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Weekly UpdatesTwo clear trends emerged from a recently completed Government Finance Officers Association (GFOA) research project on current practices in performance measurement and management (1) in North American local governments. First, more governments are practicing these techniques, and many more stakeholders are involved than ever before. In fact, whether it is done well or is merely a token effort, performance measurement--although not necessarily performance management--is now an expected part of a manager's job in most local governments. Second, rather than simply creating a set of measures and reporting them, state and local governments are increasingly using measurement to manage performance. The change from simply measuring to using measures to manage corresponds to a shift from using performance measures largely for accountability purposes to using measures for learning and improvement--a key concept in performance management practice.
Early efforts in performance measurement focused on types of measures, how to measure and what to measure, and on how to present information. As the practice of performance measurement among governments spread, many jurisdictions developed sets of measures--typically by department--and began including them in their budgets. Although some governments created excellent processes, in many cases the measures were static, not closely related to spending, and rarely used to manage, improve services, or make decisions. Until relatively recently, this described the state of the art of performance measurement and management in North America.
The GFOA has conducted research and offered training and informational resources on performance measurement and management practices for two decades. (2) In 2004, the GFOA conducted research into its members' resource needs and emerging practices in the field of performance measurement. A key conclusion was that governments needed access to information that went beyond the basic concepts of measurement. (3) Respondents to a survey that was part of the study identified leadership and strategic planning as the main issues in successful performance measurement efforts. Leadership was seen as an essential component of initiating and sustaining a performance measurement process. Several respondents noted that unless measures are tied to strategic planning, performance measurement is likely to be useless. After strategic planning and leadership, the next most important factor identified by survey respondents was the need for integrating performance management into management processes. Respondents viewed this integration as crucial. As one respondent noted, "Integration of performance measurement into the way the organization does its work is essential. Until this is recognized, performance measurement efforts are 'something extra' and subject to competition with the 'real' work of the organization." The GFOA's State and Local Government Performance Measurement Sourcebook project was an outgrowth of the needs assessment. Sourcebook research methodology is described below.
BROADER USE AND BROADER INVOLVEMENT
An increasing number of governments are using performance measurement and management practices, and performance measurement and management initiatives have broader stakeholder involvement than in the past. In the 2006 electronic survey conducted by the GFOA, 60 percent of jurisdictions reported using performance measurement, and follow-up surveys and interviews found that 40 percent had an organization-wide program or initiative. The steady growth in the number of GFOA members receiving special recognition for performance measurement in the GFOA Distinguished Budget Presentation Award program also reflects the growing use of performance measurement for management purposes. The number of governments receiving this special performance measures recognition grew from three in 2001, the first year the award was given, to 21 in 2006.
Typical performance measurement efforts in the past were coordinated by a central organization (the budget office or a small performance measurement office within the city manager's office, for example). That office would create all measures or assist departments to do so, and periodically issue reports. Such processes often only indirectly involved departments, and departments frequently did not pay attention to the measures except when asked to include them in the budget. When measures were reported, information was noted by those citizens who were sufficiently self-motivated to access and read printed reports.
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Performance management initiatives, on the other hand, necessarily
lead to broader involvement. Within the organization, an increasing number of departments and employees in those departments typically become involved, as measures begin to be used in planning, budgeting, and operational management. In the Metropolitan Government of Nashville and Davidson County, for example, performance measures were originally presented in the budget document, and involvement was limited to budget staff and one or two people in each department. Recognizing the limited impact of this program, Nashville performance program staff trained departmental staff at all levels on performance measurement and business planning.
In addition, elected officials are increasingly becoming directly involved. "Stats" processes, for example, are typically initiated by a strong chief executive. Such was the case with former Mayor Martin O'Malley in the City of Baltimore, Mayor Tom Barrett in the City of Milwaukee, and Governor Christine Gregoire in the State of Washington. The National Conference of State Legislatures and the National League of Cities have programs that provide information to elected officials and encourage their involvement in performance measurement.
Citizen involvement has also increased, and citizens have taken a more active role, although performance reporting was still the most common form of citizen involvement of governments interviewed for the study Approximately 90 percent of governments in the survey said they report measures, often in conjunction with other citizen involvement methods. The budget document is the primary reporting vehicle for performance data, with 90 percent of jurisdictions having jurisdiction-wide performance measurement systems using this medium. Separate performance reports are used by 22 percent of jurisdictions in the GFOA's study.
In addition to printed information, governments are using other, more accessible methods for reporting information to the public. Many jurisdictions use a variety of media to communicate results. Fully 40 percent of jurisdictions in the GFOA study use Web sites for this purpose. The state of Washington has an extensive real-time performance measurement dashboard on the Internet, and other governments are using similar, if less extensive, Web-based approaches. The Chicago Police Department provides a Web-based GIS interface that tracks all crime by category at the block level. The Performance Measures Database compiled by the City of Austin, Texas, goes further, enabling citizens to review performance measures throughout city government by department, programs, or specific activity, including current year budgeted targets, actual results, and historical information.
As governments have become more experienced in setting targets and measuring, they have begun to use information from citizens to establish priorities and targets, rather than simply reporting results to citizens. Some governments are not only asking citizens about their priorities but using citizen input to set performance standards and specific citizen satisfaction levels. In Bellevue, Washington, for example, the government has worked with citizens to develop a set of measures the city reports on annually
A leading practice in the area of citizen involvement is the use of private-sector market research tools to gain greater understanding of citizen expectations. For example, the Fund for the City of New York's Center on Municipal Government Performance used market research practices, including focus groups, surveys, and interviews, over a six-year period between 1996 and 2001 to determine how the public perceived local government performance. Researchers found that participants were both knowledgeable about public services and reasonable in their expectations. Focus group participants were given brief descriptions of 30 city responsibilities, giving everyone an equal base level of understanding. Participants then ranked how familiar they were with each service, how important they believed each service to be, and how well each service was performed. While not scientific, these ratings provided insight into the public's perception of city services. (4)
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USING MEASUREMENT TO MANAGE THE ORGANIZATION
For performance management to become routine, state and local governments need to know about effective practices and ensure that they are incorporated into standard management processes. The second major trend that was clear in GFOA's research is that governments are using measurement systematically to manage and improve. As better information on performance management practices has become available, a growing number of governments have incorporated metrics into key managerial processes such as strategic and business planning, budgeting, and operational management. Several examples are provided below.
Comprehensive planning and management. The City of Coral Springs, Florida, uses data from performance measures to inform management decisions on long-range planning, resource allocation, and policy making, as well as for routine management tasks such as operational reviews of city services and employee performance reviews. The process extends from the strategic plan to individual employees. Supervisors work with employees to create an annual work plan tied to the city's strategic priorities and performance goals. End-of-year reviews and pay adjustments are based on the extent to which employees meet these goals. Performance indicators are based in part on customer feedback, using telephone surveys, as well as more traditional measures based on outcomes, process, inputs, and outputs.
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