Theodore H. Poister Obed Q. Pasha Georgia State University Lauren Hamilton Edwards Sam Houston State University

Does Performance Management Lead to Better Outcomes? Evidence from the U.S. Public Transit Industry

Although performance management processes are widely assumed to be beneficial in improving organizational performance in the public sector, there is insufficient empirical evidence to back this claim. In this article, the authors examine the impact of performance management practices on organizational effectiveness in a particular segment of the public transit industry in the United States. The analysis utilizes original survey data on performance management practices comprising both strategy formulation and performance measurement in 88 small and medium-sized local transit agencies in conjunction with comparative outcome data drawn from the National Transit Database maintained by the Federal Transit Administration. The results provide evidence that more extensive use of performance management practices does in fact contribute to increased effectiveness in this segment of the transit industry.

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ver the past 20 years, some of the biggest questions of public management have revolved around performance management, the process of establishing goals for an agency or program, and then using performance information to help manage effectively so as to achieve those goals (Behn 1995; Moynihan and Landuyt 2009; Moynihan and Pandey 2010). In the public sector, performance management usually refers to engaging in strategic planning to establish a direction and major goals, setting more specific objectives and perhaps targets at multiple levels in the organization, and then using performance measurement to help focus on achieving them (Poister 2010). Thus, Moynihan defines performance management as “a system that generates performance information through strategic