Can Employee Training Influence Local Fiscal Outcomes?

• Author: Ed Gerrish,Thomas Luke Spreen,Whitney Afonso
• Published date: 01 May 2020
• Date: 01 May 2020
• DOI: 10.1177/0275074020911717
• Subject Matter: Articles

https://doi.org/10.1177/0275074020911717

American Review of Public Administration

2020, Vol. 50(4-5) 401 –414

© The Author(s) 2020

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DOI: 10.1177/0275074020911717

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Article

Introduction

Public organizations, including local governments, have

long sought to benchmark performance. As early as 1937,

Herbert Simon advocated for municipal benchmarking as a

means of improving governmental efficiency. Practitioners

typically benchmark performance by monitoring key ratios

over time and comparing organizations to their peers or

neighbors. Ideally, this happens incrementally by evaluating

the success of managerial practices or policies based on

changes in those indicators, connecting performance infor-

mation to decision venues (Moynihan, 2008).

There is considerable interest among academic research-

ers in measurement of performance and benchmarking, and

whether those activities affect the behavior of organizations

and governments. Several studies examine how benchmark-

ing efforts impact the performance of public organizations

in various contexts such as education (Dee & Jacob, 2011;

Dee & Wyckoff, 2015), health care (Bevan & Hood, 2006;

Thibodeau et al., 2007), local government (Ammons &

Rivenbark, 2008), or social services (Gerrish, 2017). A meta-

analytic summary by Gerrish (2016) finds that while perfor-

mance management systems have a small overall correlation

with organizational performance, systems featuring elements

of benchmarking are correlated with larger gains in organiza-

tional performance compared with those without it.1

While numerous studies aim to determine whether bench-

marking systems can yield improvements in organizational

performance, relatively few unpack the mechanisms behind

them. One plausible pathway toward the take-up and applica-

tion of information from benchmarking systems is employee

training. Recent work by Kroll and Moynihan (2015) shows

that public sector training facilitates the use of performance

data and setting strategic goals in the decision-making pro-

cess. They argue that training may affect employee behavior

by creating a normative imperative that “presents a reform as

an appropriate norm to follow” because “all of our peers are

911717ARPXXX10.1177/0275074020911717The American Review of Public AdministrationSpreen et al.

research-article2020

1University of Maryland, College Park, USA

2University of North Carolina at Chapel Hill, USA

3University of South Dakota, Vermillion, USA

Corresponding Author:

Thomas Luke Spreen, Assistant Professor, School of Public Policy,

University of Maryland, 4139B Van Munching Hall, College Park,

MD 20742, USA.

Email: tlspreen@umd.edu

Can Employee Training Influence

Local Fiscal Outcomes?

Thomas Luke Spreen1, Whitney Afonso2,

and Ed Gerrish3

Abstract

Employee training is often viewed as essential for incorporating performance management practices into public organizations,

but few studies directly link training programs to subsequent changes in organizational outcomes. Typically, evaluations

of the impact of training and management innovations more broadly focuses narrowly on improvements at the mean of

the distribution, ignoring isomorphic pressures that may spur divergent responses at opposite tails of the distribution.

We examine these notions by testing whether training local government personnel on the use of financial performance

information in decision-making influences fiscal outcomes. Specifically, we compare the outcomes of North Carolina local

governments whose employees participated in training on a new fiscal benchmarking tool at the University of North Carolina

School of Government to peer governments that did not participate. Municipal governments with at least one trained

employee experienced modest changes, on average, across most of the financial ratios reported in the benchmarking tool. By

comparison, the dispersion of the reported outcomes declined considerably among municipal governments whose employees

participated in training in comparison to control governments. The strength of this response increased with the number

of public officials trained. The results indicate that employee training can facilitate the use of performance benchmarking

systems in public sector decision-making. They also suggest that benchmarking without explicit performance targets may

encourage convergence toward the average outcome.

Keywords

fiscal benchmarking, local government, employee training, performance management