Setting Reasonable Performance Targets for Public Service Delivery
Reaching agreement on a reasonable performance target is a challenge, with costs associated with getting it wrong. Attention in the literature has focused on the potential negative effects of gaming or of creaming. However, even if there is no gami...
| Main Authors: | , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/03/17453225/setting-reasonable-performance-targets-public-service-delivery http://hdl.handle.net/10986/13178 |
| Summary: | Reaching agreement on a reasonable
performance target is a challenge, with costs associated
with getting it wrong. Attention in the literature has
focused on the potential negative effects of gaming or of
creaming. However, even if there is no gaming or creaming
taking place, there can still be costs associated with
setting a level of the performance target that is either too
low or too high. On the one hand, if the negotiated
performance target is too low, there is a strong risk that
the target would be met without any change in behavior or
performance from what would have been realized without a
performance management system. In that case, there would be
no benefit -- only the cost of covering the administrative
costs associated with developing the monitoring and
management systems. On the other hand, if the negotiated
performance target is too high, there could also be
significant costs. The exact nature of the costs depends on
which one of two unattractive options the principal chooses
to follow once it becomes apparent that the performance
targets were set unrealistically high. If the principal
chooses simply to waive any possible repercussions for the
agents for not meeting the performance targets, this can
undermine the credibility of the system. If the principal
insists on holding agents to meeting the performance targets
-- no matter how unrealistic they were -- this can breed
resentment and adversely affect future productivity. This
paper considers some approaches to target setting that have
been used in the literature and proposes an approach based
on the use of quantile regressions to construct a
Characteristic Adjusted Performance distribution of
performance to guide the selection of targets. The paper
then presents two concrete examples of applications of this
approach related to the setting of targets on School Test
Scores and Improvement in Homicide rates in Police Districts
in the State of Minas Gerais, Brazil. |
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