Linking Performance Measures to Resource Allocation

By Scheps, Philip B. | Government Finance Review, June 2000 | Go to article overview

Linking Performance Measures to Resource Allocation

Scheps, Philip B., Government Finance Review

What do you do after you develop performance measures and targets? This article describes Dallas County, Texas' strategy for ensuring that measures are not only published but also studied, discussed, and utilized to make corrective actions and distribute resources in a way that supports the attainment of the organization's mission.

Although the literature on performance measurement is full of references to the importance of connecting the measurement system to the budget, there is very little practical advice on how to accomplish this connection gracefully and effectively. The so-called feedback loop that connects the results of a performance measurement process to a resource allocation process always has been the trickiest part of a complete outcomes-based management system.

To be sure, the setting of objectives, the design of measures, the establishment of targets, and the reporting and data-gathering process have their own complexities, but by-and-large most governments have learned how to accomplish these tasks, and good examples are now readily available to assist any jurisdiction willing to commit to the process. Where most governments stumble is in using these measures to make a real difference in management, personnel, business procedures, or resource allocation. For the most part, feedback becomes an ad-hoc process of publishing measures annually and hoping they will be discussed as part of an annual budget process.

In attempting to deal with this problem, Dallas County, Texas, has developed a progressive pressure system that makes performance measurement and comparison with targets a daily instrument of shared management concern in a non-threatening, non-punitive way.

The term shared management refers to the reality of urban county government in Texas, with its United Nations-like structure. All elected officials report both to their own constituencies, who expect good services, and to the elected Commissioners Court, who allocate resources and guard the tax rate. County government in Texas has no hierarchical management structure like most cities and corporate organizations. The elected County Commissioners serve as full-time managers, as well as legislators.

Add to this diffuse organizational structure the influence of a state legislature that controls about half of the counties' $600 million in revenues, a chief accountant (in Texas, they are known as county auditors) who is accountable to the state district judges in each county (there are 37 in Dallas County), and you have the ingredients for a structure that could easily complicate efforts to manage with a focus on results.

But the system seems to work well in Dallas County by any measure of governmental success: low taxes, superior bond ratings, support from the local press, low attendance at public hearings (it means we are trusted to do the right thing), good services, and elected officials who are routinely re-elected. Dallas County Commissioners have become results-oriented not because government was perceived as ineffective, but rather because they sought to continually improve.

Outcome Measurement

Dallas County began regular quarterly performance reporting in the early 90s (see Exhibit 1). The first set of reports were little more than workload and financial measures, prepared without involvement by the operating departments. This system of reports was implemented sequentially and generally without the typical mission evaluation and goal- setting that is usually recommended prior to the onset of performance measurement. This was due in part to the organizational framework of Texas county government, which derives most of its "missions" from state law rather than from agenda-setting established by local elected officials.

The performance measure system had evolved into four quarterly reports by 1997. Two of these reports were specialized outcome reports, developed by the Office of Budget and Evaluation to focus on particularly troublesome areas of county government. …

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