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Is there any theory of designing government departments so they are automatically incentivized to maximize ratings in certain metrics, including satisfaction by people receiving those services (like education or welfare or healthcare)?
I mean like a specific theory of organization by which some system is automatically getting feedback and so it becomes clearly evident when it’s not serving its intended purpose.
One example (more details at the link):
Twenty years ago, nearly all civil servants in the central government of OECD member countries were paid according to service-incremental salary scales. This is not to say that civil servants previously lacked performance incentives. Promotions, and especially those into senior management, were rigorously controlled, serving partly as an incentive but partly also as a way of ensuring the independence of the public service with regard to the executive and thus its ability to serve governments of different political persuasions. However, socio-economic pressures have led to the need for types of incentives other than “promotion” to strengthen performance management. Remuneration has been seen as an alternative or a complementary incentive to promotion.
By the turn of the millennium, significant numbers of civil servants were covered by performance related pay (PRP) schemes of one kind or another in most OECD member countries, particularly senior managers, but increasingly also non-managerial employees. The introduction of performance pay policies occurred in the context of the economic and budgetary difficulties faced by OECD member countries from the mid-1970s. Reasons for introducing PRP are multiple, but focus essentially on improving the individual motivation and accountability of civil servants as a way to improve performance. PRP is seen as a signal of change for civil servants and as a way of indicating to citizens that performance is regularly assessed in public administration.
The details of how this works in the civil service of the EU is described here.
I would call it a management practice, rather than a "theory of organizational design" but this seems to be the kind of thing that the OP is looking for in the question.
political-theorytag and I think this is on-topic here. You could also ask a different but related question in Project Management SE.