The impact of performance budgeting on the organization
Type
fundamental research project
Start Date
15 December 2005
End Date
31 October 2010
Status
completed
Keywords
Performance budgeting
New Public Management
Description
In many countries, the new public management not only brought new performance-based control but also new budgeting regimes. Labelled one-line budgets (commonwealth countries), lump-sum budgets or performance budgeting (USA) or the purpose of this new budgeting is to increase the room to manoeuvre for public managers on the use of resources. The project is based on the assumption that such institutional changes will not rest without an impact on the organization and its members - especially the top public managers.

The impact of the reform was investigated in several intense case studies with Swiss administrations and published in the award-winning paper "Better Performance with Performance Budgeting? Analyzing Cases of Success and Failure in Public Administrations" in the International Public Management Journal, Vol. 13, Iss. 4
Leader contributor(s)
Member contributor(s)
Helmuth, Utz
Partner(s)
Selected Swiss Cities and Cantons
Funder(s)
Topic(s)
Performance budgeting
New Public Management
Method(s)
Quantitative Analysis of Budget Data
Qualitative Research on Impact for participating Organizations
Range
Institute/School
Range (De)
Institut/School
Division(s)
Eprints ID
36079

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  • Publication
    Beyond the figures: Lump-sum budgeting as a management concept in public sector organizations
    ( 2007-09-18)
    Helmuth, Utz
    As part of the of the New Public Management (NPM) reforms in many countries budgeting has often been a key issue on the agenda of NPM protagonists. Called "one-line budgeting" in the Commonwealth or "lump-sum budgeting" and "devolved budgeting" in other countries, these initiatives have in common that they give more freedom to the administrative bodies. In the following, we will summarize these methods by the term "new budgeting". The legislative bodies substitute a detailed budget by a net sum of money devolved to the administration combined with objectives the latter has to deliver. The idea is to transform an input based controlling of administrations to an output or outcome based controlling. Proponents associate several positive aspects with the new budgeting for public organizations. It is been argued, that the flexibility of administrations will increase, since they are able to allocate resources corresponding to current needs. Further, the motivation of employees should be improved by the responsibility they get. Thinking in terms of costs might increase among public servants. Finally possible conflicts of interest between the purchaser of a service (the administrative bodies) and the financer (the legislative bodies) should be objectified. However, these reforms require a change process in the organizations and might also raise the problem that both bodies have to find their roles within the new power play. In an empirical research project of 1.5 years we examined with a quantitative and a qualitative design consequences of new budgeting in Swiss public administrations. The proposed paper for the ABFM conference reports on the qualitative part of the study, focussing on organizational questions as the impact of power regimes and experiences of public servants from administrations which introduced new budgeting. The research design consisted of semi-structured interviews with employees at the management level. We discuss the idea of leadership through new budgeting and the evolution of degrees of freedom of employees. Another topic are changes in the relationship of legislative and administrative bodies. Interviewees tell about how they experienced this change process and which difficulties both parties undergo to arrange with their new roles in the power play of new budgeting. Finally the paper covers reflections on promises of more flexibility and personal responsibility. Those promises were usually used by its protagonists to attract the reform for involved public managers. However, later they might become empty promises and public managers are confronted with feelings of betrayal. Within the interviews an image of new budgeting was presented that not fully corresponded to what theory predicts. Rather, individuals describe the work with new budgeting often as an ambiguous challenge, were they had to learn to cope with new power regimes.
    Type: presentation
    URI: https://www.alexandria.unisg.ch/handle/20.500.14171/80187
  • Publication
    Is lump-sum budgeting crowding out intrinsic motivation? Stories from the field
    ( 2007-10-27)
    Helmuth, Utz
    This paper proposes that the motivation crowding theory is a useful tool for the study of motivational effects caused by the change of management concepts. An empirical study of the introduction of ‘lump-sum budgeting' as a budgeting method in organizations applying New Public Management (NPM) highlights three aspects: First, affected public managers respond differently to the new method. Second, their responses are framed in a sensemaking process influenced by their biographical background and specific organizational context. Third, this casts doubt on deterministic behavioral assumptions that could be attributed to lump-sum budgeting and NPM. We theorize acceptance of new management concepts with the crowding theory, providing an analytical framework to better understand the diverse responses.
    Type: presentation
    URI: https://www.alexandria.unisg.ch/handle/20.500.14171/80035
  • Publication
    Better performance with performance budgeting? : Analyzing cases of success and failure in public administrations
    ( 2009-09-24)
    Helmuth, Utz
    In a qualitative case study, I examine under which circumstances performance budgeting enhances or constrains public managers' performance. This budgeting paradigm is associated with more freedom to manage and a focus on outcome orientation. It has been introduced in the context of managerialism and New Public Management in several countries around the globe. However, evaluations of those reforms have shown that results regarding performance are rather diverse. This paper deals with the questions of what accounts for the diverse results. I will propose a causal model that integrates three context factors and one individual factor. Using typological theory for cross-case analysis in combination with methods of within-case analysis this model will be tested with cases generated from interviews with Swiss public managers. The aim is to identify the underlying causal mechanisms and to develop a mid-range theory explaining and predicting the success of performance budgeting in specific contexts (typological sets). Hence, it becomes clearer why more freedom to manage does not always improve performance. This also reflects the living diversity of public sector organizations and illustrates the shortcomings of generalizing assumptions of "one size fits all" management concepts.
    Type: presentation
    URI: https://www.alexandria.unisg.ch/handle/20.500.14171/75525
  • Publication
    Better Performance with Performance Budgeting? Analyzing Cases of Success and Failure in Public Administrations
    (Taylor & Francis, 2010-12-10)
    Helmuth, Utz
    The introduction of performance budgeting has substantially changed the working environment of public managers. Changes include a shift from input to outcome orientation as well as more freedom to manage. However, current public management theories are unable to explain why performance budgeting sometimes fails. This article proposes a causal model that integrates three contextual factors and two individual factors in order to explain the diverse results. The model is tested with cases generated from interviews with Swiss public managers. The compiled data suggests that the type of tasks in a department as an antecedent variable and the perceived freedom of public managers have a dominating influence on the perceived reform outcome. Other factors, such as the behavior of the legislature, the project management and the prior career of managers, tend to be less important. These results contribute to the scientific discourse about success factors for performance budgeting in public administrations WINNER of the June Pallot Award for best IPMJ article published in 2010!
    Type: journal article
    Journal: International Public Management Journal
    Volume: 13
    Issue: 4
    DOI: 10.1080/10967494.2010.524833
    URI: https://www.alexandria.unisg.ch/handle/20.500.14171/95567
    Scopus© Citations 21