ACCA P5 Advance Performance Management
The post is unmodified version of some paragraphs from the
article linked below (Page 10 - 12)
For full article click the link below.
Dysfunctional behaviour
When individuals respond to
performance indicators in a way that maximizes their benefits this is known as
the gaming response; and may include
neglecting unrewarded tasks, and manipulating
and distorting results. Examples of gaming exist across the whole of the
public sector.
In the education sector, where
performance measures were based on tests scores changing students’ grades and
“teaching the test” in order to boost the results-based rewards in schools
occurred. Additionally, there was a focus on pupil attainment neglecting some
of the activities that lead to productivity but are not rewarded such as
teaching citizenship, conflict resolution, and interpersonal skills whose
development is an important aim in primary schools.
The recognition of most of the
problems mentioned earlier concerning public sector multi-tasking,
multi-principals, and the lack of objectives, was one of the drivers for the
development of a new system entailing additional performance measures including
academic and non-academic indicators. Under the new scheme, first applied in
July 2000, teachers’ performance indicators are assessed against five main
criteria: - 11 -
•Pupil progress.
•Wider professional effectiveness
(two dimensions).
•Teaching and assessment (three
dimensions).
•Knowledge and understanding.
•Professional characteristics.
In respect to the gains in the test
scores and improved pupil performance another problem arise which is the sub-optimization of the educational
outcomes compared to the wider social goals and misalignment of performance
measurement objectives with the objectives of reward. Sub-optimization
occurs when there is a lack of congruence between PRP measures and the global
objectives of the organisation. Mayston, (2000), argues that one of the
measures valued by society is student satisfaction. The current priority given
to pupil’s progress and maximizing the reported examination results may lead
students to experience additional stress and pressures from further increasing
their examination results which will consequently reduce their satisfaction and
sense of fulfillment from the educational process itself. Even worse the drop
in students’ satisfaction, in turn, may impair their examination performance
(Mayston, 2000).
Moreover, given that, PRP operating
in schools is an individual-based scheme, where teachers are assessed
individually against the performance measures and are given an incremental
progression up through a scale of nine increments which once reached become
permanent in their salaries two hypothesis can be derived. The first is that,
since PMS in this case are school-based as opposed to teachers’ individual
assessment, there is a misalignment of
the objectives of PRP and PMS. The second is based on the fact that since
reward increments go into teachers’ permanent salary meaning that even if
performance drops the salary will remain the same, then, performance measurement in linkage to pay would only be a tool for
monitoring past performance and controlling the wage bill rather than improving
future performance.
Evidence on unintended responses and
dysfunctional behaviours is also apparent in the health sector. Goddard et al.,
(2000), found evidence of gaming
concerning efficiency, where respondents were reluctant to produce improvement
in costs for fear that the following year’s efficiency targets would be set at
a higher level. He also noted that “financial regime in which Trusts
operate encouraged Trusts to fail to meet their financial target as these were
often “bailed out” by the region” (p.105).
Clearly the performance assessment
framework being based on a balanced scorecard approach includes wider
performance measures based on financial, clinical and patient-care indicators
for hospitals (Popper and Wilson, 2003). Yet, the lack of measures - 12 - relating to clinical outcomes was evident in Goddard’s et
al., (2000) study on Performance Assessment Framework, which they called tunnel
vision. In the same study, two other problems were reported. It can be
assumed that the first one which is misrepresentation
corresponds to distortion of data in the educational sector. Distortion and
misrepresentation of data can exist in the appraisal process itself where
agents (teachers or clinical staff) can only focus on the positive sides of
their achievement (Forrester, 1998) since many of the data used to measure
performance are under the direct control of those staff (Goddard et al., 2000).
Similar to the reasons of gaming in the health sector, misrepresentation of
data can sometimes be negative, extending waiting times because again there is
tendency to provide additional funds to Trusts who fail to meet their
objectives (Goddard et al., 2000). In this respect, selecting performance
measures that optimally trade off the desire of controllability with the need
of goal alignment are argued to be crucial for the success of PRP [Baker,
2002].
Check above mentioned and some more
dysfunctional behaviour like myopia, ossification on ACCA article – “Pyramid
and Pitfall of Performance Measurement”
PROBLEMS WITH THE IMPLEMENTATION OF
PERFORMANCE MEASUREMENT SYSTEMS IN THE PUBLIC SECTOR WHERE PERFORMANCE IS
LINKED TO PAY: A LITERATURE REVIEW DRAWN FROM THE UK Page10
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