Would “pay for performance” be good for the social services?

Outcomes ready for counting

There is a certain allure in the many kinds of legislative proposals that link pay to performance in the social services.  Some are getting serious consideration at state and federal levels, but we should be very careful with them.

My concern is in the potentially corrupting effect that slavish devotion to a single bottom-line metric could have on the work of the social service provider, much as we’ve seen the corrupting effect that slavish devotion to the bottom line “quarterly profits” has had in the corporate sector.

And slavish devotion it would be if service providers’ salaries depended on how well their employer met their financial, er, service, goals.  We’d see all manner of shortcuts, like creaming, skimping on the service, workplace abuses, and simple garden variety misreporting.   I know the mantra these days is to make nonprofits operate more like business, but I’m a skeptic.

I’m not against “pay for performance” in principle, but it is essential that the right performance measures be chosen.  Frankly, I’m not sure it’s possible to do with the exactitude needed to prevent widespread dissatisfaction.  Also essential is assertive quality control to lessen the threat of mismanagement, and more important, to be assured that the outcomes obtained are quality, reasonable, meaningful outcomes.

Even with seemingly simple social services, like, for example, a nonprofit training and employment program with a mission to provide employers with skilled workers, a program where “job placement” might rule as the payoff metric, it’s the quality of the service—the curriculum, the mentoring, the follow-up — that drives the outcomes.  The search for bottom line payoff metrics is more difficult when the goals of the service are more complex, like affordable housing, public education, or community philanthropy.

This was made clear by W. Edwards Deming, the founder of the quality control movement.  Far being just a bean counter or numbers guy, he said business success is more about quality than quantity, and that businesses make their money and grow their market by making products and services that meet specifications of quality.

And BTW, it’s through specifying the qualities of excellent social service that the art of social service delivery will advance.  If the various social service industries were induced to focus more on their own principles of quality work, they could develop a more skilled workforce, reduce their costs, and improve the production of meaningful outcomes.

Steven E. Mayer / May 20, 2011