Performance Based Organizations

Performance-Based Organizations (PBOs) are discrete units that commit to clear objectives, specific measurable goals, customer service standards, and targets for improved performance. Once designated, they would have customized managerial flexibilities and a competitively-hired CEO, who would sign an annual performance agreement with the Secretary and have a share of his or her pay depend on the organization's performance. The British, who have extensive experience with this concept, find that such agencies improve performance and cut administrative costs.

In a PBO, policy-making operations and regulatory functions are split from their program operations. The PBO focuses on programmatic operations. Not all government agencies are suited to become a Performance-Based Organization. Operations that do not have clear, measurable results should be excluded. For example, the foreign policy and planning offices in the State Department or basic scientific research offices at the National Institutes for Health may be inappropriate candidates.

For more information, contact John Kamensky at the National Performance Review, (202) 694-0009 or e-mail:

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