Performance Expectations (in public management)
Performance expectations are predictions of what is hoped for in the future and are understood to be met most of the time.
(Mayne 2002, 42-44)
The following is drawn from J. Mayne's "Reporting on Outcomes: Setting Performance Expectations and Telling Performance Stories” in the Canadian Journal of Program Evaluation:
"There are two concepts of performance expectations. More traditionally, expectations are seen as predictions (targets) of what is hoped for in the future given the resources available, with the understanding that they will be met most of the time. Alternatively, expectations can be seen as challenges to rise to. These are often referred to as stretch targets, set to provide clear direction on where the program is striving to be in the future. Stretch targets are set at a high enough level that they cannot easily be met with existing resources, and thus it is understood that they often will not be met. Their purpose is to set results to be strived for rather than results to be met with reasonable certainty. There is an expectation that in stretching, innovation will be encouraged and opportunities to learn and improve will be sought.
Performance expectations set as predictions (targets) can play a positive role, but they also have a number of shortcomings:
Performance reporting can be as much a report on how good a prediction was as on how well a program is performing.
Readers of a performance report, and many staff, still do not really know what is being reported: Are these stretch targets or safe predictions? Are they supposed to be easily met?
Uncertainty about achieving outcomes, given the various factors not under the program’s control, can result in setting targets only or mainly for outputs.
Predictive targets are set with a view to reporting zero variance. This is not really reporting on how well the program is performing; the question remains - could the program have done better? It is also less likely to encourage innovation and learning; a manager may wonder - since the target has been met, why try harder?
The predictor model of setting expectations probably works better for output-based reporting than outcome-based reporting, since considerably more certainty can be established about the levels and quality of outputs produced. It could be argued that reporting on outcomes as part of performance reporting ought to mean using expectations as challenges - that is, stretch targets. This type of expectation reflects the learning model underlying the concept of managing for results. One of the many advantages of using stretch targets as expectations is the recognition upfront that many of these expectations will probably not be met, but that much learning will have taken place. This learning should be reported as achieved performance.
In between predictive and stretch targets might be predictive targets that are increased each year and the planned increases in levels that are set out beforehand publicly, so as to stretch an organisation. Also in between would be targets that are quite challenging but, with enough effort, can be met. Left on their own, most organisations would probably opt for the safer predictive targets to avoid having to explain why (stretch) targets have not been met. Challenging targets - as in the case of many of the Public Service Agreement targets in the U.K. (HM Treasury, 2002) - are usually set as the result of pressure on departments from a central budget office. The Auditor General (2000a) in Canada has pointed to the limited role played by the Treasury Board in requiring departments to set clear and concrete, much less challenging, targets."
Mayne, John. 2002. "Reporting on Outcomes: Setting Performance Expectations and Telling Performance Stories.” Canadian Journal of Program Evaluation 19 (1): 31-60.