This paper employs an embedded case analysis of agency performance management initiatives in the State of California to explore how managers design to overcome conditions of severe fiscal and political constraint.  The performance management literature has identified an array of performance management tools, linked measures to management goals, and discussed the importance of systemic level support in the form of leadership support, managerial capacity, agency level discretion, and a culture of performance (Moynihan and Ingraham 2003, Moynihan & Pandey 2010). The full array of institutional capacity requisites is rarely in place, begging the question:  How should managers strategically design performance management initiatives that are attuned to the specific capacity constraints of their organizations?

We explore this challenge through the lens of performance management in California, widely recognized to be suffering a crisis of governance capacity.  Moynihan and Ingraham (2003) ranked California in the lowest quintile nationally in a performance management scorecard, and analytic capacity has hollowed further during a decade of structural budget crises.  California has staggered through an array of largely unsuccessful executive efforts toward performance management, including a notoriously ill-fated pilot in performance budgeting under the Pete Wilson administration. Many state analysts view with skepticism a recent executive order by Governor Jerry Brown requiring his Department of Finance to infuse the budget process with “zero-based budgeting, performance measures, strategic planning, audits, cost-benefit analyses, and program reviews” (Executive Order B-13-11, Dec. 8, 2011).  
Yet even as accountability initiatives flounder at the executive level, a cadre of departmental administrators is instituting performance management at the agency level. Since 2008 the California Performance Management Council, a self-chartered council of agency administrators, has worked to document and promote performance management in the State of California.  The group, under the leadership of California’s Little Hoover Commission, has met regularly to share model practices; surveyed the experiences of agencies with performance management; and produced case studies and a 2010 white paper on performance management initiatives in California.

In partnership with the CMF, the Little Hoover Commission, and the California Research Bureau we are studying how agency managers have advanced performance management initiatives in an under-resourced, politically polarized, and analytically hollowed-out state government. We will conduct semi-structured interviews of agency managers to complement case studies and survey data in place.  The analytic approach will be a comparison of agencies using multi-attribute analysis to associate agency capacity characteristics and managerial goals with specific PM tools.  The goal is to illuminate the strategies employed by managers to overcome management capacity constraints within their agencies.

Moynihan, D. P. and P. W. Ingraham (2003). "Look for the Silver Lining: When Performance-Based Accountability Systems Work." JPART 13(4): 469-490.