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Measuring Performance in the Public Sector:
Philippine Experience
Magdalena L Mendoza
Senior Vice-President, Programs
Development Academy of the Philippines
International Conference on Public-sector Productivity
9-11 August 2016, Kuala Lumpur, Malaysia
Outline
I. Background and performance challenges
II. Results-based performance management
III. Performance-based incentives
IV. Implementation results
V. Lessons learned
It is RESULTS that matter
• “If you don’t measure results, you can’t tell success from failure
• If you can’t see success, you can’t reward it
• If you can’t reward success, you’re probably rewarding failure
• If you can’t see success, you can’t learn from it
• If you can’t recognize failure, you can’t correct it
• If you can demonstrate results, you can win public support.”
From: Osborne and Gaebler in Reinventing Government, 1993
Structure of the Philippine Government
LEGISLATIVE EXECUTIVE JUDICIARYSupreme Court
Trial Courts
Special Courts
Court of Appeals
Sandiganbayan
Senate of the Philippines
House of Representatives
Office of the PresidentOffice of the Vice
PresidentDepartments
Other National Agencies
Local Government Units
As Chief Executive, the President of the Philippines exercises control over all executive
departments, bureaus, and offices.
Performance Challenge #1: Results that matter to citizens
CitizensProbity
Process
Performance
Program
Policy
Performance Challenge #3: Monitoring and reporting accomplishments
Office of the President
Oversight Agency
Oversight Agency
DepartmentAttached Agency
Department
Regional Office
Provincial/Field Office
Agency
Inter-Agency Body
Oversight Agency
Oversight Agency
Oversight Agency
Oversight Agency
Oversight Agency
Oversight(branch)
Field Office
Performance Challenge #4: Changing culture and mindsets
Across-the-board incentives
“Skewed” performance evaluation
“Penalty for poor performance is something the bureaucracy is avoiding”
President’s policy with respect to performance
President Benigno S. Aquino III2010-2016
• Straight path, no corruption
• Citizen is the boss
• Deliver results that matter to ordinary citizens
• Do away with incentives systems where everybody gets the same
President Rodrigo Roa Duterte2016-2022
• Make people feel safe
• Reduce the processing time to three days
• Solve traffic problem
• Clean government stiff penalty for corruption and poor performance
Policy issuances on performance and incentives
Administrative Order No. 25
s. 2011
Executive Order No. 80 s. 2012
Executive Order No. 201 s. 2016
AO No. 25 “Creating the Inter-
Agency Task Force on the
Harmonization of the National
Government Performance
Monitoring, Information and
Reporting Systems” issued by
President Benigno S. Aquino III on December 21, 2011
EO No. 80 “Directing the
adoption of the Performance-
Based Incentive System for
Government Employees”
issued by President Aquino III
on July 20, 2012
EO No, 201 “Modification of
the Salary Schedule for
Civilian Government
Personnel” issued by
President Aquino III on
February 19, 2016
Objectives of AO No. 25 on Harmonization
• Establish a unified Results-Based Performance Management System to integrate the efforts of government agencies relative to the National Leadership’s Agenda
• Use the RBPMS as basis for determining entitlement to performance-based allowances, incentives, or compensation of personnel
Sub-TWGon Outreach
and Change ManagementHead: CSC
Sub-TWGon Research and PlanningHead: DBM
Composition of Inter-Agency Task Force
Technical Secretariat
Sub-TWGon Implementation
and MonitoringHead: OP
• Office of the President• Department of Budget and Management• Department of Finance• NEDA• Presidential Management Staff
• CSC• COA• CESB
• Ombudsman• NCC• GCG
• CHED• LWUA• DILG
• DAP
Partner Agencies
Principal Agencies
CSC- Civil Service CommissionCOA – Commission on AuditCESB – Career Executive Service Board
NCC – National Competitiveness CouncilGCG - overnance Commission for GOCCsCHED – Commission on Higher Education
LWUA – Local Water and Utilities AdministrationDILG – Department of the Interior and Local GovernmentDAP – Development Academy of the Philippines
Performance and Budget Reforms
Performance Measurement
Performance Management
Performance-based Contracting
Performance-based Budgeting
Source: Department of Budget and Management
Program Expenditure Classification (2015)
Performance-Informed Budget (2014)
Accountability for Results
Performance Contracts of Secretaries (2013)
Results-Based PMS & Incentives (2012)
Results Matrix(2011)
OPIF Book of Outputs (2007)
Putting together the systemAligning Societal, Sectoral, Organizational down to Individual Goals
PDP Results
PDP Results
OPIFOPIF
Social Contract
KRAs
BSC
CESPES
Statutory Reqts
PES
Probity & Legal Reqts
Results-Based Performance Management System
GoodGovernance and Anti-Corruption
Human Development &
Poverty Reduction
Economic Development
Security, Justice, and Peace
Climate Change Adaptation
SONA Report &Socio Economic Report
PPARCPriority Program Accountability Report Card
MARC- IMFO Accountability Report Card
MARC- IIManagement Accountability Report Card
Strengthened Performance Management
Harmonize existing performance
monitoring, appraisal and reporting systems
Rationalize the current across-the-board
bonuses
Link incentives with results that matter to
the citizens (ramdam ni Juan)
#ICPSP2016
Objectives of the Performance-Based Incentives System
• From “mediocre” to excellence in performance
• Adequate recognition and additional compensation to delivery units and employees based on performance results
– Rationalize across-the-board incentives
– Promote team spirit
– Strengthen performance appraisal
1717
Guiding Principles
Simple, credible and easy to implement
Flexibility
RBPMS as the transparency mechanism
Gradual transformation of other incentives/benefits schemes into performance-based
18
Performance-Based Bonus (PBB)
– top-up bonus based on delivery
unit’s/individual’s contribution to the
accomplishment of agency targets
Performance-Based Incentive System
Productivity Enhancement
Incentive (PEI) – across-the-board
bonus of employees
Key Features of the PBB
• Performance targets using verifiable and credible indicators of performance based on the RBPMS pillars
• Good governance conditions
• Whole-of-department approach
• Group eligibility before individual eligibility
• Forced ranking of delivery units and personnel
Criteria and Conditions of the PBB
• Priority program targets
• Major final outputs
• Support to operations
• General administrative service
Physical targets
• Statutory and other legal requirements
Good governance conditions
• Cascading of targets
• System of rating and ranking
• Communication and change management
Performance management
Good Governance Conditions
1. Agency Transparency Seal
2. Citizen’s Charter or its equivalent
3. PhilGEPS posting
4. Liquidation of cash advances
5. Statement of Assets, Liabilities and Net Worth
Physical Targets
• Performance Contract of Secretaries (outcomes)
• Targets agreed with the President under the Five Key Results Areas (outcomes)
• Targets on Ease of Doing Business
Priority program targets
• Congress-approved performance targets
• Customer-oriented results
• Performance indicators – quality, quality, timeliness, efficiency
Major Final Outputs
• Common target - quality management system
• Target set by Head of Agency
Support to Operations
• Budget utilization rate
• Mandated financial reports
• Annual procurement plan and assessment
General Administrative Service
Initiation Phase
Harmonization Phase
Stabilization Phase
Institutionalization Phase
2012
2013
2014
2015
P
I
E
P
P
I
I
M
M
E
E
Phases of Implementation
2016
Refinement
P
I
M
E
M
2012 & 2013
Performance-Based Bonus:
Eligibility Criteria and Conditions
GGC
Physical targets
Transparency Seal, PhilGEPS posting, Citizen’s Charter (ARTA), Report on
CA, SALN (*2013)
KRA targets
MFOs: 3 Strategic Indicators per MFO
STO: 2 most Significant indicators
GASS: 2 most significant indicators, COA FS, Budget
Utilization Rate (*2013)
Transparency Seal, PhilGEPS posting, Citizen’s
Charter (ARTA), SALN
KRAs, OP Planning Tool, EODB targets
STO: QMS milestone or Opn Manual, ISO (*2015)
and 2nd STO indicator
GASS: COA FS, Report on CA, BFARS, BUR, Annual
Procurement Plan,APCPI (*2015)
2014 & 2015
MFOs: All MFO targets based on GAA
Source: AO 25 Inter-Agency Task Force
Performance Rating and Ranking
Delivery Units
Individuals
FY 2012 FY 2014-FY2015
Rank Distribution
Best 10%
Better 25%
Good 65%
Rank Distribution
Best 10%
Better 25%
Good 65%
Rank Distribution
Good (Better/Best)
Best 10% (15%)
Better 25% (30%)
Good 65% (55%)
FY 2013
Same
Rank Distribution (OPPT/EODB)
Best 10% (15%)
Better 25% (30%)
Good 65% (55%)
Rank Distribution
Best
DU
Better
DU
Good
DU
Best 20% 15% 10%
Better 35% 30% 25%
Good 45% 55% 65%
* Delivery units that did not meet at least 90% of targets are excluded from ranking
* Individuals with less than “Satisfactory” rating excluded from ranking
Source: AO 25 Inter-Agency Task Force
Compliance with Good Governance Conditions
Source: AO 25 Inter-Agency Task Force
[1] from 32% level in 2011, figures until 2014 based on sampling[2] from 79.8% compliance in 2011[3] from about 30% compliance in 2011[4] based on 100% check
[1]
[2]
[3]
[4]
Integrated Performance Assessment by Oversight Agencies
PMS
CHED
OP
CSC
OCS
AO 25 IATF
Departments
COA
Ombudsman
DBM
GPPB-TSO
GQMC CHED GGC LWUA
NCC
DILG
SUCs GOCCs LWDs
Executive Offices
Non-compliance list
NC list
LGU
PhilGEPS
Better understanding of agency roles and
mandates
Improvements in quality of performance
indicators
High compliance to governance standards
Improvements in management practices
Clear and measurable standards, as well as
timely and accurate information, needed
Incentives “pull” employees towards achieving
set goals
Use results for capacity development
Key Gains & Lessons Learned
Source: AO 25 Inter-Agency Task Force
Changes in Performance Indicators
• Emphasizing quality over quantity = focusing on
the impact of the service
• Cascading of performance targets to delivery
units = understanding roles and strategy
• Posting of agency performance scorecards =
accountability and transparency
• Linking the bonus to agency and individual
performance = fostering teamwork and
meritocracy
32
PBB is improving performance in government
• Support for the PBB is strong across all government department/bureaus and performance ratings (good, better, best employees)
• Employees perceive PBB as a performance driverand motivation for public service
• PBB is perceived to have induced improvements in management practices; greater teamwork, better target setting and monitoring, and fostering trust within units.
• Employees do not believe that PBB has increased favoritism or hurt motivation
• Except the teachers, staff do not believe PBB has had a positive effect yet on recruitment
• One area of concern is that some staff in the lower performance categories view the PBB individual rating process as not transparent
Study on Pay
and Performance in the Philippine
Civil Service
Feedback from Agencies
Q1: The PBB has contributed to the way
we monitor our organizational performance.
Q2: The PBB has contributed to the way
our employees perform.
Q3: The PBB has contributed to the way
we provide our service to the public.
Responses based on 5-point Likert scale:
(5-Strongly Agree, 1-Strongly Disagree)
*216 respondents participated for FY 2014 cycle survey
*356 respondents participated for FY 2015 cycle survey
Average Response
FY 2014 FY 2015
4.36 4.29
4.06 3.96
4.15 4.04
Source: AO 25 Inter-Agency Task Force
“ PBB reminded us of our
responsibility to the public”
“Performance now has a sense
of accountability”
“Now we have an accurate
reporting and evaluation
system”
“Now there is closer coordination
between delivery units”
“OPIF provided clear objectives and
measurable performance targets which operating units try to accomplish
‘Employees are aware of their performance”
What employees say about RBPMS and PBIS…
Now we have an easier process of monitoring
programs because of it is more rational and
employees are more goal oriented
Department of Environment and Natural
Resources (DENR)
Best Practices and Impacts of PBB:
Annual issuance of DENR Internal Guidelines for PBB.
Created Performance Management Group (PMG), sub-committees
and designated Focal Persons per qualifying indicator *
Qualifying indicators are requirements covered in the PBB.
Clustered units and ranking indicators**
Ranking indicators are requirements beyond of those covered in the PBB.
Harmonized PBIS-PBB and SPMS.
Strengthened IEC to ensure transparency & accountability.
Systematized system of submission of Cash Advances.
Source: Department of Environment and Natural Resources
Next Steps
• Performance indicators Sectoral Outcomes
• Harmonization of individual performance evaluation
• Enhanced Performance-Based Bonus
• Using results for capacity development
• “paperless” system