Need to Incentivise the Government Sector


Prajapati Trivedi, Secretary to Government of India (Performance Management) in the Cabinet Secretariat, tells Inclusion how the government is seeking to establish a mechanism for results-based performance monitoring and performance evaluation in the Government. According to him, service delivery and results have become the bottom-line for government officials just like profits make up the bottom-line of the private sector. Excerpts

What is the aim and purpose behind the functioning of the Performance Management Division in the Cabinet Secretariat? Traditionally, governance structures in India are characterised by rule-based approaches. But, through the Performance Management Division (PMD), the Government has for the first time sought to introduce a system that evaluates the performance of various departments and ministries in a transparent and objective manner based on measurable and verifiable results and outcomes. Pursuant to Prime Minister’s orders in September 2009 to create a “Performance Monitoring and Evaluation System (PMES)” PMD was given following key tasks by the Cabinet Secretary: One, we were asked to design and implement a state-of-the-art performance monitoring and evaluation system in the government after a comprehensive review of international best practices. Two, create user-friendly guidelines and checklists for implementing the performance evaluation system in government departments. Three, conduct briefing sessions and training programs for officers at various levels in the Government to ensure proper shared understanding of the new evaluation system. Four, produce newsletters, training videos, booklets and other informational material to keep stakeholders informed of the latest developments and future plans. Five, create a knowledge sharing unit in PMD to disseminate good practices and advise state governments on the adoption of similar system at the state level and finally, organise international conferences and workshops to learn from other successful efforts in this area around the world. So, on what basis is the performance of different ministries and departments being evaluated? As you know, the Results-Framework Document (RFD) is the main instrument for implementing ‘performance monitoring and evaluation system (PMES).’ It is essentially an understanding between the Minister and the concerned secretary of the department regarding the key objectives for the year, action required to achieve these objectives, inter-se priorities, success indicators to measure progress in implementing actions, and targets for the year. The most innovative feature of the evaluation methodology is that it allows us to re-create the missing bottom line for the government. The methodology enables us to calculate a composite index of performance based on financial, physical, qualitative, quantitative, static and dynamic aspects of government performance. To do so we have had to fix two fatal flaws in our existing systems of performance evaluation in the Government. First, we asked departments to prioritise their actions. In the past if the department achieved (say) targets for 13 out of 16 actions that may be considered good. But, what if the three missed targets were really the important ones from the department’s point of view? That is why under RFD departments have to attach weights to proposed actions adding up to 100 %. Second, we in the Government use single point targets. For example, we would fix a target for building (say) 7,000 KMs of road. What If the department builds only 6,700 KMs of roads? If we do not agree ex-ante to the way we will judge deviations from targets, we end up leaving it up to individuals to make judgments. This discretion is the source of most of our problems. Thus, in the RFDs, at the beginning of each year, we ask departments to tell us what level of their performance should be “excellent” and what ought to be considered “poor” performance. Once we have all this information, evaluation at the end of the year and calculation of the composite performance index becomes a rather straightforward job. Another major innovation in RFD is the role of a third party in vetting RFDs at the beginning of the year and also for evaluation against targets at the end of the year. This group of 70 persons called the Ad-hoc Task Force (ATF) consists of distinguished academicians from IIMs, ASCI, FMS, IIPA, and other fine institutions, independent domain experts, private sector experts and former secretaries to Government of India. This high calibre group is the solid bedrock on which the RFD system stands. How has the system worked? As mentioned earlier, we got the green light from the Prime Minister to implement RFDs in September 2009. Hence, for the year 2009-2010, the RFDs covered only the period from January 1st to 31st March 2010. We covered 59 departments in this Phase I of implementation. We excluded other departments only because we did not have the capacity to deal with so many departments all at once. The results from these 59 RFDs were evaluated in may 2010 and, for the first time in the history of independent India, Cabinet to Government of India wrote a personalised letter to each of the 59 Secretaries informing them about their individual performance vis-à-vis their departmental commitments in RFDs from 2009-2010. In phase II, for the year 2010-2011, we covered 62 departments and 760 responsibility centres (subordinate offices, attached offices, and autonomous organisations) under them. For the Phase III, RFDs for 2011-2012 will cover some 78 departments (and their responsibility centres) including the Planning Commission, Ministry of Finance, Ministry of External Affairs, Ministry of Defence and even Cabinet Secretariat and departments under PMO. No other country in the democratic world has moved so fast in implementing a rigorous performance accountability regime in the Government. I believe that we were able to move so swiftly because of the groundwork done by the Second Administrative Reform Commission which is the main source of inspiration for our work on RFDs. Also, we have been gradually building up to this level. We are standing on the shoulders of giants like the MOU policy and outcome budgets.  But, that was almost a year earlier. What has been achieved since then? You are right, when we started the implementation of RFDs in January 2010, three fourth’s of the year was already over. First RFDs covered a period from 1st January – 31st March 2010, and were in the nature of a pilot. Since then, we have made huge progress in implementing RFDs in both quantitative as well as qualitative terms. The 2010-2011 RFDs required all departments to prepare five year strategic plans that were consistent with the 12 challenges identified by the Planning Commission for the 12th Plan. Thus, the RFDs for 2011-2012 will be much more aligned to not only their own strategic plan but also the 12th Plan vision. In addition, all 62 departments covered in the second phase have prepared Citizen’s / Client’s Charters and Grievance Redress Mechanism. Unlike in the past, Government intends to hold departments accountable for commitments made in these charters.  For the RFDs for the next year (2011-2012), the High Power Committee on Government Performance chaired by the Cabinet Secretary has asked all 62 departments to include following mandatory performance requirements in their respective RFDs: (a) Identify potential areas of corruption related to departmental activities and develop an action plan to mitigate them; (b) Identify and Implement 3 major recommendations of ARC II relevant to the department; (c) Develop an action plan for e-office (paperless office) implementation in the department / ministry; and, (d) Develop an action plan to implement ISO 9001 certification. When implemented, we believe these will transform the way we do business in Government. But, this has not been an easy journey: we have had to train and educate officials in different departments on how to formulate RFD, strategy, with the focus being on the end stakeholder consultation. We have trained some 2500 officials in the past 24 months.  You can also look at our achievements in yet another way. Today, for the first time, planning and implementation have been linked inextricably. Thus, we (Performance Management Division, Cabinet Secretariat) have been asked by the Planning Commission to join all their Annual Plan meetings and plan discussions to ensure that departments are held accountable for the promises made during Plan discussions. I am impressed how seriously most Secretaries are taking this exercise. They are using this instrument internally to monitor the performance of their department. This also raises the issue of cross linkages between different departments and ministries. Even today, each department of ministry appears to be working in isolation? While it true that such cross linkages had been missing in the past, I think this issue is being seriously tackled now. We are doing several things. First, we are looking at the departmental strategies and RFDs to identify those areas that require joint action by several departments. For example, several issues relating to women and child require action from many departments. One proposal is to work out joint targets for these clusters and have a team score in addition to the individual score on RFDs. In this we are working closely with the Planning Commission to have a common approach that is effective. Today, governance reforms and institutional regeneration are two very major areas on our agenda. More importantly, one cannot look at such reforms from a short-term point of view; such changes take place over a period of time, but when initiated they last a long-long time. This is because such change trickles down, enabling every level to be managed by certain objectives that are linked to results. We are seeking to change the DNA of the Government and that does not happen overnight. The only comparable experience in this area relates to the MOU policy for the PSUs. It took about 7-8 years for it to stabilise after it was adopted by the Government. But, what is the timeframe for such change to trickle down? Today, you are not even covering all central government agencies. When will such change percolate to the states? It has been only a little more than a year since we got effective powers and the changes are there for everyone to see. The 62 central departments that we covered in the first year are showing the results. There is a distinct change in the internal culture of the departments. There is a concern for meeting departmental targets and commitments. At least we pause and think about the larger purpose for the department’s existence and what is meant by performance in a particular context. States like Maharashtra and Punjab have already adopted this system and we have requests from at least ten other states for support in implementing RFD policy in their states.  It must be remembered here that the core has to be strong. Only then you can set an example for the states. If we don’t do it right, we can’t preach what we don’t practice. It is going to take time, but I am convinced that ultimately all states will adopt such practices because history and experience suggests that wherever there has been autonomy without accountability, it has not worked. This is the framework for accountability. Accountability always trickles down. That is why one needs to start reforms at the very top to bring about change. That is why Prime Minister’s system for monitoring and evaluation of departmental performance starts at the very top. And as you asked earlier, such accountability is being cross-linked. Thus, for the 12th Five-Year Plan also, all challenges will need to converge with RFDs. Thus we will not only have horizontal alignment but also vertical alignment. Mind you, such documents are not just an agenda, but they are linked to accountability and implementation. Accountability, by its very nature, has to start at the top. You have to be the change you want to bring about. But then how will you define government performance? What about motivation to deliver? The definition of performance in RFD is clear — it is the ability of the departments to deliver on their commitments. Thus, a score of 100% implies that the department has achieved all its targets. I agree that it is important to have performance-related incentives. You will be happy to know Government has recently decided to implement the recommendations of the 6th Pay Commission and introduce Performance Related Incentives in Government departments. To be eligible to receive monetary incentives, the departmental performance will have to be above 70 % against their RFD targets and they will be paid out of cost savings made during the year. Government has laid some other preconditions for eligibility also—e.g. the department would need to have been in the RFD system for at least two year, implement a biometric access control system, and have an outcome oriented RFD. Mind you, this is not something that is new: the 4th Pay Commission said it, the government accepted it, the 5th Pay Commission said it, the government accepted it, but did nothing about it while increasing the salaries of the government staff; the 6th Pay Commission recommended it, but again the government took no action till recently. The main stumbling block I think was that while nobody was opposed to such incentives, they were not sure how to define departmental performance and link it to a framework of incentives. Now with the RFDs in place, we have defined the departmental bottom-line. Today, the focus is primarily on fund utilisation. With large sums of money earmarked for implementation of various plans, it is essential that we have in place a system that measures delivery and outcomes. What are the key challenges that Department of Performance is facing? The key challenge is really to take it down all the way to the grassroots. The work culture has to change all the way. The top has started; it should now go down all the way to the states, to the level of the district magistrate and to the Panchayats. More importantly, the people have to become aware of what the government is doing. Today, development is also about communicating.  We have to have greater outcome orientation in RFDs. In the first round two thirds of the targets were process oriented and only one third were outcome oriented. To some extent this is understandable. Today’s tourism numbers, for example, reflect past performance. Today’s departmental performance will show up in future. Thus, improving processes and implementing tourism projects today will bear fruits in the future. This long-term nature of outcomes in Government often forces RFDs to focus on short-term targets. We must remember that change of this magnitude cannot happen overnight. We have made a very good beginning by international standards and we will all have to work together to make a good thing even better.

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