Toby Lowe, visiting fellow at Newcastle University business school has provided the following details:
Kittens are evil - Heresies in public life
The government’s fondness for payment by results is having a massive impact across the public sector.
Outcomes-based performance management impacts on staff
Whether it’s the contracting out of debt collection or the Work Programme, performance by results is underpinning the government’s outsourcing agenda. Justice secretary Chris Grayling has been keen to champion it, despite its obvious failings under his previous post at the Department for Work and Pensions.
There has been a change of mindset in which questioning outcomes is like saying kittens are evil. Payment by results massively oversimplifies complex needs and relationships.
Results-based accountability aims to make managers accountable for the results of their teams and organisations and morphs in to payment by results. A classic example of this is the Work Programme which rewards companies whose clients, having found work, remain employed for six months. The fundamental issue with that is that any person or team can’t possibly be responsible for a jobseeker getting a job for six months – that’s beyond their control.
Helping the easiest to help
Management based on outcomes makes good people do the wrong thing – and those most in need get a much poorer service.
Payment by results is a simple idea: people and organisations should only get paid for what they deliver. If your job is to get people back to work, then find them a job.
Plenty of people working public services are starting to realise this is nonsense.
The evidence is very clear: if you pay or otherwise manage performance based on a set of pre-defined results, it creates poorer services for those most in need. This practice always results in gaming:
- Creaming/cherry-picking – helping the easiest clients to help
- Targeting resources to produce data – teaching to the test
- Reclassifying results – pretending
- Making things up.
Payment by results does not reward organisations for supporting people to achieve what they need; it rewards organisations for producing data about targets – it pays people for lies.
There have been numerous studies that show such systems distort organisational priorities and make organisations focus on doing the wrong things.
When payment by results practices are introduced, workers who used to ask their clients
“How can I help you to achieve what you need?”
instead think “How can you help me to produce the data I need?”
There’s a growing momentum behind the understanding that outcomes-based performance management in general – and payment by results, in particular– is dangerous idiocy. It makes good people do the wrong things, and then forces them to lie about it.
What’s the alternative?
By allowing people to think people can make decisions for the best course of action for the customer and the business or organisation. A bottom-up approach is key, where you start from people’s actual needs. You also need to deal with the complexity of situations and allow workers on the frontline to use their judgement, this helps to develop trust and transparency and measures change in terms of social context and identity.
