Does Managerial Use of Performance Information Matter to Organizational Outcomes?

• Author: Xu Han,Donald Moynihan
• Published date: 01 February 2022
• Date: 01 February 2022
• DOI: http://doi.org/10.1177/02750740211048891
• Subject Matter: Articles

Does Managerial Use of Performance

Information Matter to Organizational

Outcomes?

Xu Han

1

and Donald Moynihan

2

Abstract

Public management scholars have made impressive strides in explaining managerial usage of performance information (PI).

Does such PI use matter to performance? If so, what types of use make a difference? To answer these questions, we connect

managerial self-reported behavior with objective organizational outcomes in Texas schools. We control for lagged compara-

tive school performance and employ inverse probability weighting to mitigate endogeneity concerns. The results show that

managerial use of PI is associated with objective indicators of performance, and that the type of use matters. In particu lar,

school principals’use of PI for strategic planning is positively associated with better high-stakes test scores. The findings sug-

gest that maturity of performance management system can shape the relationship between managerial PI use and organiza-

tional performance, thereby contributing to a contingency-based understanding of the relationship between performance

management and organizational performance.

Keywords

performance information use, performance management, inverse probability weighting

To better understand the effects of ubiquitous public sector

performance systems, Moynihan and Pandey (2010) pro-

posed treating performance information (PI) use as a “big

question”for researchers to address. Over the past decade,

researchers have amassed an impressive body of evidence

(James et al., 2020). The next logical question is whether per-

formance information use makes a difference to organiza-

tional performance.

There are plausible reasons to assume that the managerial

use of performance information improves outcomes. It con-

tributes to setting clear, challenging but feasible goals that

guide and inform decision-making (Behn, 2014; Favero et

al., 2016; Pasha, 2018). PI, especially comparative informa-

tion, can induce public employees, politicians, and citizens

to identify shortcomings, take corrective actions, maintain

strengths, and exert more effort to improve organizational

performance (Andersen & Nielsen, 2019; Holm, 2018;

Rockoff et al., 2012). Connecting PI with personnel manage-

ment and resource allocation can motivate bureaucrats to

improve performance (Dee & Wyckoff, 2015; Spreen et al.,

2020).

However, PI use may not improve organizational perfor-

mance for a number of reasons, such as goal ambiguity

(Chun & Rainey, 2005; Moynihan, 2008), political

constraints on managerial autonomy (O’Toole & Meier,

2011), difficulty in inferring what the data actually suggests

about concrete actions (Moynihan, 2008), and cognitive

biases (James et al., 2020). Hence, using PI has been found

to be associated with null average effects at public organiza-

tions (Gerrish & Spreen, 2017; Hvidman & Andersen, 2014).

A meta-analysis offers mixed findings. There is only a weak

positive correlation of performance management with organi-

zational performance. However, certain performance man-

agement techniques generate larger positive effects, such as

the use of PI for benchmarking (Gerrish, 2016).

It, therefore, remains unclear as to whether managerial use

of performance data improves performance, and under what

conditions. To address these questions, we first explain

some basic rationales for why PI use might lead to perfor-

mance. We hypothesize that the aggregated use of PI, using

PI for strategic planning and daily management improves

1

University of Maryland at College Park, College Park, USA

2

Georgetown University, Washington, USA

Corresponding Author:

Xu Han, University of Maryland at College Park, 3413 Tulane Drive, Apt14,

College Park, Maryland 20742-5031, USA.

Email: erichan@umd.edu

Article

American Review of Public Administration

2022, Vol. 52(2) 109–121

© The Author(s) 2021

Article reuse guidelines:

sagepub.com/journals-permissions

DOI: 10.1177/02750740211048891

journals.sagepub.com/home/arp