Illusory effects of performance management: the case of contracts for excellence in New York school districts

Performance Management systems are ubiquitous in contemporary public management. However, evidence of their performance effects is inconclusive. The Contracts for Excellence (C4E) reform required 58 New York State public school districts to develop individualized reform plans and report compliance and performance measures to authorities. This study evaluates C4E’s impact on organizational performance using a difference-in-differences approach. Findings suggest negative or precisely estimated null effects on standardized test scores ranging from −0.02 to −0.07 standard deviations. Findings suggest undesirable organizational responses may have compromised the reform, such as crowding out of local revenue collection and inflation of performance metrics.