How Performance Management Works: Comparing External Accountability and Internal Learning Regimes

• In Event: Performance Management, Budgeting Reforms, and Organizational Design

Abstract

Purpose:
Although performance management (PM) is widely used in public organizations, studies of its effects on organizational performance have produced mixed results. This suggests that its effectiveness depends on organizational and institutional conditions. Using qualitative analysis, this study explores how PM works inside organizations—processes that previous research has often treated as a “black box”—and why its effects may vary across settings.

Theoretical Framework:
The study draws on Jakobsen et al.’s (2018) distinction between external accountability (EA) and internal learning (IL) regimes. An EA regime, which links goal attainment to rewards and sanctions through strong external incentives, may be ill suited to public organizations whose tasks are complex and rely on employees’ autonomous motivation. By contrast, an IL regime—under which organizational actors have greater discretion to define goals and performance measures—may improve performance by strengthening autonomous motivation and reducing unintended behaviors. In practice, elements of both regimes may coexist.

Japan’s public libraries offer a useful setting for comparison. Many libraries have voluntarily used PM, guided by professional norms, making them plausible IL cases. Meanwhile, under Japan’s Designated Administrator System, an increasing number of municipalities have contracted out library operations. Providers are selected competitively, while municipalities set goals and monitor performance, bringing these arrangements closer to an EA regime.

Research Questions and Methods:
The study asks: (1) Through what processes and mechanisms may PM contribute to improved organizational performance? (2) How do these processes and mechanisms differ between IL and EA regimes? It compares ten public libraries: five municipally operated (MO) libraries and five designated-administrator (DA) libraries. The study draws on semi-structured interviews with library managers, other staff, and municipal officials, together with organizational documents. Interview data were analyzed using process coding, causation coding, thematic analysis, and visual mapping.

Results:
Organizational goals did not always lead to goal-directed action. Staff awareness of targets varied, and interim reviews that showed performance was falling short of targets often prompted corrective action. The frequency of performance reviews thus appeared to matter.

Both MO and DA libraries engaged in organizational learning and service improvement, but they faced different incentives. MO libraries generally set attainable targets and had more scope to consider longer-term strategic directions. Competitive selection and municipal monitoring encouraged DA libraries to propose more ambitious plans and review progress more frequently. Yet DA libraries also retained professional autonomy and learning-oriented practices. The observed DA arrangements thus combined elements of both regimes rather than fitting neatly into either one.

Overall, the findings suggest that PM operates through the interplay of goal setting, feedback, external incentives, and professional autonomy within particular institutional arrangements.

Author

• Satoko Nancy Tanabe, Waseda University
  Presenting Author