Performance Management and Rationalityin Public Sector Organisations

Abstract: Abstract and Keywords  The thesis concerns different conceptions of rationality and their implications for organisations, especially in the public sector. The focus is on performance management (as widely defined) within public sector organisations as a subject for exploring these issues. This has long been controversial because seemingly simplistic approaches to performance management persist, despite well recognised shortcomings, such as a tendency to perverse incentives and unintended outcomes.  Therefore, in the kappa, I analyse the notion of instrumental rationality, examine the established critique of instrumental rationality from a ‘political’ perspective and present the dilemma that this creates; i.e. how to improve processes of resource allocation and performance evaluation, while recognising organisational realities such as imbalances in power. The potential of communicative rationality as an alternative conceptualisation of rationality in organisations is then discussed.    The development of public sector management from the fiscal crises of the 1970s is explained, with the rise of the ‘New Public Management’ based on neo-liberal ideas, and the subsequent opposition to it from ‘New Public Governance’ and ‘New Public Services’ paradigms. These potentially give more scope to participative and deliberative processes of generating performance measurement packages and control systems. Moreover, in practice, particularly interesting examples of participatory approaches have been found in developing countries which align with communicative rationality. A critical position is adopted in the thesis, seeking to challenge ‘managerialist’ orthodoxies.  As a theoretical guide to understanding these issues, conceptual frameworks from the management control literature are used. Broadbent and Laughlin’s (2009) conceptual model of performance management systems has been of particular value. They draw on Weber and Habermas to distinguish between instrumental and communicative rationality models and between transactional and relational performance management systems. This enables them to identify two distinct ideal types of ‘rationality clusters’ (instrumental and communicative) to which organisations will incline. They also contend that contingent factors influence where actual organisations are located between these two ideal types.          7  The four papers I have selected for the licentiate from my various publications report on research carried out in three different public sector settings using different methods of investigation. Paper 1 considers the approaches to resource allocation and performance measurement then used by English Health Authorities at the time of writing. In Paper 2 an evaluation carried out at an English police service, utilising cost-consequences analysis, is described and discussed. Papers 3 and 4 concern a performance management regime for the English ambulance service, which became noted for promoting perverse incentives and ‘gaming’, and its subsequent replacement. The first two papers foreground issues of rationality and the last two issues of performance management; but these topics are interrelated and are relevant throughout. It is argued in all the papers that comprehensively ‘rationalistic’ approaches are flawed and that participation, deliberation and dialogue between stakeholders are desirable.