2. “People and their managers are
working so hard to be sure
things are done right,
that they hardly have time
to decide if they are
doing the right things.”
Stephen R. Covey
3. Why Performance measurement?
Performance measurement in local
governments
Best Practice
Performance indicators
Balanced Scorecard
Logic Model
Performance Budgeting
Critical elements and some pitfalls
3
4. In the spirit of good leadership and
governance, there is the need to develop
appropriate measures to assess
performance
Government units of all sizes and types
use performance measures as a tool for
improving service delivery.
Performance measures offer many
advantages to organisations 4
5. Provide more effective management of
your programmes
Enhance decision making
Identify and document areas that need
attention
Strengthen managers’ focus on results
Facilitate continuous improvement
Motivate staff and volunteers
Support annual and long-range planning
5
6. Explain your programme: get the story
out to the public, to legislators, to
elected officials
Document and publicize
accomplishments
Build support for your programme
Provide accountability: what the public
is (or will be) getting for the funds
provided
6
7. 1. To demonstrate accountability to citizens,
elected officials and other interested parties by
reporting the service efforts and
accomplishments.
2. To improve the allocation of resources by
using performance information to inform the
development and enactment of a local
government’s budget.
3. 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.
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8. In any performance measurement system
you will need to:
1. Know your output measures (that is,
measures of the quantity of services
provided) to monitor the delivery of services.
2. Know your outcome measures (that is,
measures of the results associated with the
provision of services)
Please be aware of the difficulties of measuring
outcomes in the public sector
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9. 3. Use consistent measures from period to
period in order to sustain attention to the
process,
4. Ensure that there is periodic review and
revision of the performance measures.
5. Ensure that comparisons are made with
prior periods’ performance as well as with
targets.
6. Comparison of performance data to the
corresponding data from similar local
governments.
9
10. 7. Report performance results to the public and
oversight bodies, as well as using the measures
internally to initiate improvements.
8. Internally, ensure that the performance
measures are used for the evaluation and
recognition of departmental heads
This can be an effective motivator, particularly if
incentives, such as staffing flexibilities, additional
equipment and bonuses, can be partially based on
meeting performance targets and goals.
9. Follow up on progress (or the lack thereof) of
improvement plans.
10
11. 10. To assure continuation of the use of
performance measures for improving service
delivery, the systems must be driven down into
the organization such that the processes are in
place, and the people want to continue using the
processes.
11. Ensure that there is Chief Executive
commitment and involvement in the overall
process
12. Support staff involvement in the reviews of
performance results.
11
12. Action Reasoning
Know what you are Strategy of state or national government, provides
clear focus for all activities to ensure goal congruence
trying to do and synthesis
Adopt a range of Both financial and non-financial to give a clearer
measures indication of performance and areas for improvement
Extract comparative There must be a benchmark for performance to
measures facilitate a competitive environment
Report results Promotes knowledge and understanding whilst
regularly enabling effective resource allocation
Drive the system from Senior management commitment needed to enable the
the top ethos to permeate the entire organisation
12
13. Simple, meaningful, uncomplicated and easily
understood
Crafted, owned, managed by the staff and
management of the local government
Predicated on high data integrity
Must be able to drive and sustain improved
performance of staff and of services rendered by the
local authority
Linked to critical goals, targets and drivers of the
local authority
14. INPUTS: Resources used to produce an
output or out-come, such as work, years
or expenditures.
OUTPUTS/WORKLOAD: The amount of
services provided, units produced, or
work accomplished (output).
EFFICIENCY: Output per unit of input,
input per unit of out-put, and similar
measures of how well resources are
being used to produce goods and
services.
15. PROGRAM OUTCOMES: The direct
results of a program on clients, users, or
some other target group; the degree to
which the program’s mission is
achieved.
SERVICE QUALITY: The degree to
which customers are satisfied with a
program, the accuracy or timeliness
with which the service is provided, and
other measures that focus on the merit
of the service delivery process itself.
16. Are We Doing Things Right? Are We Doing The Right Things?
(How?) (What?)
Input Process Output Outcome
Input: Resources, including budget and workforce
Process: Activities, efforts, workflow
Output: Products and services produced
Outcome: Results, accomplishments, impacts
17.
18. Only if the concept of performance measurement
permeates through the whole organisation can it be
successful. Involving employees, stakeholders and
customers in planning the system is the first step to
building their trust and commitment in the
implementation phases.
Regular, open and accessible communication
channels support the system throughout its
lifecycle and ensure that deficiencies are
communicated early.
19. Ownership and commitment relate
closely to inclusion and communication.
Because the key pressures of real
measuring rest with the employees, it is
vital that they believe in its benefits to
themselves, to the organisation and to
the customer.
20. Clear accountability represents a kind of
system insurance, ensuring that
measurement is properly conducted and
results are properly reported.
It is unadvisable to leave all accountability to
rest on top management; on the contrary,
dividing it proportionally among
management levels may help to prevent late
revelation of possible system challenges.
21. Integral use of performance information lies
in making decisions about which services
are underperforming and need more
attention.
While a synthesis with other kinds of
information is needed to establish ‘why’ a
service is not performing, measurement
data are the necessary foundation.
24. The Balanced Scorecard (BSC) is a
strategic performance management
framework that allows organisations to
manage and measure the delivery of their
strategy.
In a recent world-wide study on
management tool usage, the Balanced
Scorecard was found to be the sixth most
widely used management tool across the
globe which also had one of the highest
overall satisfaction ratings
24
25. It translates an organization’s mission and
strategy into a comprehensive set of
performance measures that provides the
framework for strategic measurement and
management systems.
It attempts to balance the use of financial
and non-financial measures in driving both
short-term and long-run performance.
The BSC system is used to communicate
and manage strategy implementation.
25
28. Operational Efficiency
Supplier relationships, produce products & services,
distribute to customers, manage risk
Customer Relationships
Provide desired services/products, provide convenient
processes, provide customized services
Innovation
Process innovation, manage capital projects
29. Competencies
Total Quality Management process improvement
capabilities, developing a culture of assessment
Technology
Software, local area network, wide-area network, library
information system, Web site, portal
Climate for Action
Process improvement: Do it better, faster, cheaper
30. Productivity Strategy
Become a cost leader
maximize use of existing assets
Revenue Growth Strategy
Revenues from new customers
Increase existing customer revenues
Grants, fund raising
33. Starting Point
Mission Statement (the present)
Values Statement
The Vision (the future)
The gap between now and the future
leads to a plan of action to achieve the
vision. How we get to the future
involves strategies.
34. While the Balanced Scorecard was initially
designed for commercial companies, the
framework has found wide-spread use in
the public and not-for-profit sector.
However, it is important to make a few
changes to the strategy map template in
order to make it suitable to government,
public sector and not-for-profit
organisations:
34
35. Strategy maps have to represent the
strategy of the organisation.
Since the strategies of public and not-
for-profit organisations differ widely,
there are no right or wrong answers as
to where the financial perspectives
should go.
35
36. Move the Financial Perspective from top
spot on the strategy map template. The
overall objective of most public sector,
government and not-for-profit
organisations is not to make money,
maximise profits or deliver shareholder
return. While finance is important, it is
usually not the overall reason why the
organisation exists.
36
37. Instead, the main objective of public
sector, government and not-for-profit
organisations is to deliver services to
their key stakeholders, which can be the
public, central government bodies or
certain communities.
This perspective usually sits at the top of
the template to highlight the key
stakeholder deliverables and outcomes.
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38. The two remaining perspectives will
largely stay as they are. Any public
sector, government and not-for-profit
organisations needs to build the
necessary human, information and
organisational capital to deliver its key
processes to support its overall
objectives of serving its stakeholders.
38
40. Customers Increase Lower
Satisfaction Wait Time
Reduce
Internal Lower
Process
Cycle Time
Business Steps
Process
Increase Improve
Network Skills
Organizational Capacity
Readiness
Demonstrate
Accountability Reduce
Budget Costs
41. Public Value and Benefit
Individual & community-
based outcomes
Customer Perspective Financial Perspective
Service attributes & Accountability & value
satisfaction
Internal Processes
Efficiency & productivity
Learning & Growth
Staff skills, technology &
climate for action
42. SC is labour intensive because it is a
consensus-driven approach.
The use of the BSC also requires a
change in the orientation of the
employees (e.g. participation in decision
making).
BSC may result in employees paying
attention to the areas measured.
BSC may be too restrictive and also may
not be able to cope with a fast changing
environment.
42
43. This is also known as Results
Framework
“Begin with the end in mind”
Start by asking:
▪ What results are we seeking?
▪ What are we hoping to accomplish?
▪ How will we accomplish it?
44. A picture of a program
A way to show the relationship
between what we put in (inputs),
what we do (outputs) and what
results occur (outcomes)
Sequence of if/then relationships
Core of program planning and
evaluation
46. Focuses on ultimate outcomes that the local
government wants to achieve
It enables management to think backwards
through the logic model to identify how best
to achieve the desired results.
Thus, instead of focusing on what we are
currently doing, we will shift focus to what we
need to do to achieve our aim.
46
47. Example of Logical Results Framework to assess value for money in healthcare delivery
48. “Formal benchmarking is the
continuous, systematic process of
measuring and assessing
products, services and practices
of recognized leaders in the field
to determine the extent to which
they might be adapted to achieve
superior performance.”
49. Internal – commonly one year
compared to a previous year’s
performance
External – your performance
compared to another similar
organizations
Operational – your recent annual
or periodic performance
Strategic – long term performance
50. Internal External
Benchmarks Benchmarks
- Overall spending - Private sector
- Growth in tax wages
base - Neighboring
- Growth in cities
income - Similar sized
- New home starts counties
- Miles within - Statewide
service area groupings
- Statewide averages
51. Based on the assumption that
presenting performance
information alongside budget
amounts will improve budget
decision-making by focusing
funding choices on program
results
52. Performance based budgeting cannot begin
until a system of performance measurement
has been instituted
A functional performance based budgeting
system cannot be expected to produce the
long-term desired results in the first year of
its inception
Must build a Performance Based
Management System
53. Performance budgeting relies on:
1. Strategic planning
2. Operational planning
3. Performance accountability
4. A realistic performance
measurement system to build
budgets.
54. Performance Budgeting
Performance budgets focus on “return on investment”—that
is, what do we get for our investment of resources?
Basic service level (or continuation of basic services)?
Increased services (more services to same recipients or
expansion of same services to more recipients)?
Better (higher quality) services?
More efficient services (cost savings in service delivery)?
Mitigation or resolution of a problem?
55. Service
Service Area Objective Input Output Efficiency Quality Outcome
Street
Reconstruction 5% $1,374,500 4 4.7% 75% 7%
Maintain
Engineering
construction Contract
design costs Percent of
cost growth to Budget/actual Number of as a percent projects cost
Capital no more than 5 costs Projects of total completed growth
Facilities percent Staff completed project cost on time (%)
56. Establish the link between resources and results early and
maintain that link through budget development, appropriation,
and budget control processes.
Set performance standards linked to appropriation levels
Performance standards are the expected levels of
performance associated with a performance indicator for a
particular period and funding level. They link dollars and
results
Performance standards are one way to demonstrate
RETURN ON INVESTMENT--what we can expect to
receive for our money (easier to explain to stakeholders)
Use performance data to help make program decisions
in budget development
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57. "You can either take action or
wait for a miracle to happen.
Miracles are great but they
are unpredictable."
Peter Drucker
58. The performance measurement process should
not be used for assigning blame or finding
fault with others’ performance.
This is especially important since one person’s
desire for accountability can be perceived by
others, and particularly those on the front line of
service delivery, as merely pointing fingers.
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59. Although the local government might
conclude it obtained better service delivery or
a process improvement from collecting and
using performance data to trigger a change in
the way the program operates, it needs to
ascertain the explicit change in inputs, outputs,
and/or outcomes to confirm that the
improvement actually occurred.
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