Successful problem solvers? Managerial performance information use to improve low organizational performance

Abstract

Performance management is increasingly the norm for public organizations. Although there is an emergent literature on performance information use, we still know little on how managers engage in functional performance management practices. At the same time, growing evidence suggests that managers face pressure to improve low performance because of a negativity bias in the political environment. However, in managerial performance information use, the negativity bias might be reconsidered as a prioritization heuristic with positive performance attributes, directing attention to organizational goals with a favorable return of investment. I test this argument with data from public schools. A fixed-effect estimation is used to analyze how principals prioritize when they are provided with performance information on a number of different educational goals. Furthermore, a difference-in-differences model tests whether the prioritizations of certain goals have performance-enhancing effects over time. The analysis shows that principals prioritize goals with low performance and that prioritizations result in performance increase. The improvements primarily occur for goals that have a low performance level and that are repeatedly prioritized.