POLITICIANS AND OUTPUT-ORIENTED PERFORMANCE EVALUATION IN MUNICIPALITIES

Henk ter Bogt

Faculty of Economics, University of Groningen (the Netherlands)

Abstract

Since the mid-eighties many Dutch municipalities have divided their organizations into decentralized units. In addition, most municipalities have introduced all kinds of management instruments derived from the private sector, and have been paying more attention to the outputs of the organizations. This has resulted in the introduction of performance budgets and output budgets, in which quantitative performance data are included. Nowadays, more than in the past, the political administration (aldermen and ‘ordinary’ councillors) of a municipality says that it wants to hold organization units accountable for realized output performance. Similar elements from New Public Management were introduced in several other Western countries.

This paper raises the question of whether politicians use the available quantitative output information to control their organization and in particular to evaluate the performance of top officials. Research questions have been formulated on the basis of ideas about results control and a profit-conscious style of performance evaluation which have been developed by Merchant and Hopwood. In the paper the Hopwood evaluation-styles, which originally refer to the private sector, are further developed for the public sector. Furthermore, the paper is concerned with politicians' attitude towards planning and how they use quantitative performance information.

In 1999, exploratory field research concerning the use of output budgets and output data and the evaluation styles used in actual practice has been conducted in three, by Dutch standards large municipalities, namely Groningen, Leeuwarden and The Hague (with about 170,000, 90,000 and 440,000 inhabitants respectively). Various planning and control documents were studied and several politicians (aldermen and councillors) were interviewed in these municipalities. After the theoretical introduction and the development of possibly relevant evaluation styles, this paper especially concentrates on the findings from the field research. How far and in which way do politicians use the available quantitative output information to control their organization and in particular to evaluate the performance of top managers in the municipalities?

The aldermen paid much attention to manager's activities and the organization's operations and relatively little to outputs. Based on these empirical findings the paper introduces an additional evaluation style, the 'operations-conscious' style. In this style of evaluation, quantitative outputs play some part, but the main question is whether a manager acts as a good ‘facilitator’, i.e. ensures that his organization is functioning well. This aspect is mainly judged in a qualitative way. Besides, important criteria are the way in which a manager deals with short-term problems and with the politician's opinions and personal wishes.

Address for correspondence: H.J. ter Bogt, University of Groningen, Faculty of Economics, P.O. Box 800, 9700 AV Groningen, The Netherlands.

e-mail: h.j.ter.bogt@eco.rug.nl