KYT102U-INTRODUCTION TO PUBLIC ADMINISTRATION
Chapter 6: Strategic and Performance Management in Public Administration
Introduction
With globalization and developments in technology also comes a change in organizational structures. Especially since the 1980s, worldwide competition has led companies to develop various strategies. During this period, strategic and performance management has become an essential tool. Strategic management comprises the methods and policies that detail an organization’s future. The strategic management process is a cyclical structure that starts with planning activities and continues with implementing strategies and measuring the success of the goals and objectives. It is finalized using the obtained performance information in further strategic planning activities.
Strategic Management
Strategic management is a tool that is a part of an organization’s process of change and plans, and it concerns all organizations, especially the public and private sectors. The word “strategy” comes from the Greek strategos, which means a general in command of an army. The concept of strategy was developed as a military term, which later gained prevalence in the business world and was transferred and implemented in public administration as an effective management tool after the 1980s. Strategy in the context of management studies is defined as the path to achieving a goal.
Strategic management involves planning, vision and mission statement, values and principles, objectives, and goals. Within this framework, we must first define the following concepts: Strategic planning ensures that all resources are managed with a single aim and that the resources managed are placed under the decision-maker’s control. All resources should be available to decision- makers appropriate to their administrative needs. Mission refers to the specific task undertaken. It shows the work carried out by the organization and its raison d’être. Vision refers to the values that show what changes should be made in the mission of an organization to benefit from future opportunities and compete with other organizations. The vision is the imagined future of the organization future. Management philosophy refers to the essential qualities related to management and the importance that managers attach to their work at present and in the future. Values and principles refer to accepting impartiality, legitimacy, accountability, transparency, protection of rights, encouragement of talented employees, and performance-based management. Strategic objectives are the specific results to be achieved within a certain period. It is in parallel with the organization’s raison d’être and fundamental principles. Strategic goals should be realistic, forecasting, concrete, accessible, measurable, and sustainable. Internal and external factors should be considered, and the goals should not contradict each other. And thus, goals that cancel each other out should not be included in the same strategic plan. Strategic goals refer to the rules that determine the road map of the organization, namely, where it wants to arrive. The clearer, more
understandable, measurable, and result-oriented objectives, the more realistic the strategic goals will be.
Strategic Management Process
The strategic management process is the path the organization draws in order to achieve its goals. The strategic management process makes it easier for the organization to understand itself, its competitors, its customers, and the market. Within this framework, the organization’s vision, mission, strategic goals, and plans are determined, and these strategies are reviewed.
Public Administration and Strategic Management
Public administration has encountered many problems throughout history, and different countries have introduced numerous administrative reforms to eliminate the disrupted aspects of public administration. Moreover, various mechanisms and their applications have been implemented to increase efficiency and productivity in public administration (Güven, 2014: 69-70). In this regard, there is an attempt to transfer the methods and techniques used in the private sector into public administration. T he concept of strategic management has started its expansion into the public sector with the introduction of the new public enterprise. As a reflection of this understanding, there have been attempts to restrict public expenditures and ensure savings in the public sector. One of the techniques used in this instance is strategic management. The strategic management approach has come into the limelight due to its role in ensuring resource efficiency and its promise to provide a more transparent management process.
Strategic management aims at avoiding public administration threats and seizing opportunities at the highest capability. This eliminates uncertainty in institutions and determines the next steps more clearly. Public institutions and organizations that adopt the strategic management process can also develop an outlook for the future. It evaluates how public resources decrease daily and can be used more effectively and efficiently. Combining principles such as transparency and competition contributes to forming the bond between public administration and strategic management.
Performance Management
The strategic management process is a cyclical structure in which audits and evaluations are carried out to gauge an organization’s performance in achieving its goals. Accordingly, the audit and evaluation of strategies in the strategic management process can also be defined as a sort of performance audit. Performance management is critical for strategic management. In the same vein, evaluations regarding the achievement of the objectives are carried out through performance management. Alongside the meanings of “performing” and “carrying out,” the word “performance” also has the associated meanings of success and achievement. Thus, performance management as a tool gives quantitative and qualitative insights into
what has been achieved through the various actions taken for a certain purpose. In this case, the performance management process replaces hierarchy with teamwork and assumes shared responsibilities. In the broadest sense, a performance review is defined as the evaluation process of the personnel’s success in their work according to their job requirements. Alternatively, it can be defined as procuring feedback based on employee performance.
Performance management also supports the reward system, increases work motivation, improves the organization’s efficiency, helps with promotion decisions, and helps with effective interviews in the recruitment process. Performance management aims at increasing the motivation and abilities of the employees of an organization, strengthen their loyalty, and ultimately increasing organizational efficiency.
Principles of Performance Management
The performance consists of a combination of multi-factor systems. Various criteria have been introduced for the effective and efficient use of resources. These concepts, which are characterized as the elements of performance management, are “economy,” “efficiency,” “effectiveness,” and “equity.” And also, quality could be added to these elements 4E.
Economy refers to achieving the goal while saving time and costs. In other words, it is achieving maximum output with minimum input. Therefore, economical practices are performed where waste is prevented at the maximum level, and the costs are reduced to a minimal level.
Efficiency is the relationship between the input and the output. According to the Turkish Courts of Accounts definition, efficiency is “achieving the highest output with certain inputs, taking into account the organization’s goals, or achieving a fixed value and quantity of output with the least amount of input.” In other words, efficiency is achieved if the maximum output can be obtained with minimum input. Efficiency is important for both the private sector and public administration. It consists of elements related to the organization and its activities.
Effectiveness is the realization of goals and objectives and the degree to which a goal is achieved. It is based on the hypothesis that projects and actions can be measured.
Equity ensures equal and fair use of services. It is an essential tool for establishing trust in public institutions. Equity is a characteristic need for public service provision. Although it is among the elements of performance measurement, it is not easy to measure public services within the framework of this principle.
Performance Management Process
The performance management process includes the purpose of the organization, its strategy, plans, audits, evaluations, research, developments, and communications, as well as remuneration, reward, upgrading, promotion, job design, staffing, training, and disciplinary processes.
First of all, the aim of the process should be identified clearly. Secondly, the process must be designed in accordance with the aims since each process necessitates different steps compared to others. Thirdly, up-to-date training programs should be prepared for managers and employees. Finally, activities should be monitored and followed up continuously. The performance management process consists of performance planning, evaluation, measurement, and using the results and feedback.
Performance planning encompasses the goal-setting processes by the manager and the employee. Performance criteria and the organization’s strategic objectives are also considered when determining the goals.
Performance measurement refers to the stage where the performance of employees is measured after performance criteria are determined.
During the evaluation process, managers and employees come together face-to-face or through different interview methods and give positive and negative feedback by assessing the progress. Employees are thus re-motivated for the goals of the organization.
The results are collected and evaluated during the evaluation phase. In the performance evaluation process, the results are assessed according to their compliance with the targets determined at the beginning of the period.
Evaluation at this stage ensures that the results help managers with training, remuneration, career planning, and promotions by analyzing the results
Performance Management in the Public Sector
The concept of management has different meanings in the public and private sectors. While the principle of public interest is at the forefront of public administration, profit is the priority in the private sector. On the other hand, the difficulties experienced in measuring public goods and services also contribute to the difference between public administration and the private sector. In contemporary public administration, the method chosen is to manage and evaluate departmental and personnel responsible for public expenditures to meet citizens’ expectations. The feasibility of the targets is extremely important for the effective realization of performance management. Sorting the goals in the order of importance is essential since it increases performance and motivation by showing that these goals are challenging but achievable. The manager should not only focus on the department’s goals but should take the necessary steps to ensure the goals of both the department and the individual are met. This method helps ensure individual employee satisfaction and, in turn, provides the most vital driving force behind increased performance and motivation.
Types of Public Performance Management
There are different types of public performance management. Some are corporate performance management, team performance management, and
individual performance management. In addition, inter- firm, intra-firm, or inter-actor comparisons, comparisons by goals, past performance, and private sector comparison can also be used for performance management.
Elements of Performance Management in the Public Sector
The elements of performance management in the public sector consist of a strategic plan, performance programs, monitoring and evaluation, and annual reports.
Public Strategic Management and Performance Management in Turkey
The human element is crucial in strategic management and performance management in the public sector in Türkiye. The performance of public personnel depends on motivation. Therefore, the performance of public personnel with high motivation will also increase continuously. Accordingly, public personnel will make extra efforts to ensure that the service provided to the public is effective and efficient.