Performance Data Has Value Only When It's Used

Every few years new legislation revises the framework for planning and managing agency performance.  The latest is the 2018 Foundations for Evidence-Based Policymaking Act. In a recent report, the Government Accountability Office (GAO-20-119) listed actions taken by Congress and the White House Office of Management and Budget to strengthen federal “evidence building.” The list dates to 2009 and includes 14 actions; five are related statutes. The challenge has received extensive attention over 25 years but obviously it remains a problem.

The importance of performance metrics is unquestionable. It’s proven to be invaluable in every sector.  There are even books where the use of evidence is promoted for developing romantic relationships. The need for better results is also clear.

A recent column on another website made evidence-based management sound simple. The authors argued for using checklists similar to those used by pilots and physicians.

But that highlights an important issue and related distinction between using data for policy making and for day-to-day management. In federal agencies those are two different worlds. Pilots and physicians are the front line of decision makers in their fields. That’s true in several fields where metrics are an important tool.  The earliest application was fighting crime in big city neighborhoods.

The new law focuses on the development and evaluation of policies and programs. Those involved, however, frequently have no experience or direct involvement in front-line management. The new roles defined in the statute—evaluation officer, chief data officer, statistical official—are unlikely to spend a lot of time away from their agency’s headquarters.

The law focuses on the quality and analysis of data by those specialists. But as with physicians and the variety of illnesses they treat, each agency and their front-line managers have distinctive data needs.  Across the country there are obvious, significant differences in local economies, demographics, weather, etc. Metrics that may be instructive in Montana could be irrelevant in Manhattan.

Even what appears to be a straightforward goal, like improving customer satisfaction, has significant differences from agency to agency and from location to location. Roughly a dozen specific metrics have been developed to track customer satisfaction. One of several problems is deciding what’s relevant and what’s not.  

For some reason, federal initiatives to improve performance have rarely followed the proven approach in other sectors. As with physicians, front-line managers and empowered employees need data to respond to operational issues as they surface. That point was the focus of a recent National Academy of Public Administration report, Strengthening Organizational Health and Performance in Government. The authors, a panel of NAPA thought leaders, concluded that what’s needed is “a strategic reorientation that makes front-line managers the focal point . . .will pay the greatest performance dividends and reduce future risks of operational failure.” They highlighted a core problem as a side heading – “Front-Line Managers Are Not Leveraging Data to Inform Decisions”.

Using the data would mean managers have encountered operational issues that prompt decisions and changes they expect to correct or improve results. Data has little value if it’s not used to guide decisions.

That problem is not found in well-managed companies. In those organizations front-line employees are empowered and expected to make job-related decisions when problems first surface. They take the initiative. Textbooks picture interlocking, cascading goals. Metrics help employees and their managers track progress in achieving the goals. They are also rewarded for their accomplishments. Few agencies have a comparable work environment.

In contrast, government employees learn very early there is an unwritten job description that delimits what they are expected to do, the behavior that leads to success and what they need to avoid. They learn the unstated boundaries that govern permissible actions. Psychologists refer to this as a psychological contract. The contract changes subtlety at each career stage but throughout their careers it governs how employees perform their jobs.  

Although the contract idea is intuitively clear, as with many constructs, the definition is still debated. The literature focuses on the dynamics of the relationship between an employer and employees. One definition of the contract encompasses the mutual expectations of the employer and employees and their obligations in working together. A caveat is that factors external to relationships at work play a role; in the government context that includes unions and the many stakeholders.

The NAPA finding reflects the reality of the contract as its understood by managers in far too many federal agencies. There are jobs to be sure where snap judgments and decisions are expected but those are exceptions. More commonly, the bureaucracy has created a culture of compliance, a phrase prominent in another NAPA report where it’s defined as a work environment where “meeting compliance with the rules is more important than delivering [results].” Unfortunately, the budget deficits triggered by the 2008-2009 recession have prompted many public employers to ratchet up top-down control.

Recently I asked a manager in an agency that is experiencing financial problems for comment on what has transpired in the decade since the recession: 

“I believe [the agency] has changed in a number of ways in the last 10 years. Worker sentiment has been inflamed by our leaders’ insistence on implementing processes based on applications created by people who have never done the job. The problem is that if you follow the prescribed work process and fail, your actions are micromanaged to prove that you failed. If you rely on what you’ve learned and get the job done, you are chastised for not following the process. If you rely on what you’ve learned and don’t get the job done, you are chastised for not following the process. So workers just do what they are told and don’t care if it works.”

That is from an experienced manager; all the evidence confirms the use of metrics is not working. When agencies rely on top down control, dictating performance expectations, the message is clear—management does not trust or value employees. Employee commitment and performance deteriorates.

Psychological contracts in high performance organizations have not been subject to the same research scrutiny. Related research, however, suggests the culture in the best performing organizations supports continuous improvement with clear expectations, high mutual trust and respect, job security, ongoing dialogue, emphasis on coaching and development. It would be valuable to document the psychological expectations typical in the best places to work. Both management and employees are confident the other party will deliver on their promises. Employees find working in those organizations highly satisfying.

Public employers will have to address NAPA's conclusion to realize significant performance gains. That will be a difficult transformation. McKinsey consultants argue a key is involving employees at all levels to secure their buy-in to the need for change. To support and facilitate the needed change in the approach to management, the state of Tennessee invested three years in training and coaching to enhance the skills of managers. They also transitioned to pay for performance to reinforce redefined expectations. Leadership from the highest levels is essential so everyone knows it's a priority. A recommended step is to initiate regular small group discussions to identify current practices that impede improved operations.