Improving the Performance Contract Initiative of President Goodluck Jonathan

Improving the Performance Contract Initiative of President Goodluck Jonathan

By Dr. Emmanuel Ojameruaye

On August 22, 2012, President Jonathan summoned his ministers to Aso Rock (the Presidential Villa) to sign performance contracts with him. The contracts were prepared by the National Planning Commission (NPC) and they apparently contained benchmark performance indicators by which each minister will be monitored, assessed and evaluated in respect of the implementation of the President’s Transformational Agenda. Throughout the month of September the heads of departments and agencies under each ministry also signed portions of the performance contract with their ministers.  The process is expected to cascade downwards. It is however not clear if the State Governments will follow suit.

Those who are upbeat about the performance contracts contend that the process will enhance public service delivery because it will keep the heads of ministries, departments and agencies (MDAs) on their toes.  In fact, at the signing ceremony, the President noted that the occasion was “momentous” and “the first of its kind in the history of our democracy”. He further stated that the contracts were aimed at “improving performance and delivering quality and timely services to the citizenry, improving productivity and instilling a greater sense of accountability for effective service delivery”, and that exercise is a “reminder of our commitment to service delivery for the common good of Nigerians”. He concluded that “I expect the process will serve as an instrument towards the realization of the objectives of Government as enumerated in the Vision 20:2020 document as well as our Administration’s Transformation Agenda... by the year 2015”. Despite the rosy picture painted by the President and supporters of the performance contract initiative (PCI), some observers are skeptical. They doubt the sincerity of the administration in improving service delivery and do not think that the goal of the initiative will be achieved. In this article, I will examine some of the reasons for concern and how the administration can ensure that the initiative is successful.

In the first place, the use of the term “contract” is a misnomer. By definition, a contract is “an agreement with the intention of creating a legal obligation…The remedy for breach of contract can be "damages" or compensation of money”.  In fact, “performance contracts” are usually used to manage physical projects rather than personnel performance. For instance, the government may sign a performance contract with a private company that has been engaged to manage a tollgate or a government-owned hotel or to provide specific services or products (e.g. petroleum products) at a fee.  Although the details of the “performance contracts” of the MDAs have not been made public, they are not likely to qualify as “contracts” because the ministers and heads of MDAs are not legally obliged to deliver all the “performance benchmarks” or targets in the contracts. Furthermore, in Nigerian parlance, the term “contract” evokes “compulsion”, “settlement” and corruption. Perhaps this is what the President had in mind when he remarked that the performance contracts were “not meant to witch-hunt anybody”.  I therefore suggest that the term contract should be replaced with “appraisal” which is the term used in personnel performance management.

Secondly, a personnel performance management system without accountability in terms of reward for good performance and penalty for poor performance is not likely to achieve the objective of improved performance or service delivery. It is not clear if the performance contracts have rewards and penalties built into them. The public does not know the metrics that will be used to appraise the performance of the MDAs. It is important that each appraisee  is assigned specific, measurable, achievable, realistic and time-bound (SMART) targets which will be assessed at the end of each  reporting period by specific scales such as “Exceeded or Surpassed”, “Met all”, “Met most”, “Did not met”, “Unable to assess”, etc. In addition, the targets should be made public.  It is also important to include rewards and penalties for good and poor performance. For instance, a minister or officer who performs very well (i.e. exceeded or surpassed his/her tasks/targets) should be given a pay raise (of say 10%) or be promoted if he/she has spent three years on the same job. On the other hand an officer who performs poorly (i.e. “did not meet” his/her targets) should have a salary reduction (of say 5%) and should not be eligible for promotion in that year. An officer who performs poorly (“Did not meet”) in two consecutive years should be fired or be redeployed to another department where he/she is most likely to perform better.

Thirdly, since the MDAs are public institutions, the performance management system must be transparent. To this end, and in the spirit of the 2007 Fiscal Responsibility Act (FRA) and the Freedom of Information Act (FOIA), the performance contracts, the targets and appraisal reports should be made public through online posting at the websites of the federal government, the national assembly, the national planning commission and the respectively ministries. Furthermore, the appraisal system must be devoid of favoritism. To this end, it is important to adopt a 360 degree appraisal system whereby each officer (appraisee) will be assessed by: a) his/her immediate superior (boss); b) at least 3 of his/her peers; c) at least 3 of his/her subordinates; and d) at least 3 of his/her customers/clients or members of the public or beneficiaries of the services he/she renders.

In addition, a “citizens’ report card system” should be adopted to provide citizens an opportunity to assess or rate the services provided by various MDAs. In a democracy, citizens must have a way to express their “voice” on public service delivery in order to promote transparency and accountability. The Citizens Report Card system (CRC) is a tested “best practice” approach of achieving this objective. It was initiated by a small group of citizens in Bengalore (India) in 1993 and has since been replicated in many regions of India and throughout the world. An independent assessment of the impact of the CRCs in India for the World Bank noted that “the progression in the influence of the report card can be seen to move from limited impact (with dissemination of feedback) to more impact (with dialogue and public pressure for change) to greater (with advice on reform) corresponding to the reactive, proactive and reformist roles over a period of time.” In 2011, the European Union sponsored the Niger Delta Professionals for Development (NIPRODEV) to conduct the “Niger Delta Citizen Report Card on public services, good governance and development from 120 Niger Delta communities” – one of the first CRC report ever produced in Nigeria. The Federal Government should engage reputable opinion survey companies and/or NGOs to conduct CRC surveys periodically and use the results as part of the MDAs performance appraisal system.

Fourthly, the periodicity of the appraisal of the ministers and officers is not clear. Will it be done quarterly, semi-annually or annually?  At what months of the year will the results of the appraisal be made public?  The timing of the launching of the exercise –August and September – is an indication that no serious thought may have been given to the periodicity of the appraisals. Ideally, the “benchmarks”/targets in the “contracts” should be tied to the annual budget/plans of the various MDAs so that the appraisal system can be an instrument of ensuring effective plan/budget implementation. For instance, if the Ministry of Works is allocated N300 billion in the 2013 budget for the construction of 2,000 km of new roads and rehabilitation of 3,000 of existing roads, then these targets must be included the minister’s performance contract for 2013. If the performance contracts are tied to the budget, the appropriate time to sign the contracts or the effective start date of each contract should be the beginning of the financial year, i.e., January 1st. The “contracts” should be annual with quarterly targets.

Fifthly,  the targets in the contracts should be in both physical and financial terms such as “ spend 20% of your budget by end of first quarter, 45% by end of second quarter, 75% by end of third quarter and 100% by end of fourth quarter”; “complete 100 km of PHC-Warri road by end of second quarter”, “complete rehabilitation of  100 km of Abuja–Lokoja Road by end of fourth quarter”, “increase power generating capacity to 6,000 MW by the end of the year, increase reliability of power  from 0.6 to 0.7 national wide by end of third quarter”.

Sixthly, the performance contract initiative should build on the “service delivery programme” (SDP) initiated by President Obasanjo in 2004. It will be recalled SDP was launched at the end the Presidential Retreat in March 2004 when the Federal Executive Council entered into a “Service Compact with all Nigerians (ERVICOM]”. In the compact, the ministers and heads of departments and agencies affirmed as follows: “We dedicate ourselves to providing the basic services to which citizens are entitled, timely, fairly, honestly, effectively and transparently”. Under the SERVICOM, it was also agreed that all MDAs will prepare and publish their SERVICOM Charters whose provisions will include: “a) quality services designed around the requirements of their customers and served by staff sensitive to the needs of their clients, b) set out the entitlements of the citizens clearly and in ways they can readily understand, list of fees payable (if any) and prohibit the demand for any additional payments; c) commitment to the provision of services (including the processing of applications and the answering of correspondence) within realistic set time-frames; d) details of agencies and officials to whom complaints about service failures may be addressed; e) publish these details in conspicuous places accessible to the public; and f) periodically conduct and publish surveys to determine levels of customer satisfaction

Under the SERVICOM, all government departments were expected to display their SERVICOM charters by July 24, 2004.  A SERVICOM Office was also established within the Presidency and empowered to: “a) Coordinate the formulation and operation of SERVICOM charters; b) Monitor and report to the President on the progress made by Ministries and Agencies in performing their obligations under SERVICOM; c) Carry out independent surveys of the services provided to citizens by the Ministries and Government Departments, their adequacy, their timeliness and customer satisfaction; and d) Conduct SERVICOM Compliance Evaluation of services provided by Government Departments”. The Office still exists but it is not clear if it still effective and if it played any significant role in the performance contract initiative spearheaded by the National Planning Commission. There is no point re-inventing the wheel. At the signing ceremony, the President did not refer to SDP. It is important to link the PCI to the SDP.

Finally, it is important to establish an independent body to tract the performance of the MDAs and report to both the President and National Assembly. The National Planning Commission and the SERVICOM Office as currently constituted are not autonomous or sufficiently empowered to monitor the performance of all MDA and ensure remedial actions. A body similar to the General Accountability Office (GAO) in the United States should be set up to play this role. The GAO is “an independent, nonpartisan agency that works for United States Congress. Often called the congressional watchdog, the GAO investigates how the federal government spends taxpayer dollars. The head of GAO, the Comptroller General of the United States, is appointed to a 15-year term by the President from a slate of candidates Congress proposes” The GAO support congressional oversight by “a) auditing agency operations to determine whether federal funds are being spent efficiently and effectively; b) investigating allegations of illegal and improper activities; c) reporting on how well government programs and policies are meeting their objectives; d) performing policy analyses and outlining options for congressional consideration; and e) issuing legal decisions and opinions, such as bid protest rulings and reports on agency rules. In order to improve the performance of MDAs in Nigeria, it is high time to establish a body similar to the GAO.

Dr. Emmanuel Ojameruaye writes from Phoenix, Arizona State, USA.

Sunday, November 11, 2012.

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