Lakhasly

Evaluation
Several evaluations of agency performance contracts, annual performance reports and chief executive performance contracts have been conducted.
In 1995, a study involving 13 agencies was undertaken for the Ministry of Finance to evaluate the use of performance contracts. The study showed that a substantial number of barriers to efficient agency working had fallen away as a consequence of the increased focus on results. Firstly, contracts acted as a vehicle for agency reorganisation processes and activities aimed at improving efficiency, such as the development of internal management and new mechanisms for monitoring results. Secondly, agencies managed to develop the necessary methodology for measuring and documenting even highly complex activities. Finally, contract management had generally led to an improved dialogue between agencies and departments, thereby reducing the asymmetry of information and creating a network for contact between the parties at all levels.
Pointing to possible improvements, the study recommended, among other things, greater involvement of ministers in setting and prioritising targets, a greater effort to ensure that agency contracts are in line with the objectives of the entire ministry and a more flexible use of performance contracts, allowing the concept to be adjusted to suit different ministerial circumstances.
In 1998, the Danish National Audit Office conducted a thorough evaluation of performance contracting in 20 agencies. By benchmarking contract-managed agencies with comparable agencies without a performance contract, the National Audit Office documented that the use of contracts leads to a substantial increase in overall efficiency. According the National Audit Office, however, there was still room for improvement. Targets should preferably be more precisely formulated to facilitate ex post assessment of
achievements; departments should allocate more resources to monitoring agency operations; and a clearer link between appropriated funds and targets should be established to increase pressure to improve productivity.
Since the introduction of annual performance reports, the concept has been systematically evaluated. In 1998, 1999 and 2000 the Agency for Government Management collected a large number of reports and evaluated the content of each one on the basis of its ability to give a balanced overview of agency operations and a thorough presentation of objectives and achievements. The selected agencies are ranked according to various criteria, making it easy to compare reports and highlight the best examples. An increase in the quality of the annual performance reports since 1997 has been documented.
In 1998, the Ministry of Finance conducted an evaluation of chief executive performance contracts. Based on an assessment of each contract and several interviews, it was concluded that top management in both departments and agencies regard the agreements as a useful supplement to agency performance contracts. In addition, the evaluation showed that managerial responsibilities can be measured and that the bonus attached to the CEPC gives the director general an incentive to improve performance. However, the Ministry of Finance also emphasised the need to modify the concept by making it less rigorous and easier to adjust to suit the needs of each ministry.