Setting the Standard in Performance Measurement Systems

ABSTRACT A fundamental challenge in the design of performance measurement and incentive systems is the establishment of appropriate benchmark levels of performance, also known as performance standards. Drawing from the information economics, contract theory and public administration literatures, we derive theoretical implications for the construction of performance standards. We then assess alternative methods that are commonly used to construct performance standards and consider their application in performance measurement systems in public programs. We draw out important lessons for the establishment of performance benchmarks and other implications for performance standards system design in public organizations.

[1]  Burt S. Barnow,et al.  Exploring the relationship between performance management and program impact: A case study of the job training partnership act , 2000 .

[2]  S. Burgess,et al.  The Role of Incentives in the Public Sector: Issues and Evidence , 2003 .

[3]  Bengt Holmstrom,et al.  Moral Hazard in Teams , 1982 .

[4]  James D. Thompson.  Organizations in Action , 1967 .

[5]  M. Finnsdóttir,et al.  [Study in administration]. , 1972, Timarit Hjukrunarfelags Islands.

[6]  Carolyn J. Heinrich.  Do Government Bureaucrats Make Effective Use of Performance Management Information , 1999 .

[7]  Jeffrey A. Smith,et al.  What Do Bureaucrats Do? The Effects of Performance Standards and Bureaucratic Preferences on Acceptance into the Jtpa Program , 1996 .

[8]  J. Heckman,et al.  Making the Most out of Programme Evaluations and Social Experiments: Accounting for Heterogeneity in Programme Impacts , 1997 .

[9]  J. Wholey,et al.  The Case for Performance Monitoring. , 1992 .

[10]  Michael Cragg,et al.  Performance Incentives in the Public Sector: Evidence from the Job Training Partnership Act , 1997 .

[11]  B. Radin.  The Government Performance and Results Act and the Tradition of Federal Management Reform: Square Pegs in Round Holes? , 2000 .

[12]  Steven S. Smith,et al.  The American Congress Reader: Principals, Goals, Dimensionality, and Congressional Committees , 1994 .

[13]  Gerald Marschke,et al.  An Empirical Investigation of Gaming Responses to Explicit Performance Incentives , 2002, Journal of Labor Economics.

[14]  Lyman W. Porter,et al.  Factors Affecting the Context for Motivation in Public Organizations1 , 1982 .

[15]  David N. Ammons,et al.  Mini-Symposium on Intergovernmental Comparative Performance Data , 1999 .

[16]  A. Schwartz,et al.  Using Adjusted Performance Measures for Evaluating Resource Use , 1999 .

[17]  P. E. Crewson,et al.  Public-Service Motivation: Building Empirical Evidence of Incidence and Effect , 1997 .

[18]  R. Pitetti,et al.  Managerial dilemmas. , 2001, Pediatric emergency care.

[19]  Canice Prendergast.  The Provision of Incentives in Firms , 1999 .

[20]  Paul R. Milgrom,et al.  AGGREGATION AND LINEARITY IN THE PROVISION OF INTERTEMPORAL INCENTIVES , 1987 .

[21]  M. Hacker,et al.  Designing and installing effective performance measurement systems , 1998 .

[22]  J. H. Davis,et al.  TOWARD A STEWARDSHIP THEORY OF MANAGEMENT , 1997 .

[23]  Avinash Dixit,et al.  Power of Incentives in Private versus Public Organizations , 1997 .

[24]  Joseph S. Wholey.  Performance-Based Management: Responding to the Challenges , 1999 .

[25]  Geert Bouckaert,et al.  Measurement and Meaningful Management , 1993 .

[26]  Gerald Marschke,et al.  Measuring Government Performance: Lessons from a Federal Job Training Program , 1998 .

[27]  R. Kravchuk,et al.  Designing effective performance-measurement systems under the Government Performance and Results Act of 1993 , 1996 .

[28]  H. Rainey,et al.  Reward Preferences among Public and Private Managers: In Search of the Service Ethic , 1982 .

[29]  Carolyn J. Heinrich.  Outcomes–Based Performance Management in the Public Sector: Implications for Government Accountability and Effectiveness , 2002 .

[30]  Leanna Stiefel,et al.  Better than Raw: A Guide to Measuring Organizational Performance with Adjusted Performance Measures , 2003 .

[31]  P. Shekelle,et al.  Dying to Know , 2000 .

[32]  Gerald Marschke,et al.  An Empirical Investigation of Gaming Responses to Performance , 1997 .

[33]  Jennie E. Raymond,et al.  The Effect of Creaming on Placement Rates under the Job Training Partnership Act , 1993 .

[34]  Avinash Dixit,et al.  # Incentives and Organizations in the Public Sector: An Interpretative Review , 2002 .

[35]  Paul R. Milgrom,et al.  AGGREGATION AND LINEARITY IN THE PROVISION OF , 1987 .

[36]  L. R. Wise.  Bureaucratic Posture: On the Need for a Composite Theory of Bureaucratic Behavior , 2004 .