1. Prof. Datuk Dr. John Antony Xavier Graduate School of Management Universiti Putra Malaysia 10 th May 2012 Performance Management in the Malaysian Public Service: Wallowing in the Core or Tinkering at the Frontier?

2.  Evolution of performance management  Who drives performance management?  Issues in performance management  How we solve them  Lessons from the Malaysian experience Prof. Datuk Dr. John Xavier 2

3. A HIGH PERFORMANCE PUBLIC SERVICE SETTING STRATEGIC DIRECTION BUILDING WORKFORCE COMPETENCY IMPLEMENTING QUALITY STAFFING MANAGING PERFORMANCE, RECOGNITION AND REWARDS ENSURING ORGANISATIONAL CAPACITY SHAPING A HIGH PERFORMANCE- WORK CULTURE Prof. Datuk Dr. John Xavier 3

4. ReformDate 1. Programme and Performance Budgeting System (PPBS)1968 2. Micro-Accounting System (MAS)1987,1992 3. Modified Budgeting System (MBS)1990 4. Productivity Improvement1991 5. Total Quality Management1992 6. Clients’ Charter1993 7. ISO1996 8. Benchmarking1999 9. Key Performance Indicators (KPIs)2005 10. Treasury Strategic results areas and strategic KPIs2007 11. Auditor-General’s Star Rating on Financial Management2007 12. MAMPU’s Star Rating System on Public Management2007 13. KPIs for Departmental Heads2008 14. National Key Results Areas and Ministers’ KPIs2009 15. Outcomes-based budgeting2011 Prof. Datuk Dr. John Xavier 4

5.  Bulk of reforms under Mahathir’s leadership  None had the impact as that of the Government Transformation Programme and its NKRAs and MPKIs Prof. Datuk Dr. John Xavier 5

6. 6 PM’s cabinet announcement speech (9th April 2009) …represent our nation’s top strategic priorities… …focus on outcomes… “…introducing a new paradigm for performance through rigorous use of KPIs… …these goals will hold my Government accountable to the Rakyat… …I will be personally involved in reviewing the progress…” PM’s 100-Day speech introducing N-KRAs … the breadth and depth of the initiative is unprecedented… We are committed to undertake this transformational process… “… the country’s leadership… will bring a new approach to face a new age… … involve deep commitment and high demands from civil servants” PM’s Statement on Government Transformation (12th Sept 2009) “ Our real work will begin as we make the transformation of government services happen” “ The KPI / KRA offer clear measures designed to ensure that the government is working to better serve the needs of Malaysians” “ The Government is set to begin the transformation process”

7. Prof. Datuk Dr. John Xavier 7 National Key Result Areas align with: 1Malaysia, People First, Performance Now People First National Key Result Areas Crime Prevention Reducing Corruption Access to Quality and Affordable Education Raising the Living Standard of the Low-Income Earners Upgrading Infrastructure in the Rural and Interior Regions Improving Public Transportation Strengthening National Unity Government for the People Enhanced Public Service Delivery Performance Now 1 Malaysia

8. Delivering on One Malaysia, People First, Performance Now Reducing crime Improving urban public transport Fighting corruption Raising living standards of low income households Widening access to quality and affordable education Improving infrastructure in rural areas Lead Ministry MOHA MOT KPWKM MOE BHEUU MRRD Prof. Datuk Dr. John Xavier 8

9.  Political intervention in service delivery improvements was inevitable after the 2008 political tsunami. It’s now about political survival  Coordination lynchpin  Political side – PM/DPM  Public Service - The Chief Secretary of the Government cum Head of Service  PM heads the monthly reviews of NKRA performance and six-monthly MKPI reviews  The Chief Secretary chairs all reform coordinating committees  Stakeholders are consulted Prof. Datuk Dr. John Xavier 9

10.  Ministers’ KPIs  NKRAs – emulating best practice but formulation and implementation one of its kind Prof. Datuk Dr. John Xavier 10

11. We took a radical approach 6 + 1 Labs A Open Day B GTP Roadmap C Monthly & Annual Comms D Establish in detail what needs to be done Share lab output with people and seek their feedback Tell the people what we are going to do Tell the people what we have delivered 4 months We are the only Government who is doing all of the above

12.  NKEAs – another pioneering effort in the steps of NKRAs  Renewed focus on outcomes  Integrating planning and budgeting – Capital budgeting (5-year plans) and operational budgeting (OBB)  Aligning performance with the national agenda Prof. Datuk Dr. John Xavier 12

13. Source: EPU

14.  Ensuring enforcement  OBB will hit the agency pockets for non- conformity:  integrated approach (combined operating and development expenditure) to PMS  NKRA – a huge success as it is politically- driven from the top  Pressure upon the public service to demonstrate its relevance  Alignment between department head’s KPIs and Minister’s KPIs Prof. Datuk Dr. John Xavier 14

15.  Plethora of initiatives  Difficulty of measurement  Data availability and integrity  Lack of alignment to the national agenda of agency goals and budget structures  Gaming and number crunching  The elusive outcomes – how to measure them?  Flagging interest after the ‘flavour’ is gone Prof. Datuk Dr. John Xavier 15

16.  Question zero –  Measurement of what?  What are we trying to accomplish? Prof. Datuk Dr. John Xavier 16 The most common form of stupidity is forgetting what we are trying to do - Nietzsche

17.  OBB:  5 strategic thrusts  24 KRAs  30 programmes  200 KPIs to measure outcomes Prof. Datuk Dr. John Xavier 17

18. Prof. Datuk Dr. John Xavier 18 SEC-GEN Tier 1 DY SEC-GEN (P) DY SEC-GEN(O) Tier 2 DIVISION DIRECTORS Tier 3

19.  Data management – Leverage data from NKRAs  Plethora of initiatives - Integrate performance assessments of central agencies in the CEO scorecard Prof. Datuk Dr. John Xavier 19

20. Cluster Performance Dimension Weight- age Rating KPI 1 BT 2 OT 3 ET 4 ST National Competitiveness 10%36810 10%36810 Public Service Delivery Efficiency & Effectiveness 20%6121620 20%6121620 Governance & Accountability 10%36810 10%36810 Civil Service Transformational Leadership 10%36810 10%36810 National Competitiveness Index Auditor-General’s Rating MAMPU Rating Behavioural Competency Assessment Climate for Performance Employee Satisfaction Index (Assessed by direct reports) (360 0 assessment by KSN & KPPA (LNPT), selected KSUs/KPs and direct reports) Agency Specific Personal Effectiveness 30%60%80%100% Scorecard: Director General, Economic Planning Unit ( EPU ) Quality of Consultation (Assessed by Minister) Clients’ Charter Compliance Index GDP Growth Rate Common Across Civil Service Agency-specific KPIs Strategic KPIs (Treasury) Achievement of macro economics targets by 2010  GDP (5%)  Unemployment of less than 3.5%  Bumiputera equity ownership of 30%  Eradicating poverty to 2.0%  Eradicating hardcore poverty to 0% 80% achievement of National Development Expenditure

21.  Difficulty in performance measurement – proxy indicators, process measurement  Gaming – benchmarking KPIs and targets with other countries Prof. Datuk Dr. John Xavier 21

22.  Responsive governance and citizen participation  Focus on the touch points of the public  Low-hanging fruits before the high-hanging ones  NKRA driven  Persistent follow-up Prof. Datuk Dr. John Xavier 22

23.  Problem-solving approach vs. best practice approach  Wave-like strategy on PMS  Must be politically driven from the top Prof. Datuk Dr. John Xavier 23

24.  Getting KPIs right takes several cycles  We will only learn by doing  We won’t get it right the first time  KPIs are only one part of performance management.  We must follow-though with regular reviews of performance  Use feedback to:  improve departmental performance  determine rewards and consequences Prof. Datuk Dr. John Xavier 24

25.  Performance management is one important part of ensuring delivery  Other critical elements:  managing perceptions and expectations  building capacity  leadership commitment to stretch targets  structure, systems and processes  link between performance and reward Prof. Datuk Dr. John Xavier 25

26.  Resources must match targets  Quick wins to maintain momentum  Focus on few key results areas that are most important for the public  Buy-in if there is a clear link between KPIs and public happiness  If KPIs are seen only as assessment tools, they might be sabotaged  Better no KPIs than wrong KPIs Prof. Datuk Dr. John Xavier 26

27. johnantonyxavier@hotmail.com johnantony@putra.upm.edu.my