Productivity and Management in Public Sector
KeywordsPublic Sector Public Employee Public Organization Public Productivity Ambiguous Objective
To be productive is to have the capability and capacity to achieve targeted goals, such as the production of goods and services in response to consumer demand. The word productivity is used to describe the relationship between what is produced, in terms of goods or services, and the resources used in the processes of producing them. Goods and services are normally referred to as outputs, and the resources used to produce them are known as inputs. Productivity is calculated based on the ratio of output to input: units of output per units of input. Ideally, effective public management requires that inputs do not continuously exceed outputs in production processes. The general intent is to economically maximize outputs, based on the efficient management of resources.
Productivity in public management demonstrates competence in the use of resources, such as taxes, facilities, labor, and time, for creating and distributing goods and services, and the impact achieved. Productive public organizations accomplish their mandates and meet public expectations. Their leaders understand what makes government productive and effective. But, a wide range of factors influence public productivity, because the public sector is complex and encompasses many different types of production processes. So, there is no simple answer to this question. Certain factors, however, such as work processes, workers’ skills and motivation, management techniques, the introduction of technology, and organizational environments continue to be associated with productivity improvement and are impactful in various types of organizations and in other sectors as well. There are also factors that continue to deter productivity, such as political influence in decision-making, the lack of clear objectives, inflexible bureaucracies and fragmented authority (also known as “red tape”), the lack of accountability, and inadequate performance evaluation. These are also important for public managers to understand, so that they can find ways to control them. Understanding which factors drive or deter productivity enables public managers to address related issues in order to achieve success in their organizations.
Work processes, workers’ skills and motivation, management, the introduction of technology (Rosen 1984), and organizational environments continue to be avenues for improving productivity. Changes in management, especially in knowledge, attitudes, and behavior, lead to better understanding of how to obtain and use productivity measures. This supports more accurate evaluation of public organizations (Rosen 1984). Overall, technology is a major driver of productivity by accelerating and standardizing work processes, expanding capacity, increasing access to information, and supporting knowledge building in the field of public management. In the last three decades, information and communications technologies (ICTs) have transformed work environments and favorably impacted productivity.
Employee training is an ongoing necessity for developing required skills and for maintaining employees’ technological competence, given the continuous innovations in ICT development. Such programs are beneficial investments over time and contribute to increasing the responsiveness of public organizations to the needs and concerns of citizens by enabling closer connection between citizens and appointed and elected officials in governments and also through facilitating networks between departments of government and links between employees at various levels and occupations in the public sector. Closer contact between those who serve, with the people they serve, allows public sector employees to be better informed about public needs and concerns and, therefore, more responsive. Citizens expect that their government’s agencies will be fair, responsive, open, and accountable (Rainey 2014). Public productivity assessments must take into consideration their efficiency in organizing public programs but also the effectiveness of each program. It is important that programs are appropriate, as well as cost effective.
Public organizations become more efficient when they adapt to ICTs as an integral part of their operations. ICTs enable them to prioritize their activities accordingly, as well as to accommodate feedback and include it in their decision-making processes when determining what developments are required for them to contribute to the quality of life of citizens. The use of ICTs also allows public employees to share, exchange, and distribute information among public organizations locally and regionally, increasing the possibility of greater speed and thoroughness in decision-making processes. Management that is “connected” can more readily contribute to productivity improvements when doing so from informed standpoints. These methods can be used to reduce the need for incremental approaches when developing public programs.
Employee motivation is a driver of productivity that has received a lot of attention. Public managers need to know what inspires and energizes workers in order to help them increase their outputs. Many studies have found that workers in public organizations have different sources of inspiration than those working in private businesses. Indeed, there are some incentives that employees everywhere respond to, such as job security and adequate remuneration, but public employees are comparatively more motivated by their commitment to serving the public, the desire to do meaningful work for the benefit of their communities, and an interest in public policy development and implementation. Organizations that value feedback from employees get a better sense of the specific motivational factors that are relevant in different organizational settings.
In addition to work processes, workers’ skills and motivation, and managerial and technological interventions, organizational environments drive productivity. Practices and processes for the production of public goods and services are conducted in and through organizations, and certain organizational features can enhance productivity. Organizational communications processes that are improved by ICTs support standard operating procedures, customization of administrative responses to public request, and enhancement of record keeping and retrieval, due to the storage capacity and search features in ICT systems. Systematic comparisons and cross-referencing provide ongoing learning opportunities. Indeed, technology brings order to organizational environments and supports the execution of more timely administrative procedures, all of which contribute to improving public productivity.
Successful public organizations strive to foster and maintain work place environments that are cooperative and free of conflicts and tensions among employees. Occupational safety is an important area for managerial concern. In many countries, safety requirements are clearly documented with related mechanisms in place to monitor compliance. Safe and cooperative organizational environments help to inhibit some of the barriers to productivity.
Political influence, ambiguous objectives, bureaucratic inflexibility, fragmented authority, lack of accountability, and inadequate performance evaluation have all been frequently identified as barriers to public productivity. Public organizations have a long history of dealing with the challenges of political influence. Political decision-makers determine the mandates of public organizations and approve budgetary allocations for their programs. Budgetary priorities differ across political parties, and changes in government leadership can result in changes in funding for public programs. Political candidates often promise to cut taxes while increasing or improving services. (This is equivalent to cutting resources, while at the same time increasing or improving outputs.) There is also a tendency to take election cycles into consideration when determining funding priorities and time frames. These developments can impair public sector productivity and effectiveness in program delivery. A common mantra among public employees is the challenge of having to “do more with less.” Achieving better results with fewer resources is a challenge often faced by public organizations. When this leads to innovation, the results are commendable, but there is resistance to innovation because it can be experimental and time-consuming, with the possibility of wasting resources. Furthermore, there tends to be inadequate support for research development and experimentation in many important areas of public management.
Ambiguous objectives deter goal achievement. Public policy directives can be “lofty” without clear targets and specified indicators of achievement. Consequently, government agencies face difficulties in designing programs that are focused on achieving success. The following are examples of this: “to ensure public safety,” “to improve public education,” or “to enhance recreational opportunities.” Precise, quantifiable objectives are missing in these broad terms. Public productivity has been measured, for example, along the lines of the number of calls answered, cases processed, and applications received. Such data is informative regarding the demand for services, more so than organizational success in catering to those demands. The emphasis here is on quantity, with neither assessment of the quality and effectiveness of service rendered, nor of public satisfaction. Quality must be a component in productivity assessment if the waste of resources is to be controlled.
The structure of public organizations within political frameworks involves fragmented lines of authority within a bureaucratic hierarchy. Approvals and decision-making processes are consequently rigid, and, although they are aimed toward maintaining central control and preventing deviations in programs and service delivery, inflexible multifaceted methods rely heavily on rules, regulations, and detailed procedures (Ammons 1984) that result in delayed responses and reductions in productivity. Accountability has been directed primarily toward political decision-makers and supervisors, along the chain of command within departments of government. Public sector reformers continue to address bureaucratic rigidity and cutting the “red tape,” and these inflexible processes are often referred to as their primary intent. Decentralization of decision-making is a major approach aimed to reduce delays.
Lack of accountability to the public clouds managerial awareness of productivity levels. When accountability is internally focused in the organization, working within inadequate budgets and with limited resources, management can become preoccupied with trying to keep their operations running. When expectations focus more on efficiency, accountability remains at a low level, but with increasing public awareness and their demand for greater accountability, public organizations become more accountable for their effectiveness. This calls for more attention to results-based management rather than reliance placed simply on output-input productivity measures. Although the concept of productivity has been utilized for many years, it is often simplified and misapplied. Performance measurement facilitates a more accurate assessment of productivity and impact, as well as a more attractive path toward improving productivity (Holzer and Seok-Hwan (2004).
Public Performance Measurement
The public sector funds programs and delivers goods and services in the interest of the public. They must constantly be searching for ways to improve service to their communities. A major concern is how to make better use of allocated tax revenues. With this in mind, in measuring productivity, program outcomes and their impact become important indicators of organizational success. Performance measurement provides more clarity about what is actually provided, not what is produced. It must focus on more than just outputs and attempt to understand outcomes (Shark 2015). Performance, as a measure of organizational success, has been a major focus in the assessment and management of public sector progress in the new millennium.
At least two main stages are involved in utilizing performance measurement information. First is adoption (development of measures) and secondly, their implementation (actual use). These measures assist public managers in supporting the use of performance measures more effectively (de Lancer Julnes and Holzer 2001). An additional series of steps also affects the use of performance measures. These include assessing the organization’s readiness to develop and implement performance measures, identifying and involving the organization’s internal and external interest groups, involving employee unions, emphasizing the need for the organization to develop a “performance improvement culture,” and supporting the adaptation of performance measures in a short period of time. The awareness and culture that the adaptation of performance measures can create may help to improve the chances of implementing performance measurement in due course. Political and management support are also important to adopting and implementing performance measurement as a process of assessing organizations’ success (de Lancer Julnes and Holzer 2001).
The involvement of external stakeholders in performance measurement provides a more objective look at public organizations. Self-reporting can be self-serving. When citizens participate, it allows the public to ask questions and to select the measures and methods to be used. The effect is greater acceptance and appreciation of the results and more confidence that bureaucracies are making prudent use of tax-funded resources (Halachmi and Holzer 2010). Citizens’ participation also provides an avenue for better representation of all elements of society and more inclusive decision-making regarding issues that affect the lives of entire communities. Citizens’ participation also promotes transparency and accountability, in particular, and may facilitate better efficiency, legitimacy, public cooperation, and trust (Halachmi and Holzer 2010).
Technological developments and the adaptation of certain ICTs in public organizations make it possible for citizens to participate in measuring and assessing the performance of public organizations. This practice can be enhanced when there is actual legislation in place to support it. The Freedom of Information Act (FOIA) is an important example. With free access to public information, citizens can update themselves about public policies and programs being created for implementing them. Public agencies must also initiate consultation with citizens to facilitate feedback on issues that might concern them and engage them more integrally and interactively in decision-making processes. Across world regions, 62% of the United Nations member states recognize citizens’ rights to access public information. This is a constitutional right and is regulated through the promulgation of FOIA (United Nations 2015). In most cases, FOIA includes provisions for appeals and specific time frames for providing access to information.
Major aspects of productivity management in the public sector are first, the recognition that output-input measures are limited in determining the success of public organizations’ effectiveness in implementing public policy. It once prevailed as the method public organizations as well as in private businesses used to assess levels of productivity. It became recognized as more appropriate for private businesses seeking to calculate and retain their profit margins. As citizen orientation became a more important value, this form of productivity analysis proved to be devoid in providing useful information on which public organizations could plan for improvements. Citizens’ satisfaction is associated with their willingness to pay taxes, which makes their satisfaction a priority in evaluating the productivity and performance of public organizations.
Secondly, during the past 50 years, public administration and management researchers and practitioners in many countries have been dedicated to addressing the challenges for public sector reform, with strategies for productivity improvements. As a result, the study of public productivity has become geared more toward measuring the performance of public programs that are designed for implementing public policies. It has proven to offer better indicators of effective management. A third important aspect is technological development that can ameliorate the challenge of large and often unmanageable workloads. Traditionally, these conditions characterized government agencies and contributed to their inefficiency. Technology continues to improve productivity by enabling better time management and facilitating direct communication with both internal and external stakeholders. Above all, ICTs have helped to increase government-to-citizen connectivity, so that citizen satisfaction can be surveyed and addressed with appropriate responses to demonstrate that their governments are being accountable and responsive.
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