Implementing "New Public Management": The Case of Employment Services in Quebec

By Laurin, Claude; Wagner, Sachenne | Canadian Public Administration, March 2011 | Go to article overview

Implementing "New Public Management": The Case of Employment Services in Quebec


Laurin, Claude, Wagner, Sachenne, Canadian Public Administration


Over the past two decades, "new public management" (NPM) has had a clear influence on governments around the world (Hood 1991; Pollitt 2002; Ridley 1996; Scott 2001). NPM reforms have taken place in many countries, including the U.K., New Zealand, the United States, Canada, Australia, Sweden, the Netherlands, Italy and Norway (Guthrie, Olson, and Humphrey 1999). The literature as to whether reforms have attained their objectives is rather scarce, and the existing empirical evidence yields mixed results (Bilodeau, Laurin, and Vining 2007; Boyne 2003). As a contribution to this literature, we summarize a reform process that took place at Emploi Quebec (EQ) from June 2001 to October 2006.

During this period, EQ undertook extensive negotiations with a large number of non-profit organization partners to reform the contracting system by which the agency transferred funds for the variety of employment services the organizations delivered. The goal of the negotiations was to establish acceptable prices for employment services based on an "output-based" system--rather than the previous "expense-based" system--of state-non-profit contracting. We describe the steps taken to reform a system whereby EQ compensated the nonprofit organization for expenses incurred providing the service to a system that pays for each client who receives employment services. Our description identifies the main hurdles that disrupted the negotiation process and the key decisions that, in the end, paved the way for output-based contracting.

Our analysis shows that, throughout the reforms, the committee to oversee the process placed a strong emphasis on using business practices in the procurement of employment services from non-profit organizations, the most obvious of which was the use of management accounting techniques and quantitative methods for determining the price paid by EQ for each client served. The committee used established management techniques to analyse the data in previous negotiated contracts and arrived at the conclusion that "output" should be the main factor used to determine the funds allocated for the employment services provided by its partners. The resulting output-based agreements between EQ and the non-profit organizations are closer to those found in the private-sector than were the expense-based agreements used prior to the reform.

These reforms should help government meet its goals of controlling expenses more effectively. Since the reform introduced controls for the number of clients who benefit from employment services, non-profit organizations can be held more accountable for their results than before. Under the new regime, these organizations have an incentive to increase the number of clients they serve, which should also provide incentives to increase the quality of the services they provide.

The article is organized as follows. The first section provides a brief contextual description of Quebec's employment service industry. The second section describes the early stages of the reform process, while the third section describes in greater depth the implementation process. The fourth section discusses the results and is followed by a brief conclusion.

Implementing NPM for employment services

At the beginning of the 1990s, the Quebec government introduced results-based management (RBM), a managerial approach typically associated with NPM. This managerial approach is aimed at improving the efficiency of the government and is based on four principles: 1) delegating responsibilities to make chief executives more directly responsible for resource allocation within their departments; 2) determining objectives; 3) measuring results using both qualitative and quantitative means; and 4) regularly communicating these results to the public in order to increase accountability (Quebec, Office of the Auditor General 1999).

Rather than being strictly concerned with rules and procedures, RBM focuses on clients, results and measurable outcomes. …

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