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21
ees believe they work under constraints that prevent them In Finland, the Finnish Road Administration undertook a rad-
from achieving similar reductions in costs. ical reorganization and created a large portion of the agency
as a separate, but wholly owned, delivery organization called
Performance measures are often used to explain why con- the Finnish Road Enterprise to compete with private contrac-
tracting out provides more value. How the union and man- tors. Finnra retained responsibility for program management
and procurement.
agement resolve issues concerning the development and use
of performance measures helps determine the union's accep- The Finnish Road Enterprise won 78% of the performance
tance or resistance. Thus, the union's role as a stakeholder in maintenance contracts (some were hybrids). As a result,
the performance outcomes of the agency will influence its Finnra found it necessary to create incentives for the private
opinion of performance measures. Other factors that influ- sector to continue to bid on the performance-based main-
ence the union's receptiveness to contracting and perfor- tenance contracts. Finnra issues stipends to those bidders
mance measures include the following: that did not win and paid for a portion of the costs of prepar-
ing a bid (Stankevich et al. 2006).
· Has the employer fully shared the rationale that moti-
vates the performance contract?
PARTNERING AND FRAMEWORK FOR PERFORMANCE-
· Has the union been given adequate notice and an BASED MAINTENANCE CONTRACTING
opportunity to make a proposal to do the work or rem-
edy the problem that the proposed contract is aiming
to resolve? For PBMC to succeed, it must first and foremost be viewed
· Does the employer partner with the employees in this as a partnership between the contracting agency and the con-
effort or do the employees develop their own proposals? tractor. Some reasons to form a partnership are to build trust,
· To what extent are performance measures used regard- establish a direct way to resolve issues, develop common
ing maintenance work and to what degree have employ- goals and objectives, foster creativity and innovation, better
ees been involved with defining performance goals, manage risk, work together to reduce costs, and jointly strive
measures, and targets? Is the union aligned with the for improved LOS and customer satisfaction. Good practices
general performance goals of the employer? in partnering have an important role to play in PBMC. There
· Does the union see the employer as doing all it can to is extensive literature on partnering and its benefits regard-
improve the capacity of the agency so that it believes ing construction and other transportation activities (Quality
contracting out is a reasonable alternative? Accomplishments Report ... 1997; Pakkala 2002; Stankevich
· Are there different performance measures for a con- et al. 2005). Those benefits are evident in PBMC according
tractor than what is expected of the current workforce? to survey responses.
If measures are different, has a reasonable opportunity
been offered to the current workforce to meet the con-
tract standards?
· Does the current labormanagement relationship as
evidenced by joint labormanagement initiatives give
any focus to agency performance outcomes?
A "no" to any of these questions can lead to resistance.
Past constructive involvement with the union as a stake-
holder is a predictor of its response to contracting and per-
formance measures.
It is common for the union to ask for a chance to be able
to perform the maintenance work to the same performance
standards that would be required of a contractor or to make
proposals to return outsourced work to the agency. The union
may seek a "level playing field" so that a comparison with the FIGURE 3 Analytic framework for performing research.
contractor properly weighs costs, quality, and avoidable barri-
ers that increase public costs. The union may seek to monitor
the contract to see whether the contractor meets deliverables. Figure 3, presents a framework that has four key features:
Overall, the union is going to be sensitive to its members and
their sentiments--the organization's human assets--and it 1. Partnering between the contracting agency and the
will seek investments in staff, equipment, or work design to contractor. Partnering also needs to extend from the
help them become competitive (Wyngaard 2007). contractor to subcontractors.
