HOW TO MEASURE THE AUTONOMY OF MANAGERIAL LEVELS IN THE PUBLIC ADMINISTRATION Effects estimation of the recent Italian public

administration reform: a case study

Abstract This paper deals with the issue of the relationship between politics and public administrations adopting new public management criteria, or rather between political and managerial level , in order to identify the real capacity of public managers to carry out independent choices regarding operations felt as the more appropriate to reach strategic goals designed by political authority. Therefore, when the political level ask to the managerial level to have responsibility of in policy implementation and its results, what are the drivers that allow to a public manager to reach assigned goals in a certain political context? How politics permit public managers at ones own discretion in operate? By definition and measurement of the concept of managerial autonomy (as capacity to organize activities in an independent way) in public contexts, the paper give some answers at these questions and it estimates the effects of National Laws designing role and responsibility of public manager in Italy, assumed as a case study.

Based on a qualitative and quantitative analysis of the effects produced by reforms of public management, the research verifies the correspondence between the finality of the Law (autonomy of public manager) and the real result as consequence of its design and implementation. For this purpose Organization analysis and Legal analysis are integrated with System Dynamics methodology,

understanding complexity that requires a multidisciplinary approach.

Keywords

New public management, managerial autonomy, public policy; policy

design; system dynamics

Introduction In the last twenty years the public administration has undergone remarkable changes in many countries linked to the altered socioeconomic context of modern post-industrial societies. Innovations are geared towards the introduction into the public sector of private management instruments, with a view to improving efficiency, effectiveness and financial stability. Therefore some reforms have the objective of prompting a shift from a simple model based on simple following procedures to a managerial model based on performance and achievement of goals. Particularly in countries as United Kingdom or Italy, reforms aim to change the traditional bureaucratic approach of the public

administration, in accordance with the New public management principles. Previously those public systems had an organizational and managerial structure on the lines of a bureaucratic model and did not possess the necessary capacity to deal with the new needs of society; but the rising complexity to deal projects and planning, the lack of financial resources and European politico-economic integration required a process of modernization in public administration. The theory and practice of New Public Management has represented, over the last twenty years, one of the most significant events for the evolution of public administration in various developed countries. The New Public Management makes claims to being universal; in fact, initiatives inspired by this thinking way are common enough throughout the OCSE countries and have reached most

Commonwealth countries ( Borins 1998; Hood 1991, 1995a:166-170). The spreading of this vision could be seen as an epochal breaking point in the way the public sector is conceived, although doubts still exist regarding the components, the peculiar characteristics and the definition from itself. Indeed, the initials New Public Management represent a wide-scale formula, with various meanings are attributed. These range start from the general idea of modernization of the public sector just to the narrower meaning of rationalization of the public administration. The basic features of the New Public Management principles might be synthesized into three fundamental elements(Osborne e Gaebler 1993:277):

1. Re-definition of the boundaries between State and market through privatization and externalization. 2. Re-formulation of the macro-structure of the public sector through the delegating of state functions (at the lower organizational level) to within the macro-structure (this phenomenon could be denominated institutional decentralization or external decentralization). 3. Re-definition of operational rules characterizing the way in which the public sector carries out its functions and achieves its goals. With reference to re-definition of operational rules to achieve objectives, the main innovation introduced in this field take in consideration the recognition of the principle of distinguishing between politics and administration: moving from a bureaucratic model based on procedures to a managerial model based on performance and, by the end, the privatization of the employee

relationship in the public sector. The new relationship between politics and administration necessitated providing politicians with orientation skills and public executives with managerial skills in order to avoid political interference and to fully achieve managerial accountability (Marcon 1996, 1997; Mussari 1994a). The independent management of public executives distinguishes the old conception of public administration from the new one. In fact, the previous decision-making process was plainly managed by politicians, while executives could not be rendered accountable for their activities. The new model, on the other hand, envisages public executives with greater managerial autonomy, and at the same it implies that in the sphere of management

managers have full responsibility for results achieved in the execution of their duties. In this context, therefore, is important to know the drivers that allow to reach assigned goals, as the way how politics permit public managers at ones own discretion in operate. Managerial autonomy in public contexts The concept of autonomy (often synonymous of independence in the modern Anglo-Saxon world) comes from the word autonomos, used in the ancient Greek civilization. It means to make behavior rules at ones own discretion, however to be self made man in

thinking and action in a certain field of human activities; but I doesnt means autarchy (or autarky in an economic way) that indicates a statement of self-sufficiency without dependant relationship with the rest of the worlds. Least of all it isnt a state of anarchy, that means absence of authority or rules. To make something in autonomy means overall to decide consciously how to do on purpose, in freedom and with responsibility. Freedom as rational wish (Husserl, Scheler) or rightful will and responsibility (from the Latin respondeo, that means to answer to someone ) as capacity of a person to assume duties toward another one, paying in case of unsatisfying performance. For a manager working in autonomy means to set up the most

effective organization (by its own mental judgment, criteria and professional vision) to reach goals and tasks assigned, independently of others wishes and interests that could limit its rational choices. In a public context this freedom to choice operative means is extremely worth considering responsibility that politics give to executive levels

with reference to achievement of strategic goals defined at the political level. In fact turnover and spoil system of public managers take in consideration this level of responsibility: distinguishing

strategic choices by politics for one hand and operative choices for another. The former to satisfy needs of society and the second to reach desired results of politics by independent bodies and professionals. Human resources even recruited by a private work contract aimed to a project or for a limited horizon time. Academic researches aimed to evaluate the level of autonomy in public administration show up three dimensions of this concept ( Barbieri, 2007). They are: 1. Autonomy in human resources management 2. Autonomy in financial resources management 3. Autonomy in policy definition and implementation Considering that usually the policy definition is done at political level and that implementation is a result of all operations, to evaluate the level of autonomy of a public manager with the task to reach some strategic goals seems may be more useful distinguish three kind of action power with reference to: a) Autonomy in human resources management and recruitment b) Autonomy in financial resources planning and control c) Autonomy in purchasing strategy These typologies of autonomy represent dimensions which give us clear indications on what a public manager needs to organize own activity if he is responsible (with duties in charge) of goals achievement. If a manager has not the power to choose a competent

staff, approving or sanctioning the way as members do their job, how may he warrant good end results? If a financial budget to realize a policy does not cover costs of its effective implementation how will strategic goals be achieved? And if a manager has not the power to decide about quantity and quality of equipments, logistics, real estate uses and internal design, how could he run fundamental activities for policy? Altogether a consistent and significant managerial autonomy level is given by autonomy in human resources management and recruitment, combined with autonomy in financial resources planning and control and autonomy in purchasing strategy. The lack or the weakness of one of these dimensions decreases the comprehensive worth of the level. Thais means that a major autonomy in human resources management and recruitment raises in positive the managerial

autonomy level as a larger autonomy in financial resources planning and control does or a greater autonomy in purchasing strategy.

Autonomy in human resources management and recruitment

+ + MANAGERIAL AUTONOMY LEVEL + Autonomy in financial resources planning and control

Autonomy in purchasing strategy

Fig.1 Causal diagram explaining the effects of the managerial autonomy dimensions on total level

However these dimensions of autonomy must be appreciate by indicators, able to survey quantitative data, to estimate their contribution on the growth of the managerial autonomy level. Therefore, in order to identify scientific approach needs right indicators, in first place a

a organizational analysis of activities

susceptible of autonomy. In practice each single activity, that may be developed in autonomy, represent a leverage point essential to a responsible public management. It is obvious that in a public context the amount of leverage points available for the public manger is a result of political strategies in the matter of the workflow in the public administration. In some countries, like in Italy, they are allowed by Law. The estimation of the managerial autonomy level The first dimension of the managerial autonomy level is given from the autonomy in human resources management and recruitment. Scientific literature in the management field showed up the peculiar importance of human resources quality for a good achievement of results. Even if there is a lack of equipment, quality of a motivated workgroup can compensate this deprivation. Theories and strategies of management in this field are various and more or less complexes, but in an organizational way we can identify four macro area of intervention: a) Planning b) Recruitment c) Control

d) Motivation In the phase of Planning a responsible manager must define

quantity and quality of human resources indispensables to run up activities expected by his plan in the time. Therefore leverage points on this phase are the definition of positions, that means number of human resources to employ and the definition of professional skills required, that means abilities of human resources to employ. In the phase of Recruitment, on the base of professional skills required, the manager have to choose the member of his staff by a selection of eligible candidates to positions, considering workload and the tasks with the objectives to reach in the time. The phase of Control presume a definition of evaluation criteria, in order to appreciate the performance of a employee and a monitoring system for their assessment; while the so called phase of

Motivation take in consideration the possibility to give productivity bonus or, better, promotion prospects or to fine in the worst of the case or to suspend from office and to dismiss in extremis. Other dimension of the managerial autonomy level is given from the autonomy in financial resources planning and control. Planning, because it is no possible to develop some activities without a correct estimation of implementation cost and expenditures in the time.

Indeed a public manager could not be responsible of policy results when politics make it, defining the financial budget also, without his expertise involved in the policy design process. Leverage points in financial resources planning and control are referred to capacity of budget definition, prices definition (if users

have to pay a quota in order to benefit of public services ), with vision and power in outsourcing policies, contractors management and funds for expenditures, shifting financial resources when is required by unexpected events ; as the reduction of expenditures, if some opportunities arises (availability of effective equipments, re use of implemented solutions etc). By the end, the dimension related to autonomy in purchasing strategy is referred at the possibility to choose location of offices, to decide the size and the structure of property, to organize office systems (heating system, furniture etc) and to buy equipments providing to offer facilities to employees also (as cafeteria, crche etc). For each dimension, by the analysis of activities showed below, we can infer a set of indicators that give us the capacity the measure the decision power, constituent the level of managerial autonomy. In the whole we are able to get: Indicators of recruitment 1. Definition of positions 2. Definition of professional skills 3. Selection of candidates 4. Workload definition 5. Tasks assignment 6. Evaluation criteria definition 7. Assessment of employee 8. To give productivity bonus 9. To let promotion prospects autonomy in human resources management and

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10. To fine 11. To suspend from office 12. To dismiss Indicators of autonomy in financial resources planning and control 13. Budget definition 14. Pricing 15. Outsourcing policies 16. Control of funds for expenditures 17. Control of expenditures Indicators of autonomy in purchasing strategy 18. To choose location of offices 19. To decide size and structure of property 20. To organize office systems 21. To buy equipments 22. To offer facilities

If we give a balanced weight to each dimension and indicators, with a numerical value between 0 (absence of autonomy) and 100 (full autonomy) we get a useful tool able to survey the relevance of the managerial autonomy in a quantitative way. Objectivity and reproducibility of results are safeguarded. By this way is possible to analyze public policies introducing

managerial criteria in public administration with reference to operative independence of management. A system dynamics

approach can be useful to this purpose, considering a stock as level of managerial autonomy and a flow as variable increasing that flow.

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Rate increasing the autonomy

Level of managerial autonomy

Fig.2 Stock and flow diagram explaining dynamic of level of managerial autonomy

Analysis by system dynamics show up the effect of the flow on the level of managerial autonomy, but moreover it make clear how this flow is related to entity of dimensions defined previously.
Rate increasing the autonomy

Level of managerial autonomy

Autonomy in human resources management and recruitment

Autonomy in financial resources planning and control

Autonomy in purchasing strategy

Fig.3 Stock and flow diagram explaining effect of variables on the rate increasing the autonomy

Autonomy of the public manager by Law: the Italian case In 1993, the Italian legislator (inspired from New Public Management principles) with the Legislative Decree 29/93 aimed to introduced private management tools into the public sector with a view to improving its efficiency, effectiveness and financial stability. In particular, with regard to the relationship between politicians and public managers, the decree 29/93 aimed to give to public managers the same powers as private company managers by ensuring to

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management a level of autonomy from political bodies. In fact on this regard the previous regulation (D.p.R 748/72) recognized in politicians the power to influence managerial action considerably. The presidential decree n. 748/72 aimed to recognize precise competences in managers, but it did not face the hierarchical relationship which linked public executives and politicians. The political authorities were able to influence management activities through their power to lay down precise instructions for managers, their power of revocation and modification of a managers actions and their power to substitute the manager in the execution of his or her duties. That situation led to inefficiency in public management and an improper allocation and use of resources. Therefore the legislative decree n. 29 /93 stipulated a clear distribution of skills between politicians (orientation competences) and executives (management competences) and modified the hierarchical relationship between them through the elimination of the above-mentioned powers , which allowed politicians to influence managerial activity. Process reform had been starting. The objectives of the reform were finally implemented by the legislative decree 165/01, which coordinated and regulated all provisions concerning public employees, and by the legislative decree 150/09. In other words the growth of autonomy lack, decreasing the managerial autonomy level of public managers, required intervention to balance this negative effect. law

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Lack of autonomy B1

MANAGERIAL AUTONOMY LEVEL

Intervention by Law

Fig.4 Causal loop diagram explaining the hypothesis of balancing effect of the reform by Law

What are the results of this reform? May policy analysis study coherence between purpose of legislator and results of his action by law? For this purpose, in order to qualify and quantify the impact of this reform on managerial autonomy level of public managers, we will use the set of indicators for dimension obtained by the previous

Organizational analysis. Nevertheless, first of all, it is necessary to put a weight on each on them, in terms of percentage of assumed autonomy available by activity put into effect, as in the model showed below.

Autonomy in human resources management 36% Autonomy in financial resources planning and control 34% Autonomy in purchasing 30% Full autonomy 100%

Indicators of autonomy in human resources management and recruitment (36% ) 1. Definition of positions 3%

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2. 3. 4. 5. 6. 7. 8. 9.

Definition of professional skills Selection of candidates Workload definition Tasks assignment Evaluation criteria definition Assessment of employee To give productivity bonus To let promotion prospects

3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% (34%)

10. To fine 11. To suspend from office 12. To dismiss

Indicators of autonomy in financial resources planning and control 13. Budget definition 14. Pricing 15. Outsourcing policies 16. Control of funds for expenditures 17. Control of expenditures 6,8% 6,8% 6,8% 6,8% 6,8%

Indicators of autonomy in purchasing strategy 18. To choose location of offices 5%

(30%)

19. To decide size and structure of property 5% 20. To organize office systems 21. To buy equipments 22. To offer facilities 5% 5% 5%

Fig.5 Model of indicators to survey level of managerial autonomy in a public context

By a system dynamics approach policy analysis show up feedbacks of intervention by Law on dimensions above considered. Dynamics of the structure underlying legislator policy are studied integrating

organizational analysis and legal analysis, to verify the hypothesis of

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balancing effect of the reform, against the lack of autonomy in public management.
-

Autonomy in human resources management and recruitment MANAGERIAL AUTONOMY LEVEL + Autonomy in financial resources planning and control + B2 B3

Lack of autonomy B0

B1

Autonomy in purchasing strategy +

Intervention by Law

Fig.6

Causal loop diagram on effects that intervention by Law ought to

produce on problem (Lack of autonomy) or reform results expected

ANALYSIS OF LAW EFFECTS ON THE AUTONOMY IN HUMAN RESOURCES MANAGEMENT AND RECRUITMENT. Indicator 1: Definition of position and professional skills In order to the first profile of autonomy above considered, concerning the autonomy in human resources management and recruitment, this work analyzes what kind of autonomy the discipline ensures to managers in the definition of position and professional skills. On this regard the decree 150/09 introduces new provisions that increase the level of autonomy of public managers.

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These are the art. 6 co. 4-bis. which provides that managers individuate professional profiles necessary to carry out their institutional tasks with the aim to prepare the planning of the personnel requirements ; and the art. 16 co 1 lett. a bis which stipulates that managers propose resources and professional profiles necessary to carry out the tasks of the structure. But in contrast to policy finality, the legislative decree 165/01 introduced a provision which engraved negatively on managers autonomy. In fact the art. 4 co. 1 lett. c) of the legislative decree 165/01 provided that politicians have the competence in order to the individuation of human, material and financial resources to assign to managerial structures .

Indicator 2: Selection of candidates. About the selection of resources and the conferment of managerial appointment a positive effect on managers autonomy is produced by the art. 19 co. 5 of the d.lgs 165/01 which stipulates that the manager having a general managerial position confers the managerial appointment to managers assigned to his office. However there are also some norms of the same decree which engrave negatively on manager autonomy. These are the art. 19 co. 4 that allows politicians to confer general managerial positions; the art. 19 co. 6 which allows politicians to confer managerial appointments to external managers and, lastly, the art. 19 co. 8 which provides the spoil system for top management positions.

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Indicator 3: Workload definition and tasks assignment The d.lgs 165/01 engraves positively on this profile because the art. co. 1 lett.b) stipulates that general managers confer to simple manager the appointments and the responsibility of specific projects, define the goals that simple managers have to achieve and assign the consequential resources.

Indicator 6 and 7: Evaluation criteria definition and assessment of employee In order to this profile the discipline introduced by the reform increase the autonomy of public managers. On this regard the art. 16 co. 1 lett. e) of d.lgs 165/01 statues that general managers run, coordinate and check the activities of simple managers. Moreover the d.lgs 150/09 has introduced a new prevision , the art. 17 co. 1 lett. e-bis) which provides that managers carry out the evaluation of personnel assigned to their offices .

Indicators 8 and 9: To give productivity bonus and to let promotion prospects On this regard the decree 150/09 introduce a provision that increase the managers autonomy, this is the art. 17 co. 1 lett. e-bis) which provides that managers carry out evaluation of personnel assigned to own offices in order to correspond benefits and merit award. On the other hand, about the profile of career growth of the professional executives the d.lgs 165/01 contains provisions that decrease managers autonomy. In fact the art. 23 states that only

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managers who have held a general managerial position or equivalent duties for at least three years, may be incorporated on the higher managerial level. Actually a position conferred by politicians (who have the power to confer top manager and general manager positions) might have direct consequences on the managers career progression.

Indicators 10, 11 and 12: to fine, to suspend from office, to dismiss About this profile the d.lgs 150/09 increase managers autonomy by introducing two new provisions ( the article 55 bis and the article 55 quater) which allow public manager to inflict to personnel of his office several sanctions such as fines, disciplinary lay-off and dismissal.

ANALYSIS OF LAW EFFECT ON THE OF AUTONOMY IN FINANCIAL RESOURCES PLANNING AND CONTROL

Indicator13: Budget definition Under this profile the d.lgs 165 /01 contains provisions that engrave negatively on managers autonomy. In fact the art. 4 co. 1 lett c) statues that politicians have the competence to individuate financial resources to destine to managerial structure , while the art. 17 co. 1 lett e) provides that managers have only the competence to manage the financial resources assigned to their structures.

Indicator 14: Pricing

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On this regard the d.lgs 165/01 contains a provision that decreases the autonomy of professional executives. Actually the art. 4 co. 1 lett d) statues that politicians have the competence to define tariffs and fees which engrave on outside parties.

ANALYSIS OF LAW EFFECTS ON THE AUTONOMY IN PURCHASING STRATEGY About this aspect the d.lgs 165/01 contains provisions that engrave negatively on managers autonomy. In fact the art. 4 co. 1 lett c) statues that politicians have the competence to individuate instrumental resources to destine to managerial structure, while the art. 17 co. 1 lett e) provides that managers have only the competence to manage the resources assigned to their structures. CONCLUSION: REVIEW OF FEEDBACK COUNTERACTIG

THE REFORM PURPOSE Analysis does not verify the hypothesis of balanced effects on intervention by Law on problem, that means reducing the lack of managerial autonomy in public sector introducing measures able to reinforce autonomy in human resources and recruitment, financial planning and control and purchasing strategy. On the contrary, we

realize as Law introduce some limits to them, reinforcing the problem.

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+ -

Autonomy in human resources management and recruitment

+ + Limits in financial Lack of autonomy MANAGERIAL resources planning and AUTONOMY LEVEL control Limits in human resources + management and Limits in purchasing B0 B1 recruitment strategy + + R3 R2 R1 Intervention by Law -

Limits of Law

Fig.7 Causal loop diagram representing real effects of intervention by Law

If some measures let more autonomy to public managers in the field of human resource management (as capacity of assessment, sanctioning and motivating) others are designed in order to reserve action power only at political level. Then, in spite of general purpose the end result of this reform is quite modest.
Rate increasing the autonomy

Level of managerial autonomy

Evaluation criteria definition

Assessment of employee

To suspend

Autonomy in human resources management and recruitment

To give productiviy bonus

To fine

To let promotions prospect

To dismiss

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Fig.8 Stock and flow diagram representing tangible effects of intervention by Law

The quantitative estimation of the managerial autonomy level in the Italian public administration, since to 1993 (when private management tools was introduced into the public sector) give us an indication of growth of 24% until now. The value of this estimation is given by the total weight of all indicators, resulting positive in relationship with Law.
100

75

50

25

1st qt

2nd qt

3rd qt

4th qt

Non-com m ercial use only!

Fig 9. Growth of the managerial autonomy level by reform law

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