The purpose of PM has been established, and it is evident that there are good intentions behind the process, which is why performance auditing has already been fully established in Finland, Netherlands, Sweden, Canada, the UK and the US (Boukaert and Pollitt, 2004). However, it has not been completely applied in France, Germany and Italy, maybe because it is hard to find the best ways to measure performance (Audit Commission, 2000). The assignment now moves onto describing the methods the UK government has chosen to measure performance in the healthcare and education services.
Healthcare
A high level of performance is especially important in healthcare services as it is a vital commodity for the public, but because it is so complex, performance criteria is more subjective making it very difficult to construct measures of performance (Moullin, 2004, pp.110; Propper and Wilson, 2003, pp.264). Awareness of the need for healthcare has also enlarged in the US, where it has been increasingly measured for performance over the past decade to improve the quality of service (Handler et al, 2001, pp.1235).
The Labour government, from 1997, put PM at the forefront of the British National Health Service (NHS), and in 2000, it set 300 detailed targets to be met for the next ten years (Smith, 2002). The key targets can be found in appendix A. Tony Blair issued a healthcare spending budget to match the average level spent in the European Union, which meant there was a huge increase in the NHS budget. This demonstrates how healthcare is also prioritised in other European countries. The increase in PM in healthcare was also triggered by the Harold Shipman case that uncovered malpractice by one doctor that had been ongoing for many years, seeing the death of many service users treated by him.
So what performance measures are now being used? The two main ways PM is conducted are by the UK Star Rating System and the Performance Assessment Framework.
The UK Star Rating System is carried out by the National Performance Assessment System who categorise the management of hospitals into four groups where an award of 0, 1, 2 or 3 stars are given. The assessment is against the key targets found in appendix A and those who are awarded the most stars, indicating the best performance, gain their incentives. Rewards in healthcare include earned autonomy, new doctors’ contracts and more funding, which improve performance from wanting and even needing the incentives offered (Carvel, 2002). However, the downside of this is that those performing poorly will not receive any funding but financial penalties, demoralising the workers at that hospital. It has been known that executives of hospitals have corrupted the data of their performance to avoid such penalties so the UK Star Rating System is not the most reliable form of PM (Moullin, 2004). How can this data be reliable if it has been known to be distorted? It is also argued that current PM methods do not relate to the overall purpose of the service:
In the ambulance service, units have an eight minute response time target for serious incidents…the target gives ambulance crews no choice but to dump patients in accident and emergency departments (Caulkin, 2004).
This clearly demonstrates that to meet PM targets, patients are not always going to be satisfied and subsequently, performance is not truly being measured. On the other hand, there would be pressure to improve and meet targets if data is going to be published, which should improve overall performance anyway. Publications are ones such as the NHS P1 booklets which are used for informing legislatures, taxpayers and service users – representing how PM has become more external.
The other PM is by the PAF (Performance Assessment Framework) included in the NHS plan. The PAF assesses performance against sixty high level performance indicators grouped into six categories, which can be found in appendix B. These measures are more balanced and show how NHS performs with more depth as they have a closer match with policy priorities (Smith, 2002). For example, measures of patients treated and discharged from hospital is taken a step further, to measure how many are treated and discharged who are capable of living independently; this also shows that PM has become more intensive. However, Smith (2002) also argues that the indicators may have been chosen on the basis of administrative convenience. PAF does though focus on improvement, because the PM against all the indicators emphasises the need to find out why performance falls below the average to continuously develop.
Although only two forms of PM have been described, there are many more PM methods such as Data Envelopment and Free Disposable Hull (Bovaird and Loeffler, 2003). Even now, Moullin (2004) reveals that the number of performance measures is increasing. This is what is happening in the US, where several different national assessments have been published and more extensive assessments of public health are currently under development (Handler et al, 2001). Overall, the PM in the UK healthcare sector may be complex and difficult, but it is clear that it is trying to achieve the aim of improving the value of service for users.
Education
PM in the education services is expected to be of a high level in all developed countries and emphasis is heavily placed upon the need for educated children in the future, therefore teaching performance needs to be monitored to show how well children are being taught. Initiatives to raise service levels have been in many countries, for example, the needs of PM in education are stated in the UK’s Citizen Charter 1991 and in the French Public Service Charter 1993 (Boukaert and Pollitt, 2004, pp.91). Since 1988, the UK government forced national league tables on all schools and imposed a national educational curriculum. So who measures performance in the education sector?
The Office for Standards in Education is a governmental body overseeing the inspection system in education. They evaluate different categories of performance with the purpose to ‘operationalise formation of judgements about schools’ (Gilroy and Wilcox, 1997). An example of an OFSTED (Office for Standards in Education) evaluation can be found in appendix C. Since their inception in 1992, the OFSTED have been publishing annual reports to summarize performance. This is undertaken by inspectors visiting schools for a number of days in order to observe teachers and pupils and grade them.
League tables were introduced when the Conservatives were in government who believed that by publishing performance data, it would empower parents in an era of choice reform (Carvel, 2002). From the commencement of league tables, performance in the UK education sector and the performance of school exams in the US improved, showing that the incentive of knowing that PM data would be published pressured schools to improve their education (Propper and Wilson, 2003). An indirect reward was gaining more students for improved schools.
An argument of the usefulness of OFSTED is whether or not they are able to measure schools effectiveness. An example offered by Carvel (2002) is that pupils from a prosperous neighbourhood could easily outscore an excellent school that was in a neighbourhood that was struggling against social odds. Also, inspectors are very subjective and give schools grades based upon a grading framework, which may lead to inspectors merely seeking to satisfy the system and remain internally consistent rather than having an objective judgement (Gilroy and Wilcox, 1997). For example, one inspector may grade a maths teacher as very good, whereas another inspector may grade the teacher as below average – how would this grade be aggregated? The OFSTED (1994) have even said that ‘no subject matter is value neutral, even those which most aspire to objectivity’.
Another method is the Value-added PM. This is used to see how a schools performance is impacted by the environment and impact for the students’ progress between two points in time. Propper and Wilson (2003) agree that this PM is an objective evaluation of performance since it accounts factors beyond a schools control such as family background. This is an example of PM becoming more intensive, as the information gained is more informative. This is an advantage over the OFSTED inspection which is more subjective. Overall, both PM methods described assess performance to establish strengths, weaknesses and what needs improving. Appendix C shows how OFSTED have reported that one school needs to improve attendance levels, along with other developments needed.
Conclusion: What Appears to Work Best in Managing Performance in these Services?
This assignment has explained the purpose of PM and has demonstrated that it is a very important concept and an invaluable source of information used to sustain an effective and efficient public sector. It is through knowing how well different service providers are progressing that allow the UK government to deliver the appropriate level of service standards. This is because the correct policies can be utilised, functional competencies are established and PM also supports New Public Management by providing service value parallel to that of the service users needs. For example, parents are empowered by knowing how well schools are performing in their local area through the information provided by OFSTED (Carvel, 2002). This then allows them to choose (to an extent) which school they want their child to attend.
The healthcare and educational services were explored to fulfil the assignments interest in identifying the best ways performance in measured. This is especially interesting because since data had been made available to the public, PM publications have become significant media events which should have pressured a best PM to have been developed (Boukaert and Pollitt, 2004). The UK Star Rating System, PAF, OFSTED and the Value-added PM methods were each described highlighting the strengths and weaknesses:
The UK Star Rating System rated hospitals, rewarding those performing well which motivating but poorer performers received financial penalties. This caused lower morale and it was known that chief executives fiddled with the figures; therefore it is a less reliable form of PM. Bovaird and Loeffler (2003, pp.133) state that data corruption is higher when organisations see PM as imposed externally. The PAF is a balanced PM method which is very in depth, discovering ways for continuous development. However, Smith (2002) stated that performance indicators used to assess performance are chosen for administrative convenience; maybe some performance indicators are simply more valid than the others.
The OFSTED rate schools and put them into a league table, pressuring schools to perform well. However, the nature of an inspector’s judgement is too subjective to be truly illustrative of performance. Value-added is a good PM method in the way that it looks at factors beyond a schools control to make a more objective and in-depth evaluation of performance.
In conclusion, PM will only be useful if it is used by management to make improvements, and as Talbot (2002) says, current PM is rich in data but poor in information. This is because it is difficult to measure performance, especially since performance can be defined in differently by various people. Through the assignment it has been illustrated that PM is becoming more extensive, external and intensive with the aim to improve. This is a signal that performance is improving, but current PM methods in the healthcare and educational sectors are adequate in measuring performance.
References
Acute Trusts (2001) NHS performance ratings
http://www.performance.doh.gov.uk/performanceratungs/2001/index.html
[Accessed 26th March, 2007]
Audit Commission (2000) Aiming to improve: the principles of performance measurement
http://www.audit-commision.gov.uk/reports/MANAGEMENT-PAPER.asp?
[Accessed 26th March, 2007]
Bird, S.M. (2003) RSS working party on performance monitoring in the public services, Royal Statistical Society, London
Boukaert, G. (1996) Measurement of public sector performance: some European perspectives, pp.223-237 cited in Boukaert and Pollitt, 2004.
Boukaert, G. and Pollitt, C. (2004) Public management reform: a comparative analysis, Oxford
Bovaird, T. and Loeffler, E. (2003) Public management and governance, Routledge
Carvel, J. (2002) New stars for old data, Society Guardian, 30th May
http://society.guardian.co.uk/modsocialserv/comment/0,,803171,00.html
[Accessed 29th March, 2007]
Caulkin, S. (2004) Against the grain, Society Guardian, 31st March
http://politics.guardian.co.uk/publicservices/story/0,,1181084,00.html
[Accessed 26th March, 2007]
Gilroy, P. and Wilcox, B. (1997) Ofsted, criteria and the nature of social understanding: a wittgensteinian critique of the practice of educational judgment, British Journal of Educational Studies, Vol.45, (1), pp.22-38
Handler, A., Issel, M. and Turnock, B. (2001) A conceptual framework to measure performance of the public health system, American Journal of Health, Vol.91, (8), pp.1235-1239
Moullin, M. (2004) Eight essentials of performance measurement, International journal of Healthcare Quality Assurance, Vol.17, (3), pp.110-112
http://www.emeraldinsight.com/Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0620170301.pdf
[Accessed 26th March, 2007]
OFSTED (1994) The handbook for the inspection of school, London, OFSTED cited in Gilroy and Wilcox, 1997.
Pidd, M. (2005) Perversity in public service performance measurement, International Journal of Productivity and Performance Management, Vol.54, (5/6), pp.482-493
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Propper, C. and Wilson, D. (2003) The use and usefulness of performance measures in the public sector, Oxford review of economic policy, Vol.19, (2), pp.250-267
Smee, C. (2001) Measuring up
http://www.oecd.org/dataoecd/48/22/190033.pdf
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Smith, P. (2002) Performance management in British health care: will it deliver? Health Affairs, Vol.21, (3), pp.103-115
Appendix A
Key Performance targets
Performance ratings set against the following key targets stated by Acute Trusts (2001):
- inpatient waiting
- outpatient waiting
- breast cancer waits
- financial performance
- 12 hours and trolley waits
- Cancelled operations
- Treatment of staff
- Hospital cleanliness
- Critical reports from the Commission of Health Improvement
Appendix B
Performance Assessment Framework
Six categories of performance:
Appendix C
An example of an OFSTED (2007) report of Chapel Street Primary School, Manchester:
Key – Grade 1 Outstanding
Grade 2 Good
Grade 3 Satisfactory
Grade 4 Inadequate
What the school should do to improve further
- Ensure that children in all year groups are making good progress in order to raise standards.
- Plan appropriate levels of challenge in all lessons for different groups of learners, particularly the more able children.
- Ensure that all teaching is leading to good learning.
- Raise the levels of attendance.
