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 #2: Cascading & aligning goals

GOAL GOAL

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

Participation Rate

Source: AO 25 Inter-Agency Task Force

DQ - 21% DQ - 19% DQ - 8% DQ - 12%

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

Agency Performance Scorecards

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

THANK YOU.