Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 1.2.7 Organization and Process

Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03

1.2.7 Organization and Process Performance Management

Day 6: Performance Management

and Roles of Actors

7th February 2011

Tapio Laamanen


Actors in Line Ministry (MEE) in Performance Management

(Ministry of Finance; general responsibility on development)Administrative branch of MEE (Ministry of Employment and the

Economy)Ministry vs. AgencyMinistry represented by Ministers, Permanent Secretary,

Corporate steering unit, Departments, Finance UnitMinistry’s executive groupBoards of Agencies

Ministry itselfPermanent secretary vs. each department/unit

IndividualsManager vs. employee


MP

Regional Development

Strategy and Foresight

• EntrepreneurshipDevelopmentand EnterpriseSupport

• Functioning ofLabour Market

and Labour Availability

• Employment andEnterpriseServices

• IntermediateLabour Marketand Employability

EMPLOYMENT AND ENTRE-

PRENEURSHIP DEPARTMENT

Corporate Steering

LABOURAND TRADE

DEPARTMENT

INNOVATIONDEPARTMENT

ENERGYDEPARTMENT

DEVELOPMENT UNIT

NATIONALCONCILIATOR’S

OFFICE

CO-ORDINATION OFEU AND INTERNA-TIONAL AFFAIRS

HUMAN RESOURCESAND COMPETENCE

DEVELOPMENT

AUDITING

ADMINISTRATION

FINANCE

AS

MP

MP

MP

MP

AS

PERMANENT SECRETARY

STATE SECRETARY

MINISTEROF ECONOMIC AFFAIRS

MINISTER OF LABOURSTATE SECRETARY

MEDIA ANDCOMMUNICATIONS

MP

• Regional Strategy• National Development

Programmes• Structural Fund Policy• Structural Fund Administration

MP

• Corporate Strategy

• Strategic Projects

• Research and Foresight

AS

• Steering and Structures• Steering of ELY Centres • Information Management Steering and Administration• Industrial Policy Co-ordination

and Special Finance

MP

AS AS MP

MP = Minister of Economic Affairs, Mauri PekkarinenAS = Minister of Labour, Anni Sinnemäki

• Base Production ofEnergy

• EnergyMarkets

• EnergyEfficiency andTechnology

• RenewableEnergy

• Knowledge-BasedInnovations

• Demand-BasedInnovations

• InnovationEnvironments

• Growth Ventures

• International-isation of Enterprisesand Export

• Mineral Policy

• Regulation ofWorkingEnvironment

• Quality ofWorking Life

• CompetitionPolicy

• Internal Marketand ConsumerPolicy

• Business Law

• Better Regulation

MP

The Ministry of Employment and the Economy – Organisation

MP


Energy MarketAuthority

Energy MarketAuthority

Finnvera plcFinnvera plc

FinproFinpro

Invest in FinlandInvest in Finland

Finnish CompetitionAuthority

Finnish CompetitionAuthority

ConsumerAgency

ConsumerAgency

Tekes Funding Agencyfor Technology and Innovation

Tekes Funding Agencyfor Technology and Innovation

Finnish IndustryInvestment Ltd

Finnish IndustryInvestment Ltd

Safety Technology

Authority

Safety Technology

Authority

LocalEmployment

Offices(70)

VTT Technical

Research Centre of Finland

VTT Technical

Research Centre of Finland

State Nuclear Waste Management

Fund

Offices abroad more than 60(Finpro, Tekes,

Innovation Centres FinChi and FinNode)

Geological Surveyof Finland

Geological Surveyof Finland

Centre for Metrology and Accreditation

Centre for Metrology and Accreditation

The MEE Branch

Finnish Tourist Board

Finnish Tourist Board

National EmergencySupply Agency

National EmergencySupply Agency

RegionalELY Centres

(15)

NationalConsumer Research

Centre

NationalConsumer Research

Centre

Others

National Board of Patents and

Registration

National Board of Patents and

Registration

Domestic Offices appr. 300

EnterpriseServices

(50)

EnterpriseServices

(50)


5

MEE “Corporate Steering” Model- Concerning the MEE and its subordinated agencies

5

INTERNATIONAL OPERATING ENVIRONMENT

NATIONAL OPERATING ENVIRONMENT

CORPORATE STEERING IN ADMINISTRATIVE SECTOR

Customers

Partners and networks

Operator groups of the admin.

sector

1 2

3 4

Performance management

Regulatory management

Information management

Steering of development operations

Work in Boards of Directors

Corporate strategy of the administrative sector

Substance strategies

Government Programme

Analysis of the operating

environment

Strategic intent and definition of target

policies

Corporate operating model

Strategic planning Steering methods Implementation of strategy

Monitoring, reporting and assessment of strategy


6

Operator Groups in the Administrative Branch

7

Operator group 1• ELY Centres (regional, 15)• Tekes• Finnvera plc• Finpro• Finnish Industry Investment Ltd• Technical Research Centre of Finland,

VTT• Geological Survey of Finland (GSF)

Operator group 2• Foundation for Finnish Inventions• Finnish Standards Association SFS• The Finnish Tourist Board (MEK)• Invest in Finland foundation• Fintra• SME Foundation• The Labour Institution• Design Forum Finland• Plus a number of other organisations eligible for State aid

CHARACTER OF

OPERATIONS

Development and business

Official duties

EXTENT OF OPERATIONS

Extensive field of duties / operations

Specialised field of duties / operations

Operator group 3• National Board of Patents and Registration

(PRH)• Centre for Metrology and Accreditation

(MIKES)• Safety Technology Authority (TUKES)• National Consumer Research Centre

Operator group 4• Finnish Competition Authority• The National Consumer Agency• Energy Market Authority• National Emergency Supply Agency


Actors from Top to Down – Executive Group of Ministry

Executive group handles and decides onA corporate strategy (especially 4-6 target policies) Substance strategiesPreliminary policy targets in budget proposalPublic statements of the ministry concerning how the

targets have been attained in agencies

…to be exact, the executive group does not make decisions, but minister does himself/herself if authority is not delegated to high management civil servants.


Actors from Top to Down – Minister

Political guidelines to performance management; process and targets

Minister mostly uses his/her power in the executive groupOne aim in developing performance management has been to

serve better the political actors, to give them a better tool usePerformance management process may be too slow and its

targets too far when observed from daily politics point of viewMinister may give direct assignments to an agency

Assignments may conflict the targets of the agreement At least the agency can have problems in prioritizing its resources

both to meet the targets of the agreement and to satisfy minister’s current needs


Actors from Top to Down – Permanent Secretary

General responsibility for the functioning and development of an administrative branch

Coordinates the opinions of the matrix organization (ministry)Important supporter of the corporate steering unitChairman in agreement negotiations with the most significant

agencies (operator group 1), if not delegated to undersecretaryCorporate management group as a new body in performance

managementPermanent secretary as a chairmanParticipants: Heads of departments of the ministry and heads of

agencies of the operator group 1


Actors from Top to Down – Undersecretary-of-state

Head of the corporate steering unitGeneral responsibility for the implementation of the

performance management targets of the branch Chairman in agreement negotiations with the most significant

agencies (operator group 1) if permanent secretary delegates the duty

Strong influence on the preparations concerning performance targets Especially target policies of the corporate strategy

Vice-chairman of the corporate management groupPersonnel of the unit develop the performance management

process in collaboration with the departments New actor in ministry


Actors from Top to Down – Director general

Heads of departments of ministryRepresents substance / policy sector

Resources / appropriationsLegislation

Chairman in agreement negotiations with the agencies which belong to the operator groups 2, 3 and 4Strong actor also in negotiations of an agency belonging to the

operator group 1Performance management officers belong to the departments

as well as heads of divisions of departmentsTraditionally strong position


Performance Management OfficerFormal and practical role Performance management officer is responsible

for ministry preparations concerning relevant agency

Continuous interaction between ministry and agency on expert level

Requirements of a performance management officer CompetenceExpertiseMandate


Performance Management OfficerDuties

Process owner concerning performance management between ministry and agency

Performance agreement draftingBriefing one’s manager and a chairman of the negotiationsReporting to managerParticipating in the agency’s important projects Informal interaction

Role Coordinator and applier of strategies and targets ”Steering touch” strong enough, instead of representing agency’s

voice in ministryPrioritizing aspect Development approach


Enhancing the Profession of Performance Management Officer

Common terminologyCommon toolsCommon rules / ways of actionHorizontal aspectNetwork supportTraining programme


Actors from Top to Down – Finance Unit

General responsibility for resources / appropriations of the administrative branchSpending limits give a strong role to finance unitProductivity programme caused both reductions and

investment possibilitiesOwner of budget process

Preliminary targets in budget proposalRepresents economically appropriate way of action


Many Actors – One Voice?

Aim: Ministry has only one voice in performance management crucial moment: negotiations Chairman represents not only his/her own department/unit but

also the whole ministryParticipating actors of ministry express their views to chairman in

beforehand

How has the aim realized? Not well!

Too many actors, too many roles, too separate processes

Keep it simple, save the matrix (horizontal way of action)

Need to combine actors as well as processes

Strategy unit + corporate steering unit + finance unit?


Actors from Agency

Head of an agencyUsually director generalContinuous interaction between permanent secretary /

undersecretary / director general of ministry’s department / performance management officer and head of agencyPractices vary

Coordinative person close to the head of the agency Counterpart to performance management officer Continuous interactionPerformance agreement draftingDevelopment of process Low access stay in contact between ministry and agency

Documents

Decision Making and Performance Management in Public Finance Kamu Maliyesinde Karar Alma ve Performans Yönetimi TR08IBFI03 1.2.7 Organization and Process