Performance Management in the Italian PA: an unfinished work or a theme and variation?

In the public sector, the long-held belief was that measuring performance was difficult if not impossible, unlike with private businesses. Why? Because the public sphere is not profit driven, nor shaped by market mechanisms. What’s more, organizations that work in the public interest do many immaterial activities relating to planning. However, in the more than ten years since the passage of the Legislative Decree 150/2009 (the so-called “Brunetta Decree”), the usefulness of measuring and evaluating public sector performance appears to be widely recognized, to the point where it is no longer open to discussion, at least not among the people who work there. But is this really the case? And who are these people? And most importantly what does ‘useful’ even mean?

PA performance measurement serves a wide range of extremely differentiated interests: the political body, management, public servants and end users. For politicians, to glean reliable information in order to develop strategies, set priorities and allocate public resources accordingly. Or, worst case scenario, to legitimize their work after the fact. For management, to interpret the dynamic of administrative action and apply the necessary course corrections; in other words, to make managerial decisions. For public servants, to align their work with general organizational goals, and (from a loftier perspective) to shed light on the true meaning of their daily work. For citizens and end users, to be able to appreciate the quality of the services provided and the proper use of resources.

But whether or not performance measurement in the public sphere is useful remains to be seen. Let’s try to demonstrate this assertion by focusing on managers. As Raffaella Saporito underscores in her recent article, beyond the legal constraint (which makes performance measurement obligatory, but says nothing about its usefulness), we need to consider other constraints that shape and restrict the space for managerial decisions: contextual constraints (institutional relationships), negotiations constraints (the set of divergent interests at stake), and above all, informational constraints (linked to the ability to utilize available information in a coherent way). As for the nature of these last items, remember that even in contexts where we would think strictly rational logic applies (for example, in the markets or in highly specialized professions such as medicine), we cannot subtract the “human factor” in individual choices: we are subject to a natural tendency toward error due to our limited cognitive capacity to handle immense amounts of information. In other words, since we are not robots, the question of the usefulness of measuring performance closely ties into the need to do so: the relationship between the quantity and the complexity of information on one hand, and the capacity to process that information on the other, makes it indispensable for management to resort to tools that guide decision-making.

Far from wanting to shield public managers from the unavoidable risks they take when they need to make decisions in the face of complex challenges, evidence-based management instead highlights the nature of managerial work as exercising a combination of discretion and responsibility. From this standpoint, information on performance should not serve to restrict the decision space, routing decision-making processes on a path formed by predetermined assumptions. Rather decision makers should be provided with certain particularly salient information in order to interpret key phenomena in organizational life and then decide what action to take as a result.

But beyond what should happen – what is the true status of performance management in the Italian PA?

In our investigation, we attempted to explore the main reasons that are cited for measuring and evaluating performance in the public sector (Figure 1). We started by asking a number of questions to participants in training programs at SDA Bocconi School of Management (including the Executive Master in Public Administration (EMMAP) and the advanced course for managers of Housing Companies (Casamanager)). Of the fifty or so public managers we spoke to, 78.8% said performance measurement served to assign bonuses; in second place, but far behind, to communicate goals and priorities to personnel (34%), to support operational planning (29.8%), to monitor progress on strategic objectives (23.4%) and to guide decisions regarding employees’ careers (19.2%). Only in 14.9% of the cases does performance measurement serve to inform management. Even less common, in the perceptions of the interviewees, is the function of external accountability (6.4%), and likewise for company policy reviews (2.1%), (which has higher strategic value).

Figure 1 – the main reasons cited for measuring performance according to Italian public managers

Even more interesting are the data on the perceptions of clarity of Performance Measurement and Evaluation Systems (PMES) (Figure 2). We found that the purpose and aim of these systems are not very clear or not at all clear for around one-fourth of our managers (29.8% and 23.4% respectively); even more negative perceptions come to light with respect to the methods for measuring performance (not very clear or not at all clear for 38.3% of respondents). But it is with regard to the outcomes of the measurement that the most alarming figure emerges: in 44.7% of the cases, the implications of the measurement and evaluation processes are not at all clear. As if to say: So what? This attitude, reducing PMES to the formal dimension alone, seems to be corroborated by the word associations respondents used when we asked them to choose adjectives to describe the systems in their administrations: “bureaucratic” (repeated by 17% of respondents), “formal” and “complicated.” However, a few voices sounded discordant notes with counterpoints of “shared,” “efficient,” and “transparent.”

Figure 2 – Clarity of performance measurement and evaluation systems

These data seem to confirm the hypothesis that the administrative system is highly effective in designing public policy, and far less so in implementing it. Borrowing again from the language of music, we could say that the “theme” of performance in the public sphere seems to be widely recognized and consistent. But the “execution” of the same varies greatly depending on the sensitivity of the individual players and the skill of the orchestra, with the risk, in some cases, of completely misinterpreting the original score.

The Covid-19 health emergency has suddenly shifted attention onto the theme of public performance. This has often been interpreted in simplistic terms that are limited to an instrumental rationale (“what” to measure) or a formalistic one (“how” to measure it). Less often addressed are the myriad purposes that measuring and evaluation can serve (the “whys” of measuring performance).

The public debate of recent weeks on the performance of public employees shows that positioning on this theme is complicated, fluctuating schizophrenically between praise of the value generated in recent months and the presumption that the work methods used to realize this value should be controlled. Beyond these opposite extremes, the question remains: What performance do we want for the future of the public administration in our country?

To answer this question, the SDA Bocconi School of Management is conducting additional research on the status of the system of performance measurement and evaluation in PA. To participate, fill out the questionnaire (available only in Italian) you’ll find at this link. The results will be available beginning in December 2020.