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PROFILE

SHABBIR H. KHANDWALA

COLUMN FOR THE RECORD
COMPANY PROFILE 1- ZRG CALL CENTER AT WORK: BANK ALFALAH CALL CENTER
2- SAMSUNG ELECTRONICS - WORLD'S FASTEST GROWING BRAND IN THE WORLD.
SOCIETY 1- PERFORMANCE MEASUREMENT AND GOOD GOVERNANCE
2- GLOBAL CORRUPTION
ENVIRONMENT TREES PLANTING IN DESERT AREAS OF COUNTRY

 

HR IN PAKISTAN
PERFORMANCE MEASUREMENT AND GOOD GOVERNANCE

The development of suitable performance measure will be a trial and error process in Pakistani scenario

By JAWAD NAQVI
Email: thejawad@yahoo.com

Nov 10 - 16, 2003 
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The success and survival of new local governance system depends upon its ability to deliver to the public. Instead of statistical juggling that has been a hallmark of our politicians and bureaucrats, people need physical and tangible services in the community they belong. Recent failure of civic life in Karachi due to monsoon rains is a stark reminder to our leadership that all is not well, and actions speak louder than words.

Pakistan's local governance reforms have been bold in terms of their scale, and speed of implementation. Introduced in August 2001, it will be premature to comment on these reforms on the extent and volume of public concern reflected in the media. Part of this concern comes from vested interests (e.g. bureaucracy that has been deprived of its absolute powers), and is partly due to the fact that newly elected councils are getting used to new rules of business. Some inter-departmental functional details are being fine-tuned, and with the exception of police department's performance, people in general are 'not unhappy' with the new system. This state of being 'not unhappy' is an achievement, as we see new system having overthrown the ancient rule of bureaucracy, a legacy of British Raj in India.

A creation of National Reconstruction Bureau (NRB), the new system is aimed to produce good governance and quality management practices in local communities. Under the devolution of power plan, traditional system has been subjected to drastic changes, and all departments have undergone or are in the process of restructure for greater efficiency. This means better services to local community by curtailing red-tape, nepotism, and duplication and avoidance of responsibilities in housing, public health engineering, transport, public safety and other departments.

In contrast to private enterprise where it is common to gauge performance of projects, and human resource etc to improve overall business health, performance measurement is a relatively new concept in public sector. Our definition of performance measurement will be different in the framework of local governance, because of differences in evaluation criteria and strategic objectives. In local governance, public satisfaction instead of volume of earnings is a relevant criterion. The success of new system will be gauged by the outputs i.e. services delivered, and whether those services made a difference in everyday life of ordinary citizens.

A performance measure or indicator can be as simple as measuring actual expenditures with the budget allocated for a project, and can be as complex as gauging satisfaction level of local youth with employment opportunities in the area. Besides tracking and improving performance, performance measurement is also useful due to its focus on goals, legal compliance and social responsibility. However its cost must not exceed the anticipated benefits. Pakistan is a poor country and cannot afford to spend huge payoffs for so-called consultants and expensive dossier studies. In practical terms, some benefits can be hard to quantify or may be too far to make a realistic estimate of.

We can use two types of performance indicators to gauge the effectiveness of new local regime i.e. corporate effectiveness, and community satisfaction. Corporate effectiveness deals with the effective and efficient utilization of scarce resources available, to achieve time-bound goals in different departments e.g. education, employment, sanitation, public safety, industry etc. Community satisfaction deals with the actual feedback by local citizens about the level and quality of services being delivered. There is a greater need to benchmark performance standards across different departments, and a periodic review to track progress of corporate effectiveness and community satisfaction. Annual plans for each department may need to be customized in terms of specific local needs, size of community, and diversity in cost and services.

As a rule, a performance measure should relate to strategic goals of the department being managed. A simple and understandable measure is always easy to collect and analyze. It should be quantifiable as a number, ratio or a percentage and be an integral part of the departmental objectives e.g. unemployment ratio in the youth between 20 and 30, or the number of crimes in a particular area per month etc. It should always be linked to a standard or benchmark e.g. for the next fiscal year, our target is to improve female primary school enrolment rate from current 40% to 60% etc. It should be focused on community service and welfare, and opportunity cost must be kept in mind while deciding about allocation of finance and other resources e.g. trade off between building a primary school and renovation of municipal committee building etc. There should be a regular feedback mechanism through which genuine citizens and not the toadies of establishment can express their candid opinion about pros and cons of new initiatives. Performance measures should be periodically reviewed to track if the system is moving in the right direction at the right pace, and if any corrective action is necessary at certain level?

Besides human resource development in local governance (that I have discussed in a previous article), there is also a need to improve financial reporting in the local government organizations. As a practice, departments do not accurately report a significant portion of their assets, liabilities and costs. Some of these inaccuracies are intra-departmental and affect the performance of one department only, whereas many such as intra-departmental transactions affect the overall government. No wonder that the local government institutions are generally unable to correctly measure full cost of a project and in the absence of financial monitoring, cannot manage the performance of its programs. Many such departments do not have timely, correct and practical financial information. As a consequence, they lack sound controls with which to make informed decisions and to ensure accountability as a continuous process.

 

 

There is a multitude of benefits associated with a systematic recording, analysis and review of financial performance data. Good financial reporting will result in good financial management, which is vital to offer viable and spotless services to the community. It will help in controlling government expenditures, in setting fiscal performance benchmarks, and in improving the efficacy and productivity of different projects. NRB's new local government system should make it mandatory to produce auditable financial statements by all concerned departments under its administration. It may involve installation of a suitable financial accounting system at all levels, and prohibition of discretionary overspendings.

The development of suitable performance measure will be a trial and error process in Pakistani scenario where we do not have a history of accountability and audit. There may be a frequent need to fine-tune this system over time with an aim to make it more viable, cost effective, transparent and capable to deliver. Monitoring and reviewing performance measures entails a culture of continuous improvement and acceptance, and demands from us a blend of sincerity, competence and commitment. The NRB has set the ball into motion. It will be useful to help them improve this system with a constructive frame of mind.

Jawad S. Naqvi is a human resource practitioner in Lahore, Pakistan. He may be reached at thejawad@yahoo.com