Performance contracting: Understanding variation across agencies in Danish Central Government

Abstract

Purpose

The purpose of this paper is to examine how variation in the content of the performance contracts (number and types of targets) across agencies can be understood.

Design/methodology/approach

The analysis is conducted as a cross-sectional quantitative study carried out through an analysis of performance contracts between parent ministries and their agencies in Danish Central Government.

Findings

The study finds that the size of agencies, measurability of tasks and ministerial affiliation are significantly related to the number of targets in the contracts, whereas ministerial affiliation and the internal organization of agencies are significantly related to certain types of targets in contracts.

Practical implications

The findings indicate, on the one hand, that it may be difficult to obtain the same kind of performance contracting across agencies characterized by different features. Thus, it may be difficult to put up universal standards for performance contracting for a broad range of agencies, and expect that they will all be able to meet them. On the other hand, the findings also indicate that the effort and knowledge actors put into the implementation of performance contracting matters. Therefore, some agencies may be able to get closer towards the recommendations for management by objectives and results.

Originality/value

The paper contributes to the existing literature, as it tests and shows the importance of other and further contextual factors affecting the formulation of targets in performance contracts than previous studies.

Citation

Kristiansen, M.B. (2017), "Performance contracting: Understanding variation across agencies in Danish Central Government", International Journal of Public Sector Management, Vol. 30 No. 2, pp. 170-188. https://doi.org/10.1108/IJPSM-11-2015-0192