JPART 20:i261–i279

INCENTIVES AND PUBLIC SERVICE PERFORMANCE: A SPECIAL ISSUE

Does Public Service Performance Affect Top
Management Turnover?
George A. Boyne*, Oliver James† , Peter John‡, Nicolai Petrovsky§
*Cardiff University;  University of Exeter; ‡University of Manchester;
§University of Kentucky

ABSTRACT
Political and organizational theories suggest that the turnover of chief executives and other
members of senior management teams are likely to be influenced by public service
performance. We use a panel data set of 148 English local governments over 4 years to test this
proposition. The empirical results show that performance has a negative effect on turnover, but
that this effect is weaker for chief executives than for members of their senior management
teams. In addition, top team turnover is higher in the years following a chief executive
succession. The evidence suggests that chief executives can influence top team turnover
by attributing responsibility for poor organizational performance to other senior managers.

In this article, we explore whether public service performance makes a difference to the
turnover of top managers in public organizations. This is an important question because
most advanced democratic systems of government partially insulate top management (defined as chief executives and other senior managers) from politicians’ and other stakeholders’ judgments about performance, so that they can get on with managing services. Whereas
fewer posts in the United States enjoy such protection than in most other advanced democracies, a large number of managerial posts in public organizations are protected against
dismissal, which can only occur through procedures devised to guarantee due process.
Given these protections, we should not expect a strong effect of performance on senior
management change. On the other hand, senior managers are expected to be accountable
for performance and to accept responsibility for results, ultimately by resigning or being
dismissed from their positions, which implies there is such an effect. The latter view has
become more prominent with New Public Management reforms emphasizing both managing for results and accountable management (Hood 1991; Pollitt and Bouckaert 2004).
These developments raise the question of whether, and in what way, organizational performance affects senior management team turnover. Are top officials more likely to retain
their posts when public service standards are deemed to be good, and to move on when
standards are perceived as weak? Further, does the impact of performance on turnover
differ between chief executives and other senior officials in public organizations? In

Author order is alphabetical: all make an equal contribution to the article. Address correspondence to the author at
boyne@cardiff.ac.uk.
doi:10.1093/jopart/muq024
ª The Author 2010. Published by Oxford University Press on behalf of the Journal of Public Administration Research
and Theory, Inc. All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org

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particular, are chief executives able to pass on the blame for poor performance to members
of their senior management team?
Although a growing body of research in the last decade has supported the view that
management matters for performance (Boyne et al. 2006), there are few studies of whether
performance matters for managers. Theoretical arguments that organizational performance
is associated with turnover derive mostly from the large literature on control of senior management in private firms. The sources of senior management turnover in public organizations are also of great practical and policy interest,1 yet there is little theoretical or empirical
work on this topic (a rare exception is McCabe et al. 2008).
We now propose hypotheses about the relationship between service results and turnover in the public sector, based largely on political principals’ incentives for removing
bureaucratic agents who appear to have led an organization to weak performance and their
motives for retaining agents who have overseen strong performance. We take account of the
perceptions of performance of both government agencies and citizens and examine whether
the link between performance and turnover differs between these measures. Next, we operationalize our theoretical variables and test our hypotheses against a 4-year panel data set
on 148 English principal local governments, covering financial years 2002–03 to 2005–06.
We estimate linear panel data models of the senior management turnover rate and logit
models of the presence or absence of a chief executive succession. Finally, we draw a number of conclusions for research on leadership turnover.
THEORIES OF ORGANIZATIONAL PERFORMANCE AND MANAGERIAL TURNOVER

The large organization theory and management literatures on senior management turnover
and executive successions in the private sector fall into three main strands (Pfeffer and
Salancik 1977). One is concerned with the consequences of senior management turnover
for large organizations. Another is concerned with the causes and consequences of ‘‘insider’’ or ‘‘outsider’’ succession. Much research fits in this strand, as does the limited work
on the public sector, such as Boyne and Dahya (2002, 185–7), Hamidullah and Wilkins
(2007), and Hill (2005). The final strand, of which this article is part, is concerned with
the effects of organizational performance on senior management turnover.
Many empirical studies of private corporations find that the tenure of senior managers
is contingent on organizational performance, as measured by financial indicators, such as
share prices and rate of return on investment (for summaries and reviews of these studies,
see Brickley 2003; Furtado and Karan 1990; Kesner and Sebora 1994). The main theoretical interpretation of this finding is that board members use performance information to
punish or reward senior managers. If performance falls below the standard achieved by
competitors, or is less than has recently been achieved by the firm, then board members
take steps to ease out or move aside the chief executive or the entire senior management
team in an attempt to turn the tide. This is not an altruistic act to save the company: the
reputation and remuneration of the board members themselves are strongly linked to the
financial success of the companies they are associated with.
1
There is a particular interest in this topic in the United Kingdom; for instance, see ‘‘Tougher at the Top? Changes in
the Labour Market for Single Tier and County Council Chief Executives—a Discussion Paper,’’ The Audit
Commission, July 2008, and ‘‘Making a move’’ in the British local government professionals’ magazine The MJ,
October 11, 2007.

Boyne et al.

Does Public Service Performance Affect Top Management Turnover?

In this article, we draw on both organization theory and political science to examine
the links between performance and the turnover of senior management of local public services provided by democratic governments. In the public sector, elected bodies such as legislatures, councils, and school boards can be seen as the rough analogue of the board of
directors. There are clear incentives in the public sector for incumbents to care about public
service performance. However, politicians and senior managers understand that it is not just
performance but perceptions of their responsibility for performance that are at issue, leading to various blame games as individuals seek to avoid responsibility for poor outcomes
(Hood 2002). In the contemporary public sector, it appears that politicians and senior management share the propensity for being blamed by stakeholders in policy fiascos (Hood
et al. 2009; Weaver 1986) and for failure to meet policy targets (James 2004).
Local political incumbents’ chances of re-election partly depends on the judgments of
external stakeholders on the standard of public service provision. In moral hazard models of
electoral responsibility, the repeated need for re-election and citizen monitoring gives
incentives to politicians to exert effort (Ferejohn 1986). Research has shown that voters
are concerned about public service performance at the local level, with low performance
translating into vote share losses for the incumbent administration (James and John 2007).
This research mirrors a more general tendency toward so-called valence issues, such as
performance, where electors agree on the desirability of certain public services (Clarke
et al. 2004; Stokes 1963). This tendency reinforces politicians’ concern with public service
performance.
The theories just discussed suggest that politicians should be concerned about their
bureaucratic agents’ contribution to performance outcomes, and to apply rewards or sanctions to them, such as the decision to retain or replace the senior managers who run the
organization. Even if performance is not directly the consequence of professional administrators’ action or inaction, moving them on may be a way for politicians to try and persuade voters that it was administrators rather than politicians who were responsible for
disappointing results. Research on the performance of fifteen local governments in England
found that a poor Comprehensive Performance Assessment (CPA) was a trigger for senior
managers to depart in some, but not all, cases (Turner and Whiteman 2005). However, the
extent to which politicians can change managers may be limited by the need to attract and
retain competent managers.
There are statutory protections against dismissal of managers in many public organizations. Nevertheless, even if outright dismissal might be difficult, senior managers can be
induced to leave voluntarily through increases in oversight and micro-management by the
elected body. For example, Brady and Helmich (1984, 30–1) describe how an American
school board heavily involved itself in the day-to-day operations of the school district until
the superintendent chose voluntary early retirement. Generally, we expect that politically
motivated change mostly occurs by these and other means, including negotiated early retirements and early departures with severance packages. It is often impossible to disentangle such induced departures from voluntary departures, even in the private sector (Osborn
et al. 1981; Wagner, Pfeffer, and O’Reilly 1984). The bottom line is that politicians have
the motive and means to remove senior managers when organizational performance is perceived to be low. Thus, our first hypothesis is
H1 The relationship between perceived organizational performance and the turnover of
senior managers is negative.

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Not all senior managers are exchangeable bureaucratic agents. Rather, the interests
and actions of a chief executive and the remainder of the senior management team2
may diverge when organizational performance is perceived to be poor.
The allocation of responsibility for performance between the chief executive and
members of the senior management team may not be straightforward. The chief executive
is part of the senior management of the organization, but he or she is also in charge of it and
is responsible to politicians for overall performance. In this sense, he or she makes judgments about the rest of the management team. So, just as new political leaders may replace
a chief executive who was appointed by their predecessors (Boyne et al. 2010), so a new
chief executive may wish to change the membership of the senior management team. Studies of private organizations suggest that incoming chief executives seek to distance themselves from their predecessors and to adopt distinctive priorities and strategies (Bigley and
Wiersema 2002; Simons 1994). In the public sector, radical strategic change, such as moving into new markets or closing down services, is not a likely course of action because of
legal and political constraints (Boyne and Walker 2004). The default strategy is therefore to
change the organization itself, which usually involves internal restructuring and transfer of
responsibilities between departments. This may lead to the reconstitution of the senior management team, either through expansion, contraction, or reshuffling of portfolios between
existing and new members. Even if no structural change takes place, a new chief executive
is likely to want people in the senior management team who are sympathetic to the revised
agenda for the organization. Managers appointed by the previous chief executive might be
viewed as loyal to the old regime or lacking the skills to implement the new strategies. In
this case, new senior managers who fit the chief executive’s preferences and policies are
likely to be appointed. For these reasons, the impact of a chief executive is likely to increase
turnover in subsequent periods, and our second hypothesis is
H2

Chief executive succession is positively related to senior management team turnover.

Even controlling for the effects of chief executive turnover, members of the senior
management team other than the chief executive may be especially vulnerable if performance is perceived as poor. Just as politicians have incentives to shift blame for weak
results onto appointed officials, so there may be an incentive for chief executives to remove
other senior managers because being considered responsible for poor performance would
be detrimental not only for their tenure in their present position but also for their chances on
the market for similar positions. Chief executives’ prospects in the labor market depend to
a large extent on the reputation of the organization they are working for. This holds even for
chief executives in the later stages of their careers, who have an incentive to be associated
with a high-reputation organization in order to obtain appointment to boards and other roles
after their formal retirement (for a theoretical exposition, see Tadelis 2002). Boeker (1992)
provides an illuminating study of chief executives attributing responsibility for low performance to other senior managers. Evaluating the effect of performance on rates of chief

2
A chief executive is the most senior appointed official in a public organization, who reports to the elected officials
overseeing the organization. Examples include the city manager or appointed county director in US local government
and the chief executive or head of paid service in UK local government. The rest of the senior management team is
made up of the echelon of appointed officials who report directly to the chief executive. Examples are the department
heads in US local government and the service directors in UK local government. This is the standard approach to
defining the senior management team in prior studies (Carpenter, Geletkanycz, and Sanders 2004).

Boyne et al.

Does Public Service Performance Affect Top Management Turnover?

executive succession and top management team turnover in 67 organizations over a 22-year
period, he finds evidence in accordance with the idea that chief executives shift blame to
their top management teams when performance is weak: ‘‘powerful chief executives buffer
themselves from performance responsibility but ‘compensate’ by replacing top managers’’
(Boeker, 1992, 418). It should be noted that this might be scapegoating but it may also be an
accurate allocation of responsibility.
We are not aware of any prior research on this topic in the public sector, but blame
shifting seems possible here just as in the private sector. Chief executives are more likely
than other senior managers to spend time with their political masters and may develop close
working (and perhaps social) relationships with them. The chief executive may take on the
role of policy adviser and political confidante to the ruling politicians and thereby shape
their perceptions of the organization in his or her favor. If performance problems emerge
then chief executives may allocate responsibility or shift the blame to other senior managers, protecting their own reputation. In this case, chief executives may be largely insulated from the effects of declining or poor performance, whereas their colleagues in the
senior management team are more vulnerable. Our third hypothesis is, therefore
H3 The negative relationship between perceived performance and turnover is weaker for
chief executives than for other members of the senior management team.
MEASURES AND DATA

We test our hypotheses against 4 years of panel data on all 148 English principal local
governments (London boroughs, metropolitan boroughs, unitary authorities, and county
councils). These entities are governed by popularly elected bodies with a Westminster-style
cabinet system of political management. They are multipurpose governments that provide
education, social services, regulatory services (such as land use planning and waste management), libraries, leisure services, housing, and welfare benefits.3 The advantages of
studying these public organizations are that senior management appointments are subject
to uniform statutory and regulatory constraints and that a wide range of consistently reported performance data are available on them, which tend not to available for US local
governments, allowing us to extend existing research on the determinants of local government senior management turnover (for instance, Feiock and Stream 1998).
We now introduce all variables. Summary statistics for them are provided in table 1.
The summary statistics are listed for the common estimation sample that we use in all of our
panel data models, covering the four financial years from 2002–03 through 2005–06.4 We
are constrained to these 4 years because the indicators of performance used by British central government were first reported in December 2002. As we explain below, we also estimate models on a cross-section for the 2003–04 financial year. The estimation sample for
these models is a proper subset of the common estimation sample described in table 1. This
implies that the descriptives for all variables in the cross-sectional models are bounded by
the extremes listed in table 1.

3
County councils do not provide the last two services listed (housing and welfare benefits). They are provided by
a number of district councils within each county.
4
Each financial year runs from April 1 to March 31.

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Table 1
Summary Statistics

Mean
Turnover rate
Chief executive succession (dummy)
Core service performance score
Year-on-year change in core service performance score
CPA grade: fair/two stars (dummy)
CPA grade: good/three stars (dummy)
CPA grade: excellent/four stars (dummy)
CPA same as or worse than last year (dummy)
Satisfaction with the local government (percent very/fairly
satisfied) in 2003
Change in percent satisfaction with the local government
from 2000 to 2003
Whole council election (dummy)
Election by thirds (dummy)
Difference between vote share of two biggest parties in the
last election
Change in political party control (dummy)
Chief executive succession last year (dummy)
Chief executive succession 2 years ago (dummy)
Ability to improve score
Logged population
London borough (dummy)
Metropolitan borough (dummy)

0.19
0.17
70
0.72
0.24
0.42
0.23
0.76
52
27.7

Standard
Deviation

Min

Max

0.20
0.38
8.4
7.1
0.43
0.49
0.42
0.43
8.3

0
0
40
225
0
0
0
0
31

1
1
90
22
1
1
1
1
77

8.1

227

17

0.24
0.13
11

0.43
0.34
8.8

0.11
0.15
0.18
33
5.4
0.22
0.24

0.32
0.36
0.39
6.4
0.27
0.42
0.43

0
0
0.04
0
0
0
15
4.5
0
0

1
1
45
1
1
1
48
6.1
1
1

Note: These summary statistics are for the common estimation sample used by all models in Tables 2 and 4 (431 observations on
148 local governments). The estimation sample of all cross-sectional models in Tables 3 and 5 (141 observations) is a proper subset of
this larger common estimation sample.

Management Turnover

The two dependent variables are (a) the turnover rate of the senior management team
excluding the chief executive and (b) the presence or absence of a chief executive succession. We collected data on the composition of senior management teams from several
sources—identifying the posts on the senior management team in every principal local
government and year and the names of the post holders in every year. We measure the
turnover rate as:
Turnover rate 5

Number of new names on senior management team
:
Number of positions mentioned

In this definition, the denominator is the number of positions on the senior management team in that year.5

5
As a robustness check, we also estimated our models using a slightly different indicator of the turnover rate, where
in addition to new names on the senior management team, vacancies are also included in the numerator. This produces
virtually the same results numerically and changes none of our conclusions. For the sake of clarity, we focus on the
most cut and dried definition of the turnover rate.

Boyne et al.

Does Public Service Performance Affect Top Management Turnover?

Our indicator captures exclusively those senior management successions where the
new person was not already part of the senior management team. The indicator has a mean
of about 0.2, which means that on average a fifth of the senior management team gets
replaced in a given year.
As our second dependent variable, we examine the presence or absence of a chief
executive succession in a local government. We code a chief executive succession in
the first year that a new person occupies the post of chief executive. In our estimation sample, there are 74 chief executive succession events. Out of 431 observations in the sample,
¨
this gives a naıve expected probability that a chief executive succession will occur in any
given council in any given year of slightly less than 0.2. This figure squares with an average
tenure of English local government chief executives of about 5 years that is mentioned in
the practitioner press.6
In our panel data set, variation is made up of two components: variation within the
local governments over time and variation between local governments. The former can be
considered more useful variation for the purpose of causal inference since it does not depend on fixed differences between the local governments, which may be difficult to capture
adequately with control variables. Previous case study work on local governments found
enduring idiosyncratic features of local governments to influence the impact of the CPA
process (Turner and Whiteman 2005). This problem bedevils purely cross-sectional analyses. It turns out that about 62% of the variation in the senior management turnover rate
consists of changes within the local governments over time. Similarly, for the binary variable ‘‘presence or absence of a chief executive succession,’’ about 70% of the variation is
within the local governments over time. All this is fairly encouraging for the robustness of
our inferences against alternative explanations based on time-invariant omitted variables.
Organizational Performance

We operationalize public service performance in three different ways. The first two capture
the British central government’s perceptions of local governments’ performance, as filtered
through the Audit Commission, an independent agency that evaluates the service performance of local governments. The last captures local citizens’ perceptions of performance.
The core service performance score, our first indicator, seeks to tap the objective elements of services (e.g., quantity and quality of output, speed of delivery). It is a weighted
index covering annually collected quantitative output and outcome indicators on education,
social care, environment, housing, benefits, and libraries and leisure as well as efficiency in
the ‘‘management of resources’’ (Andrews et al. 2005, 641). The core service performance
score ranges from 40 to 90, with a mean of 69.5. This measure is important to local politicians because deficiencies on its component indicators, particularly in education, are
highlighted in league tables, can trigger visits by central government inspectors, and
are likely to be publicized in local media. There is a direct incentive to monitor managerial
success in delivering high scores on the indicators going into the core service performance
score.
The CPA, our second indicator, includes not only the core service performance score
but also the Audit Commission’s judgment of local government’s ‘‘ability to improve,’’

6

Compare ‘‘Making a move’’ in The MJ, October 11, 2007.

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Journal of Public Administration Research and Theory

which reflects Audit Commission inspectors’ views of the appropriateness of the management arrangements and plans that are in place. The CPA was a performance evaluation and
incentives program that central government introduced in 2002 and that was conducted
annually until 2008. Most interestingly, the CPA had real teeth: Local governments classified as performing only in the lowest category have seen a temporary tightening of central
government control (Lowndes 2003). Moreover, the CPA classification had special prominence for local politicians and officers because their local government was publicly evaluated in the national and local media using a five-point star rating system, receiving
between zero (for ‘‘poor’’ performance) and four stars (for ‘‘excellent’’ performance).
We create dummy variables for all but the two lowest categories, poor/no star, and
weak/one star, which form our base group.7 It contains about 11% of observations in
our estimation sample. About 24% show fair performance (two stars), 42% show good
performance (three stars), and 23% show excellent performance (four stars). Comparing
the last election before the introduction of the CPA and the election immediately following
it, James and John (2007) show that performing badly on the CPA had adverse consequences for political incumbents’ electoral support, providing them with a strong incentive to
retain managers who can avoid these bad ratings. There had been concerns that the CPA
was not a valid measure of overall local government performance in the sense that it partially rewarded local governments that serve less demanding areas and punished those serv´
ing areas of high deprivation. Both Andrews et al. (2005) and Gutierrez-Romero, Haubrich,
and McLean (2008) find that CPA results are partially influenced by constraints that local
governments have no immediate control over. However, these influences do not invalidate
the measures, and CPA reflected central government perceptions of performance. Local
governments that stood out as by far the worst performers at the introduction of the
CPA made very notable improvements. More broadly, although local governments in areas
of high deprivation face a more challenging task, part of their statutory purpose is to provide
local services and therefore it is reasonable to hold them accountable for this activity using
performance measures.
Finally, local citizens’ perceptions of performance are captured by the estimated percentage of the population stating that they are satisfied overall with the services provided by
their local government. For each local government, this estimate is based on a large random
sample of the adult population residing within the local government’s jurisdiction and is
carried out according to central government quality standards. These ‘‘Best Value’’ satisfaction surveys take place every 3 years. We use the value for the 2003–04 financial year.
On average, only 52% of the population in a local government jurisdiction is content with
the way the organization conducts its business.
We examine performance both absolutely and relative to the past. Even if performance
remains above average, a dip from recent levels is likely to lead to pressures on senior
managers (Farrell and Whidbee, 2003; Puffer and Weintrop, 1991). We therefore include
indicators of performance change.8 For the core service performance score, we include the
difference in performance between this year and last year. For the CPA, we include

7
We group these two categories together because there are only 10 observations with a zero stars rating. Whether or
not these two categories are grouped together does not affect our findings; however, the exposition is clearer when they
are grouped together, as this crisply brings out the contrast between low performance and better-than-low performance.
8
Although our performance data are for the same financial year as the dependent variables, they nevertheless are
temporally prior because they refer to performance in the preceding financial year.

Boyne et al.

Does Public Service Performance Affect Top Management Turnover?

a dummy variable that takes on the value of one if the CPA rating declined by one or more
categories relative to last year or remained unchanged. Otherwise, this variable takes on the
value of zero. For citizens’ perceptions of performance, we include the percentage point
difference between the population satisfied in 2000 and the population satisfied in 2003. On
average, the percentage of the population who are content with their local government has
shrunk, apparently because of the increased performance expectations the CPA created
(James 2009).
Chief Executive Succession as an Explanatory Variable

In order to test hypothesis 2, that chief executive successions tend to lead to replacements of
other senior managers, we include 1- and 2-year lags of chief executive succession as explanatory variables in the models of top team turnover.
Control Variables

Our theoretical argument presents the elected council as the local government analogue of
the board of directors in a private corporation. This implies that there are a set of political
factors that may also influence turnover. First, an election is likely to lead to some new
faces on the local council, even if the incumbent majority party retains control. This churn
in the ruling group may disrupt relationships between politicians and managers. To capture precisely any election-induced differences in turnover, we create dummy variables
for elections where the whole council is elected and for elections where there is an election by thirds. The latter implies that one council seat from each three-seat ward is up for
election. This peculiar type of election takes place exclusively in metropolitan boroughs
and a number of unitary authorities. The absence of an election forms the base group of
observations.
Second, the expected competitiveness of the political environment in a local government could also heighten turnover. A more competitive environment implies closer monitoring of management by the ruling party. Our indicator of perceived competitiveness of
the next election is the percentage point difference between the vote share of the party with
the largest number of votes and the party with the second-largest number of votes at the last
election.
Finally, if a change in political party control takes place, a new set of political
leaders may regard the incumbent officers as too closely associated with the previous
regime, and unlikely to support new policies, or they may value the symbolic effects of
appointing a new chief executive or entire senior management team. McCabe et al.
(2008) show that turnover of council members in US municipalities is associated with
higher managerial turnover. We consequently include a dummy for a change in political
control of the council, including changes to or from a situation where no political party
holds an overall majority.
Perceived management capacity could be linked to senior management turnover.
Where it is relatively low, councils will be more likely to replace senior managers. As
a proxy for senior management capacity, we include the CPA ‘‘ability to improve’’ score
for 2002–03. It captures the domains of financial management, information technology
management, capital management, and managing for results and thus most of the elements
of management capacity identified by Ingraham, Joyce, and Donahue (2003). This measure

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is included only in our cross-sectional citizen satisfaction models (tables 3 and 5) because it
was only assessed comprehensively for all councils in 2002.
Larger organizations may have a higher likelihood of leadership turnover because
a bigger pool of potential replacements for the top leadership posts is readily available
(Fredrickson, Hambrick, and Baumrin 1988, 258). As a proxy for the size of the organization, we include the size of the population living within the jurisdiction, drawing on the
2001 census. We use the natural log of this variable because of the very large values it takes
on for a number of local governments.
Finally, the location of the local government may be important. Levels of turnover
may be higher in London and metropolitan authorities because there are many other
neighboring local governments that could be an alternative source of employment
for senior managers without requiring a household move, thus easing exit and replacement. We therefore include dummies for London and metropolitan boroughs as these are
the major population centers of the country and are marked by a greater choice of occupational alternatives that are within commuting distance for local government senior
managers.
METHODS

Our types of dependent variable differ: the senior management turnover rate in a given year
is continuous, whereas the presence or absence of a chief executive succession in a given
year is dichotomous. We use linear random effects models to estimate the specifications
explaining the senior management turnover rate and a logit estimator for the specifications
explaining chief executive succession. In both cases, we resort to Huber-White standard
errors that correct for clustering on each of the 148 local governments.
We have up to four observations on each of the 148 different local governments
(from financial year 2002–03 up to and including financial year 2005–06), so we can
exploit one of the major advantages of panel data: testing for the presence of omitted
time-invariant factors that may bias our results. For this purpose, we use Hausman tests
that statistically compare the results from a model that controls for all time-invariant
differences between local governments (a fixed effects model) to the results from a model
that assumes that there are no omitted time-invariant differences that affect the results
(a random effects model). If the results from the two models do not differ statistically, it
is defensible to use the random-effects model. It has two advantages. First, it allows the
researcher to make statements about time-invariant explanatory variables that are swept
out of fixed effects models. Second, it is more efficient—it can better discern existing but
noisy relationships.
The Hausman tests indicate that all of our models produce statistically the same
results whether they are estimated by fixed or random effects. Finally, for all linear
panel data models we carry out the test for serial correlation suggested by Wooldridge
(2002) and implemented by Drukker (2003). Fortunately, this test indicates that none is
present.
FINDINGS

Our findings are reported in tables 2–5. We discuss them in the order of our hypotheses.

Boyne et al.

Does Public Service Performance Affect Top Management Turnover?

Table 2
Panel Linear Regression Models (Random Effects) Explaining the Senior Management Turnover Rate

Model 2.1
Core service performance score
Year-on-year change in service performance score
CPA grade: fair/two stars (dummy)
CPA grade: good/three stars (dummy)
CPA grade: excellent/four stars (dummy)
CPA same as or worse than last year (dummy)
Whole council election (dummy)
Election by thirds (dummy)
Difference between vote share of two biggest parties
in the last election
Change in political party control (dummy)
Chief executive succession last year (dummy)
Chief executive succession 2 years ago (dummy)
Logged population
London borough (dummy)
Metropolitan borough (dummy)
Year dummy for 2004
Year dummy for 2005
Constant
Wald chi-square test of H0: ‘‘The model explains nothing’’

Model 2.2

20.003 (3.04)**
0.000 (0.21)

0.036 (1.33)
0.020 (0.53)
20.001 (1.23)

20.142
20.081
20.141
20.015
0.038
0.017
20.001

20.004 (0.13)
0.075 (2.59)**
0.062 (2.11)*
0.019 (0.43)
0.059 (2.42)*
20.000 (0.01)
20.051 (2.18)*
0.027 (0.97)
0.282 (1.09)
p , .0001**

20.012 (0.37)
0.074 (2.57)*
0.062 (2.06)*
0.027 (0.62)
0.052 (2.17)*
20.003 (0.12)
20.058 (2.62)**
0.036 (1.35)
0.136 (0.56)
p , .0001**

(4.30)**
(2.55)*
(4.74)**
(0.67)
(1.41)
(0.50)
(1.11)

Note: Both models estimated over the same 431 observations on 148 local governments. The absolute values of Huber-White t-statistics
(adjusted for clustering on local government) are provided in parentheses. *, indicates a p value of .05 or less; **, indicates a p value of
.01 or less.

Hypothesis 1 suggests that perceived organizational performance is negatively related
to senior management turnover. Overall, our results for the central government assessments
of performance (the core service performance score and the CPA) bear this out.9
As the first model in table 2 shows, there is a relationship between performance (at
least the central government’s perceptions of it) and the senior management turnover rate.
The mean senior management team turnover rate is about 0.2% or 20% (a fifth of the senior
management team leaves each year on average) and the median size of the senior management team excluding the chief executive is six. As the first model in table 2 shows,
a 10-point decrease in the core service performance score increases the senior management
team turnover rate by three percentage points. All else equal, this would only increase the
mean senior management team turnover rate to 23%, which would translate into a replacement of an additional manager only in teams greater than 15 (using the convention that
a probability of replacement greater than 1/2 predicts the occurrence of a replacement).
Consequently, the effect of the core service performance score on the senior management

9
Although we find evidence of a linear relationship, we also examined whether the relationship might be non-linear.
It is conceivable that turnover might be higher at the top and bottom ends of performance than where performance is
mediocre. We tested this by including a squared term of performance in all models using the service performance score
and overall citizen satisfaction. In none of these models could the null hypothesis of no non-linear relationship be
rejected.

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Table 3
Cross-Sectional Linear Regression Model Explaining the Senior Management Turnover Rate Based on
Local Citizens’ Satisfaction

Satisfaction with the local government (percent very/fairly satisfied) in 2003
Change in per cent satisfaction with the local government from 2000 to 2003
Whole council election (dummy)
Election by thirds (dummy)
Difference between vote share of two biggest parties in the last election
Change in political party control (dummy)
Ability to improve score
Chief executive succession last year (dummy)
Chief executive succession 2 years ago (dummy)
Logged population
London borough (dummy)
Metropolitan borough (dummy)
Constant
General F test of H0: ‘‘The model explains nothing’’
R2

0.002 (1.12)
20.005 (2.03)*
0.015 (0.20)
0.027 (0.33)
20.003 (1.77)
20.008 (0.14)
20.006 (2.14)*
0.092 (1.76)
0.051 (1.24)
0.048 (0.48)
0.067 (1.20)
20.043 (0.59)
20.028 (0.05)
p 5 .003**
0.15

Note: Estimated over a cross-section of 141 local governments. The absolute values of Huber-White t-statistics are provided in
parentheses. *, indicates a p value of .05 or less; **, indicates a p value of .01 or less.

team turnover rate is more statistically than substantively significant, except for half a dozen
local governments with the very largest senior management teams.
On the other hand, the relationship between the CPA and the senior management team
turnover rate (in the second model in table 2) is not only statistically but also substantively
significant. Any of the three highest categories of the CPA predict a lower rate of turnover
than the base group (low performance). On average, compared to the base group, councilyears with a CPA of two stars have a 14 percentage point lower rate of turnover; councilyears with a CPA of three stars have an 8 percentage point lower rate of turnover; and
council-years with a CPA of four stars have a 14 percentage point lower rate of turnover.10
The interpretation of these findings is that on average, one additional senior manager will
depart if a local government only achieves one star or zero stars on the CPA as opposed to
two stars. Note that on average, there is no relationship between stagnation or worsening of
the CPA and senior management team turnover. This implies that increases in the CPA do
not lead to decreases in senior management team turnover and underlines that the relationship between the CPA and senior management turnover that we observe is driven by the
contrast between poor performance on the one hand and at least mediocre performance on
the other hand.
The results in table 3 suggest that there is a less clear impact of the level of citizen
satisfaction on turnover. Changes in local citizens’ satisfaction with their local government’s service provision show a negative relationship with the senior management turnover
rate: local governments that saw a 10 percentage point reduction in citizen satisfaction (not
an uncommon occurrence, as table 1 shows) on average had a five percentage point higher
senior management turnover rate. Thus senior management team turnover appears to be

10
These reductions in turnover compared to the base group are not statistically identical: a joint test of the restriction
that the coefficients on the three higher CPA category dummies are equal is rejected (p 5 .02). This is because the
reduction in turnover is somewhat smaller for councils with three stars than for those with two or four stars. The
reduction in turnover is identical for the latter: the hypothesis that the coefficients on the dummies for two stars and four
stars are equal cannot be rejected (p 5 .99).

Boyne et al.

Does Public Service Performance Affect Top Management Turnover?

Table 4
Panel Logit Models Explaining the Presence or Absence of a Chief Executive Succession

Model 4.1
Marginal Effects
Logit
(Baseline Predicted
Coefficients
Probability 5 .157)
Core service
performance
score
Year-on-year change
in service
performance score
CPA grade: fair/two
stars (dummy)
CPA grade: good/three
stars (dummy)
CPA grade: excellent/
four stars
(dummy)
CPA same as or
worse than last
year (dummy)
Whole council
election (dummy)
Election by thirds
(dummy)
Difference between
vote share of
two biggest
parties in the last
election
Change in political
party control
(dummy)
Logged population
London borough
(dummy)
Metropolitan borough
(dummy)
Year dummy for 2004
Year dummy for 2005
Constant
Wald chi-square
test of H0:
‘‘The model
explains nothing’’

20.041 (2.34)*

0.017 (0.77)

Model 4.2
Marginal Effects
Logits
(Baseline Predicted
Coefficients
Probability 5 .150)

20.005 (2.37)

0.002 (0.77)

20.418 (1.20)

20.049 (1.31)

21.061 (2.87)**

20.129 (3.05)

21.070 (2.56)*

20.113 (3.18)

20.833 (2.92)**

20.123 (2.66)

0.157 (0.42)

0.021 (0.41)

0.228 (0.60)

0.030 (0.58)

0.128 (0.24)

0.017 (0.23)

0.171 (0.31)

0.023 (0.30)

0.022 (1.70)

0.003 (1.74)

0.026 (1.93)

0.003 (1.99)

–0.106 (0.22)

20.014 (0.23)

20.259 (0.54)

20.031 (0.58)

0.058 (0.14)
–0.569 (1.58)

0.008 (0.14)
20.068 (1.80)

0.286 (0.66)
20.703 (1.99)*

0.036 (0.66)
20.078 (2.34)

20.547 (1.46)

20.066 (1.66)

20.778 (2.12)*

20.086 (2.59)

20.514 (1.28)
0.446 (1.21)
0.808 (0.30)
p 5 .04*

20.064 (1.35)
0.062 (1.17)

20.708 (1.67)
0.484 (1.34)
21.775 (0.70)
p 5 .003**

20.084 (1.82)
0.065 (1.28)

Note: Both models estimated over the same 431 observations on 148 local governments. For each model, the results are presented in two
columns. The left-hand side column shows the raw coefficient estimates while the right-hand side column shows the marginal effects.
Absolute values of Huber-White z-statistics (adjusted for clustering on local government) are provided in parentheses. *, indicates
a p value of .05 or less; **, indicates a p value of .01 or less.

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Table 5
Cross-Sectional Logit Model Explaining the Presence or Absence of a Chief Executive Succession

Marginal Effects
Baseline Predicted
probability 5.158

Logit Coefficients
Satisfaction with the local government
(percent very/fairly satisfied) in 2003
Change in percent satisfaction with the local
government from 2000 to 2003
Whole council election (dummy)
Election by thirds (dummy)
Difference between vote share of two biggest
parties in the last election
Change in political party control (dummy)
Ability to improve score
Logged population
London borough (dummy)
Metropolitan borough (dummy)
Constant
Wald chi-square test of H0:
‘‘The model explains nothing’’

0.058 (1.58)

0.008 (1.76)

20.079 (1.65)

20.011 (1.81)

20.125 (0.13)
0.525 (0.58)
20.033 (1.31)

20.016 (0.13)
0.074 (0.54)
20.004 (1.33)

20.345
0.001
20.520
20.020
21.609
21.807

20.042
0.0002
20.069
20.003
20.164

(0.45)
(0.03)
(0.46)
(0.02)
(1.61)
(0.28)

(0.49)
(0.03)
(0.46)
(0.02)
(2.12)

p 5 .49

Note: Estimated over a cross-section of 141 local governments. The results are presented in two columns. The left-hand side column
shows the raw coefficient estimates while the right-hand side column shows the marginal effects. The absolute values of Huber-White zstatistics are provided in parentheses. *, indicates a p value of .05 or less; **, indicates a p value of .01 or less.

more closely connected to central than local perceptions of service performance, which
may reflect the high level of centralization in England.11
Hypothesis 2 suggests that chief executive successions will be followed by increases
in senior management team turnover. There is quite a bit of evidence for this in our data: in
table 2, a chief executive succession last year is related to a seven percentage point higher
turnover rate this year, and a chief executive succession 2 years ago is related to a six
percentage point higher senior management turnover rate.12 In the cross-sectional model
using citizen satisfaction as the indicator of performance (reported in table 3), a chief executive succession in financial year 2002–03 is related to a nine percentage point higher
turnover rate in 2003–04, though this finding is only weakly statistically significant
(p 5 .08). Thus new chief executives appear to alter the composition of their senior management team. Such top-team shaping has been recognized as an important effect of new
chief executives in the private sector (Klimoski and Kiechel Koles, 2001). In English local
government, it tends to occur through reorganization of service departments, in part to circumvent job protections. Senior managers would not normally be easily dismissible by

11
It is also conceivable that the weakness of these findings is explained by the lack of clarity of responsibility in the
rural counties, where some of the services are provided not by the county council but by a number of district councils.
We tested this possibility by re-estimating the models in Tables 3 and 5 excluding the counties. The results in Table 3
are virtually unchanged, and in Table 5 the standard error on satisfaction slightly shrinks. The substantive conclusions
from both tables remain unchanged.
12
We examined whether the relationship between lagged chief executive succession and senior management
turnover is moderated by performance but there is no evidence of this in any model. Nor does chief executive
succession, be it in the same year as the senior management turnover, in the year before, or in either year moderate the
relationship between performance and the senior management turnover rate.

Boyne et al.

Does Public Service Performance Affect Top Management Turnover?

a chief executive. Yet when their remits no longer exist because the chief executive has
created new departments by merging or splitting existing ones, the posts of director of
the new departments can be advertised and the existing director will just be one applicant
among others. In field research conducted as part of the grant that this article stems from, we
found a recently arrived chief executive to be doing exactly this. They were up-front about it
and stated that they would prefer not to re-hire some of the existing service directors.
We now proceed to test hypothesis 3. Recall our finding that the CPA has a substantively important effect on the senior management turnover rate—on average, one additional
senior manager will depart if a local government only achieves one star on the CPA as
opposed to two stars. Is there a similar finding for chief executives?
At first glance, there is a statistically significant effect of the core service performance
score and the highest categories of the CPA on the likelihood of a chief executive succession, but no significant effect of citizen satisfaction—the latter model performs no better
than a constant-only model, as the overall Wald test at the bottom of table 5 shows. For
citizen satisfaction, then, hypothesis 3 is corroborated. The two indicators of central government perceptions of performance are statistically related to both the senior management
turnover rate and the likelihood of a chief executive succession (though only the CPA has
a substantive effect on the turnover rate). For hypothesis 3 to be corroborated here, neither
the core service performance score nor the CPA must have any substantive effect on the
probability of a chief executive succession. To evaluate whether this is the case, we obtained predicted probabilities of a chief executive succession, holding all variables at their
means. Now, the predicted probability of a chief executive succession is about 0.15 in both
models in table 4. A substantively significant effect of either indicator of performance
would move this probability above 0.5, producing a greater than even chance of a chief
executive succession. Model 4.1 shows that the impact of a 10-percentage point decrease of
the core service performance score on the probability of a chief executive succession is only
0.05; in other words, the probability of a chief executive succession increases by five percentage points but is still only 0.2% or 20%. This lack of a substantively significant effect of
the core service performance score on the probability of a chief executive succession parallels the finding for the senior management turnover rate. Thus, the extent of support for
hypothesis 3 depends on the results for the CPA.
As model 4.2 (the second model in table 4) shows, the hypothesis passes the litmus
test: whereas three or four stars on the CPA as opposed to zero or one star predict a lower
probability of a chief executive succession statistically,13 substantively the probability of
a chief executive succession in case of a zero or one star rating as opposed to a three or four
star rating increases only to about 0.25 or 25 percent. Thus, it is still three times more likely
for the chief executive to stay than to go in this circumstance, while one of the senior managers is expected to depart.14
In conclusion, hypothesis 3, which predicts that any negative relationship between
performance and turnover would be weaker for chief executives than for other members
of the senior management team, is corroborated in our study. This is unfortunate news for

The two categories are statistically identical.
Note that the predicted probability of a chief executive succession decreases by 0.12 in council-years that
maintained their CPA rating or got worse. Although one interpretation of this finding is that it may be more difficult to
attract new chief executives to such local governments, we would not wish to attach too much weight to a single
unexpected relationship.

13
14

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those who think that ‘‘a fish rots from the head,’’ as the Russian proverb goes. From our
findings, it appears that when it smells rotten, a gill is removed first, not the head.
Few of our control variables show any statistical relationship with the senior management team turnover rate, and none do so in our chief executive succession models.15
Changes in political control are overall statistically unrelated to both dependent variables.
Partly this is because these effects are weak overall, and partly this has to do with the nature
of the data set used for this article, which covers both years with elections and years without
elections. When a test for the effect of a change in political control on the senior management team turnover rate is conducted for only those observations when an election was
held, a relationship does emerge (Boyne et al. 2010). Management capacity, as measured
by the ability to improve score, shows a negative relationship with the senior management
turnover rate in the cross-sectional model in table 3, where a one point greater ability to
improve is related to a sixth of a percentage point lower rate of senior management turnover. The tenure of senior officials is, therefore, more secure in local governments that are
judged by external inspectors as having appropriate structures and processes, regardless of
citizen evaluations of performance. The Audit Commission inspectors appear to bestow
legitimacy on senior management teams, protecting them from the repercussions of performance problems. Finally, there is some evidence that London boroughs tend to have
a higher rate of turnover than local governments in the more rural parts of the country.
The models in table 2 suggest that London boroughs tend to have a five percentage points
higher rate of turnover than shire counties and unitary authorities. This may partly reflect
the extra pressures on managers in the capital, or it may stem from a more plentiful supply
of potential senior managers in this metropolis covered by 32 separate jurisdictions and
a host of other public sector employers.
CONCLUSIONS

We have provided evidence for a connection between public service performance and the
rate of turnover of appointed senior officials. Central government’s perceptions of performance, and to some extent also local citizens’ satisfaction with services, predict the rate of
senior management turnover in English local governments. As we expected, lower perceptions of performance are associated with a higher rate of senior management turnover.
On the other hand, there appears to be a weaker relationship between organizational
15
One possible concern about our findings is that there might be other reasons for senior managers to move on than
the ones we test or control for here. In particular, senior management turnover might be higher in a local government
when one or more senior managers: (a) hit retirement age or (b) move to another employer simply because the
conditions there are better. The first concern might exaggerate our findings if local governments that experience low
performance also tend to have a higher rate of senior managers reaching retirement age than other local governments.
Unfortunately for our research, age is private information and, as such, protected under the UK’s Data Protection Act
1998. This information cannot be reliably obtained for all senior management teams while complying with the law. Yet
it is very unlikely that age works to exaggerate our findings. If the senior management age structure varies between
authorities but remains constant within authorities over the four years of our study, we know that, based on the
Hausman test discussed above, this variable does not affect our results because they are statistically identical to those
from a fixed effects model, which completely eliminates all time-invariant differences between authorities. If the
age structure within local authorities varies over time, it is most likely to do so in a way that is not directly correlated
with organizational performance. Therefore, any bias induced by such correlation would make it less likely that we still
find a relationship between a change in service performance and the senior management turnover rate. The same
reasoning applies to the possibility that senior managers move to another local authority simply because the conditions
there are better, without any pressure from their old employer.

Boyne et al.

Does Public Service Performance Affect Top Management Turnover?

performance and chief executive succession. This is consistent with arguments that chief
executives deflect blame or attribute responsibility for poor results to their senior management teams who, like their private sector counterparts, are vulnerable to scapegoating. Our
results show that new chief executives also have a direct effect on top team composition:
the rate of senior management turnover tends to be higher in the wake of their arrival at the
top of the organization.
These results suggest that the tenure of senior managers in the public sector is partly
contingent on organizational performance. Senior managers are more likely to remain in
post when performance is perceived to be high, and more likely to depart when performance is perceived to be poor. Public managers are not insulated from performance,
but are at least loosely accountable, either through forced or voluntary resignation, when
public services are deemed to be unsatisfactory. The evidence implies that senior public
officials have an incentive to achieve good public service results because this will make it
easier for them to retain their current positions and make them more attractive to alternative
employers. Similarly, they have an incentive to avoid poor results. This incentive is, however, sharpest not for the very top manager in our sample of organizations but for the other
members of the senior management team. Our finding of a difference between the performance effect for chief executives and other senior managers also makes it unlikely that an
alternative explanation drives these results, namely, that better-performing organizations
are also better at retaining high-quality managers.
All three of our performance indicators (the core service performance score, the Comprehensive Performance Assessment, and the citizen satisfaction percentage) are summary
measures, covering perceptions of organizational performance as a whole. Consequently,
they guard against the threat that our finding would be specific to only one or a few very
dimensions of performance. Nevertheless, the relationship between performance and turnover clearly needs to be investigated in a variety of contexts before general conclusions can
be drawn. It seems plausible that the strength of this relationship may depend on factors that
vary across national and institutional settings, such as the clarity of performance information, the nature of employment contracts, the constitutional arrangements between elected
politicians and appointed officials, and the impact of public service standards on electoral
support for ruling parties. Another contingency might be the overall economic situation.
We speculate that tight budgets weaken the relationships observed in our study, which
covers a period of growing public-sector budgets. Austerity is likely to affect the ability
of public organizations to both let go of current senior managers, which tends to require
costly severance packages, and to hire new ones, which tends to require both substantial
recruitment costs, and, more often than not, a substantial pay increase relative to the previous post holder.
FUNDING

We thank the Economic and Social Research Council Public Services Programme (RES166-25-0026).
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