Anatomy of a performance management system: the elusive path from targets to productivity

The performance management trend that has swept over public organizations in the last 25 years has had its share of successes and failures. Even in the organizations that have a good track record with performance management, the benefits of the system are sometimes ambiguous. In this paper, we study the link between measured results and productivity in a public organization that has a strong history of performance management using indicators. Across its different missions, the Belgian federal National Employment Office measures all aspects of its activities and uses performance targets to evaluate its results. Using statistical analysis of 5 years of monthly data across 30 regional offices, we found links between productivity and both indicators scores and targets, indicating that the productivity of employees increases when targets are harder to meet. However, the causality links between results, targets, and productivity are inconsistent across different activities, indicating areas where the performance management system works more effectively than others. Indeed, the link from targets to productivity is far from straightforward, as correlations are specific to activities that meet certain conditions, such as moderate task complexity and degree of automation. More research is needed to elaborate on the specific conditions.