University of East London
East London Business School
Rheinische Fachhochschule Köln
Postgraduate Programmes
MBA - Part Time
Management Dissertation
Cologne, May 2008
Prepared by:
Gabi Scholz
The role of upward feedback in effective Federal
public administration in Germany
- as part of the new public management and modernisation strategy
- ii -
Management Summary
Recently, private and public organisations have been using upward feedback to meet new
challenges in human resource management in public administration. Most of the
discussions dealing with the accurate use of `modern instruments' like upward feedback for
the management development process can be found outside Germany. Upward feedback
focuses on managerial development rather than having a judgemental purpose.
This paper addresses literature research dealing with upward feedback, which suggests
that upward feedback can lead to performance improvement. Most research studies
discuss the use of this instrument in private companies or in local public agencies.
There is almost nothing in the literature about whether upward feedback is used at the
federal administrative level in Germany. Consequently, this the paper examines whether
the instrument of upward feedback is really used rarely at the federal administrative level in
Germany. To analyse whether the instrument of upward feedback is used at the federal
administrative level in Germany the researcher designed a questionnaire, which was
sent to all 15 supreme federal authorities (the Federal Chancellery and the fourteen
Federal Ministries) and to 54 subordinate federal administrations along with information
regarding the purpose of the research. Information from 69 respondents shows that
16 % of federal authorities are already using the instrument on a regular basis, one for
ten years and another for eight years. Some 22 % are planning implementation in the
near future and two of these have already undertaken a pilot project with good results.
The paper identifies salient concepts, in the field of upward feedback, which are
currently being employed in the private and the public sector. No ideal approach can be
found in either the literature or in practice. However, one fundamental conclusion was
identified: it is not enough simply to receive feedback. An organisation has to take further
aspects into account, for example to define and communicate the purposes of the feedback
before starting the feedback programme, to help employees to interpret and react to the
ratings and to set up rules on how managers are to deal with the results etc. If this is done,
the instrument can be a powerful tool for managerial developmental purposes.
- iii -
Contents
Management Summary ...ii
Index of Tables...v
Index of Charts...v
Acknowledgements ...vi
1
Introduction...2
2
History ...7
3
Development ...8
3.1
New Public Management ...8
3.2
Trends in Germany ...12
3.3
Upward feedback ...17
4
The theoretical background of the instrument `upward feedback' ...18
4.1
Definition ...20
4.2
The benefits of upward feedback ...21
4.3
The purposes of the upward feedback...26
4.3.1
Appraisal versus Development...28
4.3.2
Cultural Change, Communication and Team work...30
4.3.3
Motivation ...30
4.3.4
Improving Leadership through development ...32
4.4
Overview of the formal components and anonymity versus open...36
4.5
Covered areas: Items to be rated ...39
4.6
How to deal with feedback findings ...43
5
The practical background of `upward feedback' ...47
5.1
Methodology...48
5.2
Results ...49
5.3
Limitations of the Research ...52
6
Conclusion ...53
7
Managerial Implications ...56
8
References ...57
- iv -
9
Appendices ...68
9.1
Appendix A: Glossary...68
9.2
Appendix B: German questionnaire sent to the respondents ...69
9.3
Appendix C: English translation of the questionnaire sent to the
respondents ...74
- v -
Index of Tables
Table 3.1
Number of public employees in four OECD countries between
the year 1990 and the year 2000
Table 3.2
Number of public employees in Germany between 1996 and
2006
Table 4.1
What supervisors of the Washington Gas Light Company
thought in the early 1950s about implementing upward feedback
Table 4.2
How feedback affects individual performance by motivation
Table 4.3
Formal components of upward feedback
Table 4.4
Summary of key findings from a questionnaire analysing overall
value to recipients of feedback
Table 4.5
Summary of key findings from a questionnaire analysing action
undertaken after receiving feedback
Table 5.1
Use of upward feedback at the supreme federal level in
Germany
Index of Charts
Chart 3.1
Areas of modernisation in Germany in the first 10 years of NSM
Chart 4.1
Reasons for the implementation of upward feedback
Chart 4
.2
The four `types' with different self-others-awareness and their
tendencies towards improvement
Chart 4.3
The Leader/Manager Dimensions
Chart 4.4
The Leader/Manager `Map' of Behaviour
Chart 5.1
Use of upward feedback at the federal level in Germany
Chart 5.2
Use of upward feedback at the supreme federal level in
Germany
- vi -
Acknowledgements
I would like to express my sincere thanks to Isobell and Bernard Pejn who were
incredible in supporting me in my English and advised me in a patient, constructive and
motivating way. Without this support I would not have been able to undertake this
dissertation in the way that I did.
I am also indebted to all the agencies which supported my practical research by
providing me with the large amount of inside information needed to complete this work.
Finally, I want to thank my parents without whose sympathy and patience I never could
have accomplished this paper.
- 1 -
`It takes two to see one.'
C. S. Lewis (as cited in Dayton 1995:5)
`O' wad some poower the giftie gi'e us, tae see o'orsels as ithers see us.'
Rabbie Burns (as cited in Spencer)
The translation of these words of the Scottish poet may clarify the meaning:
`Oh would some, the gift give us, to see ourselves as others see us.' (Spencer)
`In the right key, anything can be said, in the wrong key, nothing. The only
delicate part is the establishment of the key'
George Bernard Shaw (as cited in Spencer)
- 2 -
1 Introduction
The object of this research was to determine the use and the effect of upward feedback
within public sector management in the federal administration in Germany.
In turbulent times like today in which the environment changes very fast, the burdens,
with which local governments have to deal, are getting tougher. Among these new
challenges are
`globalisation, economic competition that cuts across national borders, social and
political upheavals, technological change, threats of terrorism, and a rapidly
changing labour market' (United Nations 2005b:1).
As the United Nations points out,
`the development of an effective, competent and forward looking public service as
well as strong but lean State institutions is one of the greatest challenges nations
around the word face today' (United Nations 2005b:iv).
This shows very clearly that the public sector is also becoming aware of the increase of
international competition and globalisation.
The Federal Government of Germany has recognised that focussing on the future is
essential to meet today's challenges. As stated in the coalition agreement of 11
November 2005, the Federal Government of Germany desires to create an innovative,
capable and efficient administration.
It became obvious that it is not enough just to change organisational structures. The
public sector all over the word realizes, that something has to be changed. What this
could be is not clear at the moment. In Germany for example a lot of "reform waves"
(Reichard, 2003:347) arose, but up to now the federal framework legislation is an
obstacle to reforms, especially in respect of the treatment of civil servants. Restrictions
due to the much formalised civil servant law constrain a lot of reform ideas.
- 3 -
In the past, public-service personnel was often identified as one of the key problems of
the public service due to the fact that it accounts for 25 % - 70 % of the total expenditure
and therefore could be considered the key cost factor (Klages 2001:443). This led to the
declaration in Germany that the reduction of personnel had to be a priority issue at all
administrative levels. Germany was not the only country, which tried to solve fiscal
problems in this way. In 22 of the 27 member countries of OECD such downsizing
programmes in the public sector were carried out between 1987 and 1992 (United
Nations 2005a:53). As the United Nations claims, reducing the number of staff without
redefining the functions of the government did not provide a solution to the underlying
problem (United Nations 2005a). As Klages explains, this situation led to a discrepancy of
diminishing performance capacities on the one hand, and the growing demands, on the
other which lead to the fact that the public sector is currently facing the dangers inherent
in an expanding capacity gap (Klages 2001:444). Another assessment added, that
`fiscally driven reduction of state employment and functions have gone too far
and have not led to general and significant efficiency and accountability
improvements' (Therkildsen, O. 2001 as cited in United Nations 2005a:54).
To overcome this crisis, the idea of `New Public Management' (NPM) has emerged as
an answer on a broad international basis. Klages noted that `this concept can be said to
be based on the conviction that the introduction of managerial thinking and the
employment of managerial instruments used by the private sector will mobilise
productivity reserves, which will improve public-sector efficiency to an extraordinary
degree' (Klages 2001:444). There is a widespread recognition - especially in
discussions dealing with the topic of the `managing change process' - that
organisational changes, irrelevant of their nature or extent, have to be accepted by the
employees who are supposed to put these changes into effect. Greenberg and Baron
argue that
`Organizational changes that are "sprung" on the workforce with little or no
warning might be expected to encounter resistance simply as a knee-jerk
reaction until employees have a chance to assess how the change affects them.
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In contrast, employees who are involved in the change process are better able to
understand the need for change and are, therefore, less likely to resist it:'
(Greenberg and Baron 2003:605).
In the past employees, especially in the public sector, as in many private organisations,
were not managed, they were administrated rather than managed (Brown 2004). There
has been a rethinking in this area. Recently the public sector realized that good people
are the "lifeblood" of each organisation or as Bach outlined, human resources are the
most important `asset' of any organisation (Bach 2001:4). Some claim, that cash is the
"lifeblood" of each organisation public or private. It is a moot point to say who is right.
One thing is obvious people are very important for the success or failure of any
organisation and therefore should be managed in a sensitive way.
Accordingly as Klages (2001) points out there is a growing awareness that NPM can
only be realised and work effectively if public employees become actively involved in its
development. This led to public service personnel emerging as the most important
resource in the modernisation process and one which decides success or failure.
With this in mind the Federal Ministry of the Interior argues that, the Federal
Administration's contribution towards budget consolidation cannot and should not be
achieved primarily through cutting employees' income (Federal Ministry of the Interior of
the Federal Republic of Germany, 2006). It claims that there is a need for innovative
solutions aimed at increasing administrative efficiency and flexibility. These innovations
are expected to enhance productivity and create better income perspectives for
employees (Federal Ministry of the Interior of the Federal Republic of Germany, 2006).
The Federal Government of Germany has set up a programme under the name
"Focused on the Future: Innovations for Administration". The aim of this programme is
to present a universal strategy for the further modernisation of the Federal
Administration that encompasses, as well as other areas, the area of human resource
management. To add more emphasis to the importance of this special issue the Federal
Ministry of Interior of the Federal Republic of Germany on the one hand and the trade
unions on the other signed the collective `Modernisation and Further education'
agreement for the federal administration on the 5
th
of October 2007. The parties to this
- 5 -
declaration want to develop and strengthen topics like innovation, further education and
executive development in the federal administration (Federal Ministry of Interior of the
Federal Republic of Germany 2007).
In times of change the role of leaders is of particular importance. If employees have
faith in the abilities of formal leaders and if there is a climate of trust between the leader
and the team, the implementation of change can be successful (Bacal 2008). Due to
that leadership, change management and human resource management have become
important topics in public sector management (Van Thiel et al. 2007). Development and
training of leaders has become an elementary aspect. As Ergun points out the
preparation and development, particularly of senior administrators, is essential for the
successful implementation of new development policies (Ergun 2007). One tool to
develop leadership qualities, which is discussed in the literature, is upward feedback.
This research will concentrate on analysing the instrument of upward feedback for
executive development purposes in public administration to meet today's challenges.
Modernization and reform discussions in Germany often do not cover this aspect very
deeply.
New challenges in human resource management in public administration like the
pressure of globalisation, technological changes and other issues are very much
discussed in administrative practice and literature worldwide. Most of the discussion
dealing with the accurate use of `modern instruments' or `typically/originally business
instruments' like upward feedback for the management developing process in public
administration can be found outside Germany. Most research studies discuss the use of
this instrument in private companies or in local public agencies. This does not mean,
that the issue is not important for Germany's federal administration the opposite is the
case. One could get the impression that Germany somehow missed an international
trend. This seems to be more the case at the federal administration level. At the local
administration level more reforms, new strategies and debates can be recognized.
The author is working for a federal authority in Germany, which is subordinate to a
Federal Ministry of the Federal Republic of Germany. Currently this institution is thinking
- 6 -
about implementing an upward feedback system for executive development purposes.
At the moment it is uncertain if such an instrument is of any use to a public
administration especially at the federal level. If it is of any use the question of which
special concept, process or tool should be used still remains.
Against this background the principal aims of this research are:
1. To identify and introduce salient concepts in the field of upward feedback, which
are currently being employed in the private and the public sector.
2. To analyse the application and the utilisation of these concepts in the public
sector in Germany by concentrating on the federal level and compare and
contrast these to methods and use in the private sector.
3. To examine the effect of upward feedback on managerial behaviour.
4. To discuss if and how administrative work could be improved by implementing
an upward feedback process for the development of current staff at the federal
administration level.
5. To examine the application of the research to the current employer.
6. To set out substantiated recommendations to the current employer as well as to
other federal administrations for future human resource practice.
- 7 -
2 History
The German public administration model is historically mainly based on the model of
bureaucracy typified by Max Weber It is often described as a classical system of
administration (König 2001). Among other things, bureaucracy is characterised by
hierarchical coordination and control, a strict and uniform chain of discipline and
command, and legal authority (Höpfl 2006). The hierarchy is defined by clear lines of
authority and all employees have to know where they stand in relation to this line and
that they have to respect the chain of command (Borgatti 1996). As a result, common
appraisal methods had a judgmental character and were only given in a top-down way
(Berman et al. 2006, Olesch and Paulus 2000). Bottom-up communication was not
sought, tolerated nor practised. Subordinates were expected to follow their supervisors
without questioning whether or not blind obedience made sense in meeting the
organisational goals. The words of the leaders were `indefeasible'.
In recent years this structure has come in for a lot of criticism, because it is seen as
insufficiently flexible and efficient in meeting today's challenges. Keywords like `team',
`network', `information', `knowledge', `empowerment' etc. are seen as representing the
best way forward in meeting these challenges rather than strict hierarchical coordination
(Höpfl 2006). It is commonly recognised that a team is always stronger than an
individual and therefore it is a good idea when supervisors begin to be more a part of
their team rather than standing beside or above it. Leadership development is one vital
aspect in changing these common bureaucratic structures (Kroppenstedt and Menz
2001). To reach this aim it is expected that more valid feedback might be a good tool in
identifying the areas in which improvement is needed. In addition to this, it is expected
that a well implemented feedback culture - including a bottom-up approach - in
organisations helps to build teams and to create more open communication. Whether
this aim can be achieved by the implementation of a tool like upward feedback needs to
be analysed in more detail.
- 8 -
3 Development
The following chapter intends to give a brief overview of the development of New Public
Management (NPM), the trends relating to this topic in Germany and the instrument of
upward feedback. The paper will concentrate on relevant aspects dealing with human
resource topics and therefore will not address other topics which are discussed under
the heading of New Public Management such as `Lean and highly decentralized
structures', `managing for results', `risk management' or `the use of divisional structures
in public service'.
3.1 New Public Management
German and French models in particular are often mentioned as typical examples of the
so called `classic public administration models' which developed over more than two
centuries (Homburg et al. 2007). Hughes describes this traditional model as:
`An administration under the formal control of the political leadership, based on a
strictly hierarchical model of bureaucracy, staffed by permanent, neutral and
anonymous officials, motivated only by the public interest, serving and governing
party equally, and not contributing to policy but merely administrating those
policies decided by the politicians' (Hughes 2003:17).
In the late 70s, mainly as a reaction to financial crisis, this traditional model came under
pressure. The main criticism was that the old system was too inflexible and did not meet
public acceptance any more (Homburg et al. 2007; Schedler and Proeller 2006). In the
United Kingdom, calls for elementary reforms arose in the 70s and therefore could be
called a precursor in this area. In the 80s public management became an active
element in policy-making in other countries like New Zealand, Australia and Sweden
(Barzelay 2001; Larbi 2006).
International Organisations like the Organisation for Economic Co-Operation and
Development (OECD), the World Bank and the International Monetary Fund, the United
Nations Development Programme and the European Commission became interested in
- 9 -
advising their members and clients worldwide of the process of improving public
management (Hughes 2003, Lynn 2006, Wollmann 2001). In 1990 the OECD formally
established its Public Management Committee and Secretariat, also called PUMA.
According to Barzelay PUMA was conferring on public management the status normally
commensurate with more conventional domains of policy (Barzelay 2001:2). Some surveys
by the OECD in the early 1990s concluded that new business management techniques and
practices were used in a lot of OECD member countries to bring changes in public
management (Kickert 1996; Larbi 2006). As Larbi noted `these practices and techniques
have conventionally been labelled the New Public Management' (Larbi 2006:25).
The components of NPM have developed over the years but still there is no consensus
among the authors on the subject of what NPM covers (Larbi 2006). However on one
feature the writers seem to agree: the core principle of NPM deals with an emphasis on
transferring private sector management techniques into the public sector as part of a broad
strategy to achieve efficiency, effectiveness and quality of service (Brown 2004, Larbi 2006,
Kickert 1996, Schedler and Proeller 2006). This happened in response to the administrative
need to reduce government expenditure, provide more efficient services and decrease the
scope and reach of government-provided public goods and services (Brown 2004).
By analysing the ten principles of the reform process of public sector organisation which
were formulated by Osborn (1993), who is according to some authors one of the
management gurus of NPM (Steijn 2002:4, Homburg et al. 2007:1), one has to
recognize that one fundamental part is missing the employee. The ten principles
Osborn found were catalytic government, competitive government, mission-driven
government, result-oriented government, customer-driven government, enterprising
government, decentralisation, community-owned government, anticipatory government
and finally market-driven government (Osborn 1993).
From a human resource management perspective this is a disaster (Steijn 2002). As
pointed out before (see Chapter 1), for any successful organisational change it is
fundamental to take human resource aspects into account as well. That the first level of
reform covered only topics like downsizing the current staff might suggest that this
reform level was manly driven by financial issues. Fiscal pressure has been one of the
- 10 -
key drivers for reforms. As pointed out before, public-service personnel were often
identified as one of the key problems of the public service due to the fact, that it
accounts for 25 % - 70 % of the total expenditure and therefore could be considered the
key cost factor (Klages 2001:443). Nogueira and de Santana claim that the financial
side of the reforms began from the `diagnosis that the government apparatus was
bloated with personnel who cost much and did little' (Nogueira and de Santana 2002:4).
Due to the economic recession all over the world in the 1980s and early 1990s the
public sector reforms concentrated mainly on structural changes.
The public sector tried to become more efficient by reducing its size and therefore many
OECD countries enforced a downsizing policy of the public sector workforce during that
time (Shim 2001). Table 3.1 illustrates the employment trends of total public
employment over ten years in four selected OECD countries and points out very clearly
the fiscally driven downsizing process. One major downsizing initiative was undertaken
in the United Kingdom. Between 1990 and 1999 the number of public employees
decreased by 34 %.
1990
1995
1997
1999
2000
Changes
between first
and latest year
in
%
Canada
Federal Government
406.366 371.053 337.713 330.003 336.603 -17%
Municipalities
869.120
1.370.450 891.483 893.709 890.915 3%
Regional Government
1.387.076 907.405 1.315.126 1.312.806 1.320.619 -5%
Total
2.662.562
2.648.908
2.544.322
2.536.518
2.548.137
-4%
Finland
Central Government
146.948 124.670 123.214 125.481 123.721 -16%
Municipalities
433.539 393.621 418.172 411.151 415.613 -4%
Total
580.487 518.291 541.386
536.632
539.334
-7%
New Zealand
1
Central Government
189200
201110
189560
190350
186610
-1%
Municipalities
20700
22910
19600
20200
18695
-10%
Total
209900
209900
209160
210550
205305
-2%
United Kingdom
Total
5.267.000
3.674.000 not
available
3.477.000 not
available
-34%
Notes:
1. Data refer to full-time equivalent
2. Structural change
Table 3.1 Number of public employees in four OECD countries between the year
1990 and the year 2000
Source: by the author, Data from OECD (2001), OECD (2002) and Shim (2001)
- 11 -
As Ingraham outlined, the question of how to manage the people who would have to
achieve all the new challenges lagged behind the first level of reform by several years
(Ingraham 2007). However a broad and new way of thinking about the careful
management of human resources could be recognized in the late 1990s. There was a
widespread recognition that decentralization and budgeting were not working by
themselves to solve the challenges which were being faced by the public sector. This
has led consequently to the fact that `the need to manage people well [...] is now a
recurring theme in administrative reforms in many countries' (Ingraham 2007:525).
For a few years a change can be seen in the public sector concerning human resource
issues. For instance the public sector concentrates more on topics like leadership
development to meet the new challenges in the new administrative environment of the
21
st
century (Shim 2001). One common technique for leadership development in many
organisations nowadays is upward feedback (Van Dierendonck et al., 2007a;
Greenberg and Baron, 2003).
A good example for this trend can be recognised in the United Kingdom where 360
0
feedback, in which upward feedback is one element, was implemented for all senior civil
servants by the end of 2001 (Cabinet Office 2001; Morgan et al. 2005). It was driven by
the new public management trend and based on Sir Richard Wilson's report on civil
service reform (Morgan et al. 2005).
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