The Uses of Performance Measurement in Government

By Allen, John R. | Government Finance Review, August 1996 | Go to article overview

The Uses of Performance Measurement in Government


Allen, John R., Government Finance Review


Strategic planning, operational planning and control, program evaluation, and managers' performance appraisal all work more effectively when performance measures are used.

Continuing pressures for improved accountability and greater value-for-money performance have prompted governments at all levels to recognize the need for program performance measurement. Many jurisdictions, particularly in the United States, even have legislated performance measurement of programs, but performance measurement is still at an early stage of development. While many governments are developing formal performance information, there are not many that have implemented it to the point where it is used as a regular feature of management and decision making.

Performance measurement still is greeted with scepticism by some program managers. For some, it is just a "bean counting" exercise, offering little in terms of program planning and performance improvement. The sceptics might have a point if performance measurement is implemented as a stand-alone information system used primarily for accountability reporting of past performance.

To be successful, performance measurement must be more than score keeping. It must be used and supported by a large number of program managers. Managers are the ones who know their programs best and thus what the best measures will be. Managers will be responsible for timely and accurate data collection and reporting, and they will be the ones with the greatest potential to use the measures to improve program effectiveness and efficiency. Performance measurement therefore must become an integral part of managing government programs, and it ought to be used in as many decision-making applications as possible.

This article provides government officials with guidance on how to use performance measurement. First, a simple framework for developing meaningful and useful performance information is described. Next, the article discusses general principles of results planning, monitoring, and evaluation. Then it shows how performance measurement can be used in a variety of management processes including strategic planning, operational planning and control, program evaluation, manager's performance appraisal, resource allocation, and accountability reporting to the public and political governing bodies.

Developing Useful Measurements

Managers need to be clear about what constitutes meaningful performance information before they can use it. If performance measurements are to help to achieve results, they must relate directly to the program's mission and its key results. Developing meaningful and useful performance measurements is a three-step process which is used to define the program mission, to identify its key results, and finally to select measures for the key results. An example appears in Exhibit 1.

This methodology can be applied successfully to any government and any level of an organization, and it is relevant to any kind of program - direct service, regulatory, transfer payment, and internal-support programs. It follows a program's logic, and thus it is simple for managers to understand and apply.

Defining the Program Mission. Every program or service exists for a purpose. It must be clear what that purpose, or mission, is because performance measurement must contribute to achieving the mission. An effective mission statement is succinct and responds to the following three questions:

* What is the product/service provided?

* Who is the intended client or target group?

* Why is the program of more general benefit?

Identifying the Key Results of the Program. The results are statements describing what the program wishes to achieve in support of the mission. Thus, they can be classified into three groups relating directly to the three questions of the mission:

* work process outputs (what?) - the direct outputs and efficiency of the activities undertaken in conducting business;

* client-oriented results (who? …

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