Public Performance Measurement and Management: From Theory to Practice

1. Public Performance Measurement and Management: From Theory to Practice Patricia de Lancer Julnes, Ph.D. University of Baltimore Marc Holzer, Ph.D. Rutgers University, Newark Robert Shick, Ph.D. Rutgers University, Newark International Conference for Administrative Development: Towards Excellence in Public Performance Riyadh, Saudi Arabia November, 2009

2. Review of Performance Movement in United States • Evolution of performance movement • Model of performance process • Performance measurement • Performance-based budgeting • Performance-based management • Approaches to developing a performance system • Challenge to implementing an effective performance system

3. Uses of Performance Measurement and Management in the Public Sector • Demonstrate accountability to citizens, elected officials, and other interested parties by reporting the services efforts and accomplishments associated with a government’s programs and activities • Improve the resource allocation process by using performance information to inform the development and enactment of a government’s budget • Assure the achievement of desired results by using performance information to monitor the delivery of services, and make adjustments, if necessary, in the service delivery

4. Introduction Century long effort to define and apply metrics to government services Driven by management and budget initiatives, PPBS, MBO, TQM, and productivity Performance measurement broadly defined as ongoing collection of data on program activities and accomplishments Indicators include: inputs, outputs, and outcomes Indicators of efficiency, cost-effectiveness, or productivity, ratios of outputs to inputs Outcomes divided into intermediate outcomes and end-outcomes Information used for program related decision-making

5. Evolution of Performance Movement • New York City, Bureau of Municipal Research, 1906 • Brookings Institution predecessor, Institute for Government Research, whether focus of government should be efficiency, early 1900’s • Taft Commission 1913, Brownlow Committee, 1st Hoover Commission, Second Hoover Commission • Nixon National Commission on Productivity, 1970 • Carter Quality of Working Life 1977 • Clinton National Performance Review 1993 • Government Performance and Results Act 1993

6. Public Sector Performance Process Model

7. Examples

8. PM Indicators • Resources dedicated to or consumed • by a program. • funds • staff/staff time • equipment • supplies • facilities Inputs Activities Outputs • Direct products of program activities, • usually measured in terms of volume or • work accomplished. • # permits issued • # brochures mailed • # residents served • # immunizations

9. PM Indicators Efficiency Measures: Inputs used per unit of output Inputs Activities Outputs

10. PM Indicators Service Quality Inputs Activities Outputs Outcomes Efficiency

11. PM Indicators • Service Quality: • Degree to which citizens are satisfied with a program, or how accurately or timely a service is provided • - Percent of respondents satisfied with a service • - Frequency of repeat repairs • - Average days to address a facility work order

12. PM Indicators Outcomes - Why are we providing this service? - Reduction in fire deaths/injuries - Increased feelings of neighborhood pride - Reduced exposure to safety hazards

13. A good PM system is… • Results-Oriented • Reliable • Useful • Quantitative • Realistic • Cost-effective • Easy to Interpret • Comparable • Credible

14. Performance Measurement • Holzer (1977) – demands for improved performance and government accountability have been continually present in the public sector • Ammons and King (1983) – demands for performance improvement often took a backseat to other pressing government concerns • Wholey and Hatry (1992) – explained that the value of performance monitoring rests on the information that it provides

15. Performance-Based Budgeting • Results budgeting or outcomes budgeting • GAO (2001), Melkers and Willoughby (1997), Joyce (1993), and Grizzle and Pettijohn (2002), Smith (1999), Miller and Robbins (2004), Ngoyi, Miller, and Holzer (2007), and Barnett and Attberry (2007) • Encouraging • Results budgeting has great potential to improve resource allocation decisions • Found performance planning a catalyst for setting goals, objectives, and outcome measures • Performance budgeting has promise to be a truly revolutionary movement • Performance budgets increasingly required by state legislation and include: strategic plan, annual performance plan, annual program performance report, and program evaluation • Budgeting for outcomes hold exceptional promise, and cite steps in budget process including setting measures of annual progress, monitoring, and closing the feedback loop

16. Performance-Based BudgetingConcerns • Performance budgeting may be more vulnerable to fraud, falsification, and misrepresentation and shares problems of strategic planning of oversimplification and parochialism, but concedes it has greater philosophical soundness than other budget systems • Performance budgeting should be approached cautiously, difficult to agree on objectives and most successful projects focused on activities not results

17. Performance-Based Management • The purposeful use of resources and information to achieve and demonstrate measurable progress toward agency and program goals • Wholey (1999), Berry and Wechsler (1995), Roberts (2002), Romzek and Dubnick (2008), Franklin (2000), and Ammons and King (1983) • Encouraging • Viewed as a way to respond to citizen demands for accountability and productivity • Report 80% of government manager respondents thought strategic planning important for setting goals, guiding policy, and making budget decisions • Managers seem to recognize importance of planning and outcomes, but questions what it will take for performance-based management with the required planning and measurement to take hold in public organizations

18. Performance-Based ManagementConcerns • New wave of accountability will fail to achieve intended results as current reform neglects agency and personal responsibility and accountability and is deemed as a process of dialogue • Report of chief local administrators show respondents understand the meaning of performance measurement and management, the top priority concerns they identified were fiscal crisis, capital improvements, and economic development

19. Performance Used in Federal, State, and Local Government • Kravchuk and Shack (1996), Berman and Wang (2000), Poister and Streib (1999), and de Lancer Julnes and Holzer (2001) • Federal level - cautions that formal approaches like GPRA can come at the expense of rational hands-on management and performance measures may misinform if users are not aware of subtle limitations of performance systems • County level - effectiveness of performance measurement contingent on underlying organizational, political, and technical capacities • Local level - growing impetus for performance measurement, but rhetoric has outpaced reality, and limited by the extent of commitment to performance measurement has taken hold • Two stage process – adopting performance measures and implementation

20. Seven-Step Performance Measurement and Use Methodology • Step 1. Identification of the Programs to Measure • Step 2. Statement of Purpose • Step 3. Identification of Program Inputs, Outputs, Efficiency and Productivity Indicators • Step 4. Setting Targets for Accomplishment • Step 5. Monitoring • Step 6. Performance Reporting • Step 7. Analysis and Action

21. Step 1. Identification of the Programs to Measure • Programs are groupings of routine activities aimed at providing support for a certain service • Example, the following four activities--street resurfacing; street patching; seal coating; and curb repairing--are activities that constitute the program that is usually called street maintenance • Clearly identify and divide activities into distinct programs

22. Step 2. Statement of Purpose • One can measure the performance of a program only if he or she knows what the program should accomplish • Clearly articulate a statement of purpose for a program • a clear mission statement is a good place to start

23. Step 3. Identification of Program Inputs, Outputs, Efficiency and Productivity Indicators • Input Indicators – Designed "to report the amount of resources, either financial or other (especially personnel), that have been used for a specific service or program. Input indicators are ordinarily presented in budget submissions and sometimes external management reports.“ GASB • Output/Workload Indicators - Report units produced or services provided by a program. Workload measures indicate the amount of work performed or the amount of services received. • Outcome/Effectiveness Indicators - Report the results (including quality) of the service. These measures answer the question How well the organization is meeting its goals. • Efficiency Indicators- Reportwhether the desirable ends are achieved with minimal input of resources, or that the resources we employ bring the maximum amount of desirable goal attainment. Efficiency refers to the ratio of the quantity of the service provided to the cost, in dollars or labor, required to produce the service. • Productivity Indicators - Combine the dimensions of efficiency and effectiveness in a single indicator. The costs (or labor-hours) of faulty meter repairs as well as the costs of effective repairs are included in the numerator of such a calculation, but only good repairs are counted in the denominator--thereby encouraging efficiency and effectiveness of and by meter repair personnel. (Ammons, 1996)

24. Step 4. Setting Targets for Accomplishment • Express the goals of a program through date (or period of time) and quantities (including percentages) • Identify service effectiveness and quality, and explicitly state how we are going to check whether our objectives have been met

25. Step 5. Monitoring • Monitoring provides the user with the results needed to decide whether or not the target is accomplished or not • Each accomplishment target should be monitored on a continuous basis • Systematic monitoring gives the manager an opportunity to keep tabs on the operation of the program, and take corrective action if requested during the program

26. Step 6. Performance Reporting • Performance reports should be an accessible and convenient format including the following: • Program name, organizational jurisdiction, and statement of purpose • Workloads/outputs, inputs, productivity and/or efficiency ratios • Targets for accomplishment for crucial indicators, most notably, effectiveness and efficiency • Brief synopses of additional explanatory information

27. Prince William County, WashingtonDepartment: Community Improvement

28. Step 7. Analysis and Action • A well-developed Performance Measurement System enables users to identify weaknesses and threats, as well as strengths and opportunities • Gives users the opportunity to diagnose organizational growth capabilities and take relevant actions

29. First Order Components in a Performance System • Chief Executive commitment and involvement • Relevant measures of at least outputs and eventually outcomes • Periodic review and revision of the performance measures • Regular collection of performance data • Comparison of performance data to prior periods • Regular review and analysis of performance results • Chief Executive and other senior management involvement in the reviews and analysis • Agreement between Chief Executive and department managers on improvement plans • Follow-up on achievement of improvement plans

30. Second Order Components in a Performance System • Targets for performance measures • Comparison of performance data to targets • Comparison of performance data to similar jurisdictions • Support staff involvement in the reviews and analysis of performance results • Budget reviews and deliberations that consider the performance targets and results • Budget resources allocated to programs rather than solely to object classes • Programs for obtaining constituents’ views • Existence of some process for assuring the data’s reliability • Regular dissemination of performance results

31. Third Order Components in a Performance System • Strategic plan for the jurisdiction or departments • Legislative branch involvement in the process • External stakeholder involvement in the process • Cost accounting system and cost of services • Personnel evaluations, promotions, and compensation adjustments that consider program performance • Involvement of non-government organizations in the process

32. Challenge • Insure that the performance measurement and management system is credible, relevant, and useful to the delivery of public sector services through a continued and sustained emphasis by the Chief Executive and Department heads, and to the extent possible, institutionalize the system so it will continue in future administrations