable? to what extent the objectives have been achieved? whether the policy instruments chosen to carry out objectives are based on detailed analysis of alternatives? 6161

Sources of Performance Measures


Citizen surveys,: especially in areas of social services, police, garbage collection etc. For reliable results, extreme care need be exercised in determining sample size and preparing questionnaires. Trained observer ratings: Trained observers are used to rate conditions in a particular area, using a predesignated rating criteria such as street cleaning.
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Internal records: Review of internal records such as occupancy rate for residential homes, user complaints, etc. sometimes provides vital information for measuring' effectiveness.

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If the management has a system of effectiveness measurement then the auditor reviews its reports in the following manner:
documents the management's system of effectiveness measurements;
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If there does not exist (or exists but is weak) a system of effectiveness measurement then the auditor has to generate his or her own data. It may involve scrutiny of internal records or external surveys. Whatever method is chosen, the auditor should be 6565

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The economy, efficiency and effectiveness aspects of an organization are closely interlinked. Sometimes, they trade-off with each other. the quality of performance should not be compromised in seeking greater economy or efficiency effectiveness measures should increase by such

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Role of Auditor General of Pakistan

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Financial Attest
Financial Attest provided by the SAI Pakistan covers a very broad range of governmental operations. There are three tiers of government (Federal, Provincial and District) and three types of organizations (those on the central accounting network, self-accounting entities budgeted by the government and public sector entities). Financial attest is provided at all tiers and for all categories, except those entities whose accounts are, by law, auditable by private sector auditors.
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Regularity and Compliance Audits


Regularity and Compliance Audits of expenditure and revenue receipts are conducted under roll over planning for all organizations at all tiers.

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Performance Audits
Performance Audits focus on the outcomes of various projects and programmes with special emphasis on social sectors.

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Special Studies
Special Studies are initiated on matters of pressing importance or urgency which are of significant public interest.

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Training, Research and Publications

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Training, Research and Publications are the main tools of the SAI Pakistan to keep abreast of the developments in the profession. It has a network of training establishments spread across the country, where public servants are trained in auditing, accounting and financial management. Its research operations have produced a Financial Audit Manual, an internationally recognized Financial Audit Methodology
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Performance appraisal

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Performance Evaluation in Pakistan


Writing Of Performance Evaluation Reports

The report is initiated by the next higher officer and countersigned by an officer higher than the reporting officer, both being concerned with the work of the officer reported upon.

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Instructions for the Reporting Officers


While reporting on the subordinates: Be as objective as possible. Be as circumspect as possible. Be clear and direct, not ambiguous or evasive in your remarks. Avoid exaggeration understatement. and gross

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Instructions for the Countersigning Officers


The Countersigning Officers should weigh the remarks of the RO against their personal knowledge of the officer under report and then give their assessment in Part V. In case of disagreement, the Countersigning Officers should give specific reasons in Part V. Similarly, if the Countersigning Officers differ with the grading or remarks given by the Reporting Officer in Part III they should score it out and give their own grading by initialing the appropriate box.
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Other instructions
Officer who has worked for less than three months with a Reporting Officer-The question of recording of Evaluation reports in respect of officer who may not have worked with a reporting officer for a minimum period of three months during a year has been considered. It has been decided that in such cases the countersigning officer may obtain separate reports from each of the reporting officers with whom the officer concerned has worked during the year.
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After examining their reports he may exercise his discretion to decide which of those reports should be accepted. Alternatively, he may himself write the report after examining the reports of the reporting officers with whom the officer concerned worked during the year.

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grading in PERs
According to Promotion Policy issued vide Establishment Secretary's d.o. No.10(10)/85-CP I, dated 15-5-1985 (SI. No. 154 Chapter 11 of Estacode), the overall grading in PERs are allocated the following marks:
Overall Grading Marks

Outstanding Very Good Good Average Below Average Poor

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For Ministries/Divisions
Officer reported upon Reporting officer Section Officer Deputy Secretary concerned Countersigning officer Jt. Secretary concerned (or Secretary, if there is no Jt. Secretary). Secretary (if there is no Jt. Secretary, report should be initiated by Secretary himself and countersigned by the Minister-in-charge). 8181

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Deputy Secretary

Joint Secretary concerned

Attached Departments and Subordinate Offices


Officer reported upon All officers other than Head and Deputies to Heads of the Departments/ Offices Deputies to Head Deptt/Office. Reporting officer Next higher officer concerned Countersigning officer Officer higher than the reporting officer concerned with the work. Deputy Secretary, Jt. Secretary; or Secretary of the Administrative Ministry, according to the status of the Head of the Deptt.

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Head of the Department

Head of Deptt/

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Auditor General of Pakistan

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Introducing performance management in Pakistan

Select one or two government departments that provide services directly to the public; Define, in consultation with front-line employees and service users, a few key and simple performance measures that entail an acceptable cost of collection, reporting, and 9494

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Suggestions
The goal of stronger performance orientation should not be confused with the specific means for achieving it. When performance indicators are appropriate, they should be piloted at first without making wholesale changes in administrative or budgetary systems. The process of choosing the right
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The use of the different input, output, outcome, and process indicators of performance should be tailored to the specific sector and program in question. A combination of a few key indicators should be used to assess performance rather than either a single one or a large number of indicators.
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The performance evaluation in public sector of Pakistan is following very outdated and inefficient appraisal system so there is need to introduce new appraisal system to make right performance evaluation There should be different performance evaluation criteria mainly according to the nature of different jobs

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References
Key Performance Indicators: Developing, Implementing, and Using Winning KPIs By David Parmenter Performance Auditing-The Three 'Es Muhammad Akram Khan Public management in global perspective / by Salvatore SchiavoCampo and Hazel M. McFerson. A Guide to
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