STRATEGIC PERFORMANCE MANAGEMENT A TOOL FOR PUBLIC SECTOR TRANSFORMATION A STUDY OF SELECTED FIRMS IN NIGERIA
ABSTRACT
The objective of this research work is to examine Strategic Performance Management as a tool for public sector transformation with reference to Federal Inland Revenue Service, National Agency for Food and Drug Administration and Control and the Nigerian Communication Commission. Data for the research were collected through primary and secondary sourëes. The collected data were analyzed in tables and simple percentages, while the hypothesis were tested using the Chi-square statistical technique. The findings of the study show that: (i) Strategic Performance Management have resulted in increase in tax revenue generated by FIRS and improved regulation by NAFDAC and NCC. (ii) Strategic Performance Management is relevant in transforming public sector organization into efficient institutions. (iii) There is a relationship between Strategic Performance Management and Operational efficiency. (iv)The various key performance indicators used to measure performance in public sector are effective in motivating mployees towards achieving pre-determined objectives. Based on the above findings, the study concludes that the public sector can be ran efficiently as in the private sector if performance anagement processes are put in place. Drawing from the conclusion, it is therefore ecommended that efforts should be made to identify simple, meaningful metrics that are driven from the top-down and are relevant to specific stakeholders as they are critical to performance Lmeasurement, success and public sector efficiency. It is also recommended that corporate [nission statement should be motivating for members of the organization and of the society and [hey should feel it worthwhile working for such an organization or being its customer
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
There is increasing demand on government and its agencies to imbibe governance and leadership principles that will enable it function and deliver services more efficiently. This is a global phenomenon. Although the advanced economies are progressively pursuing programmes and implementing transformational strategies aimed at making their institutions more responsive and function at optimal level of efficiency, the developing economies are still at the lows of such efforts. According to McPherson and Ebrig (2005). “Every successful corporate transformation is built upon a solid foundation of effective governance. The private sector has spent years working to develop better models for governing corporate investments and other critical decisions, as well as for monitoring the results of those decisions”. They noted that companies that have gotten governance right have an edge over competitors in reaching and sustaining high performance.
McNamara (1997 – 2008) posits that the private sector efficiency was achieved on the strength of the implementation of strategic performance management systems. He defined strategic performance management as “the systematic process by which an agency involves its employees, as individuals and members of a group, in improving organizational effectiveness in the accomplishment of agency mission and goals.” This system, he contends is largely lacking in the pubic sector.
Following that strong lead from the private sector, government agencies are also seeking to create more effective governance models that can increase their chances for successful transformational efforts in strategy, sourcing, information technology, workforce performance, finance and many other areas. McPherson and Ehrig notes that such governance model cannot simply be lifted from the corporate arena and applied to the public sector without modification “Unique cultural and structural charactenstics of government organizations must be accounted for if governance models are to be successfully applied”
The Federal Inland Revenue Service (FiRS), National Agency for Food, Drugs Administration and Control (NAFDAC), and the Nigerian Communication Commission (NCC) are three institutions that successfully implemented transformational programme with very visible result in terms of operational efficiency The organizations have fully adopted the private sector operational model with highly improved service offerings This research work will therefore focus on the transformation strategy and current operational module to provide a guide for its replication in other government institutions
1.2 STATEMENT OF THE PROBLEM
Private sector operational efficiency is a gulf away from the gross inefficiency of the public sector institutions and agencies. Service delivery in the public sector is at sub- optimal levels. And the reason is that governance culture in those agencies does not emphasize efficiency in its processes and procedures as, could be achi&ved through the implementation of strategic performance management. Their major challenge is lack of ability to implement clear performance measurements that makes it possible to execute ‘corporate strategy successfully. Problems often associated with strategic inefficiency in the public sector organizations includes:
Failure to determine and clearly set out of objectives to be achieved
Non-identification of alternative ways of achieving the objectives.
Non-evaluation of alternatives in terms of its objective-achieving ability
Initiatives for cost-cutting often do not come with concrete delivery plans
And most importantly bureaucratic bottlenecks and inappropriate allocation of resources also hindered efficient public sector performance.
These issues highlighted above threw up the interest to carry out this study to examine how the application of strategic performance management could transform public sector organizations into productive and efficient institutions.
1.3 OBJECTIVES OF THE STUDY
FIRS a few years ago launched a strategic transformation programme to restructure and strengthen its processes and procedures. The objective was to set the platform for greater eefficiency in tax administration and operating process uncommon in the public sector. The outcome of this effort is a significant turnaround in its operations with impressive results. The study therefore aims at establishing the following:
i To determine the extent strategic performance management has resulted in increase of revenue generated by Federal Inland Revenue Service, monitoring and regulatory process efficiency in NAFDAC, and NCC.
ii To determine the relationship between operational efficiency and strategic performance management.
iii To evaluate the various key performance indicators (KPIs) used to measure employee performance in Federal Inland Revenue Service and by extension, other public sector organizations.
1.4 RESEARCH QUESTIONS
The fol1owing research questions were formulated to guide the study:
1. To what extent has strategic performance management resulted in increase of revenue generated by Federal Inland revenue Service, monitoring and regulatory process efficiency in NAFDAC, and NCC?
2. Is strategic performance management relevant in transforming public sector organizations into efficient institutions?
3. Are there key performance indicators (KPIs) in place in the Federal Inland Revenue Service, National Agency for Food and Drug Administration and Control, and Nigerian Communications Commission to measure employee performance and do they motivate?
1.5 STATEMENT OF HYPOTHESIS
Considering the statement of the problems and the objectives of the study, the following
research hypotheses were formulated to guide the study.
H01: Strategic performance management has resulted in increased tax revenues generated by Federal Inland Revenue Service/regulatory compliance of National Agency for Food and Drug Administration and Control, and Nigerian Communications Commission.
H02: Strategic performance management is relevant in transforming public sector
organizations into efficient institutions..
H03: The various key performance indicators used to measure employee performance in
the public sectors are effective in motivating employees towards achievement of pre-
determined objectives.,
1.6 SIGNIFICANCE OF THE STUDY
The following are the importance of the study.
It will be very useful to the management of Federal Inland Revenue Service towards ensuring that corporate goals and objectives are met effectively and efficiently.
This research will also help FIRS, NAFDAC & NCC to know how employee performance could be improved towards achieving corporate goals.
It will enable the Management of public sector institutions to know how strategic management could bring the much needed transformation in the organization.
It will also be beneficial to other public sector agencies that suffer from inefficient management to improve their performance
This research will also be beneficial to student and professionals carrying out further research in the areas of strategic performance management as it will serve as a good reference material.
1.7 SCOPE OF TIlE STUDY
This research work is based on FIRS, NAFDAC and NCC. It examined strategic performance management as a tool for transformation of public sector organizations. The research depends on primary data collected from three institutions.
1.8 LIMITATIONS OF STUDY
The researcher is however, constrained by time and means to reach out to several firms in the industry located in all geo-political zone of the country hut the few covered. (3 in numbei) would foim useful basis foi the conclusions anived at in the study Also in the course of interviewing respondents, the researcher discovered that the iespondents were scared of giving out information necessary lbr the study for the suspicion that the researcher is an agent of the much dreaded “Economic and Financial Crime Commission (EFCC).
1.9 DEFINITION OF TERMS
Performance Management: This refers to activities which ensures that goals are consistently being met in an effective and efficient manner. Performance management can focus on the performance of an organization, a department, employee, or even the process to build a product or services, as well as many other areas
It is also known as a process by which organization align their resources, system and employees to strategic objeëtives and priorities.
There are three types of performance management:
– Long – Cycle Performance Management: This Type of performance management is usually done on an annual, every 6 months, or quai terly basis From implementations standpoint, this area is the one that has traditionally received the most attention This is so for historical ieasons as most performance management techniques/styles predate use of computers.
– Shor t-Cycle Performance Management: This is type of performance management that is usually done on a weekly, bi-weekly, or monthly basis. From implementation standpoint, this sort of management is industry-specific.
– Micro-Performance Management: This is the type of performance management generally done on a by-minute/hour/day basis
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