1

Performance Management

Budgeting in Local GovernmentNovember 2018

William C. RivenbarkProfessorSchool of Government

Lecture objectives

❚ Provide an overview of performance measurement❚ Provide an overview of performance management❚ Identify meaningful measures❚ Using performance measures for decision-making❚ Exercise on performance management

Performance measurement

Performance Measurement Framework

Mission

Service goals

Quantifiable objectives

Performance measures(outputs, efficiencies, and outcomes)

2

Performance measurement

Measure Definition Example

Output Amount of service provided

Number of calls

Efficiency Cost per service provided

Cost per call

Outcome Quality of service provided

Response time

Performance measurement

Technique Advantage DisadvantageAgency data-base Volume of data Workload data

New technology Outcome data Expensive

Survey Outcome data Methodology

Performance measurement

Alignment with Organizational Structure

Departmental level

Divisional level

Program level

Process or Activity level

3

Performance management

❚ The definition of performance management occurs when public officials move beyond collecting and reporting performance measures to actually using them for making decisions.

Performance management

❚ Research has shown that local governments of all sizes are collecting and reporting performance measures.

❚ Research also has shown that local governments often struggle with moving from performance measurement to performance management.

Performance management

❚ Recent research has focused on what organizational factors facilitate the likelihood that local officials actually use performance data for decision-making. They are:❙ Leadership (top-down and bottom-up)❙ Culture of innovation❙ Devolved decision-making authority❙ Citizen engagement❙ Other management systems❙ Benchmarking❙ Outcome measures

4

Identifying meaningful measures

Step 1❚ Identify the mission statement, which conveys the

purpose of the program.

Example❚ The mission of the After School Program is to serve as a

“safe haven” for at risk kids.

Identifying meaningful measures

Step 2❚ Create service goals from the mission statement, which

are what the program expects to achieve.

Example❚ Pursue a high attendance rate among clients.❚ Improve the academic performance of clients.

Identifying meaningful measures

Step 3❚ Create objectives to monitor progress toward goals

which state the desired level of performance in quantifiable terms.

Example❚ Maintain an average monthly attendance rate of 90

percent or higher.❚ Improve the academic performance of 75 percent or

more of clients.

5

Identifying meaningful measures

Step 4❚ Identify measures from the objectives, focusing on

efficiency and outcome measures.

Example❚ Objective: maintain an average monthly attendance rate

of 90 percent or higher.❙ Output – number of students❙ Efficiency – cost per student ❙ Outcome – average monthly attendance rate

Identifying meaningful measures

Step 4❚ Identify measures from the objectives, focusing on

efficiency and outcome measures.

Example❚ Objective: improve the academic performance of 75

percent or more of clients.❙ Outcome – percentage of clients who improved

Identifying meaningful measures (when you don’t use process)

Measure Type of measureNumber of healthy newbornsAll residents will have access to recycling

Cost to pave each residential street-mileNumber of students who complete high schoolAverage time to process a business license requestOpinions from citizens regarding staff responsiveness

6

Using data: Recycling

Measure FY 15–16 FY 16–17 FY 17–18

Tons collected 1,695 1,750 1,785

Using data: Recycling

Measure FY 15–16 FY 16–17 FY 17–18

Diversion rate 18% 18% 19%

Using data: Recreation

Measure FY 15–16 FY 16–17 FY 17–18

Totalparticipants

589 599 625

7

Using data: Recreation

Measure FY 15–16 FY 16–17 FY 17–18

Municipal participants

484 475 480

County participants

105 124 145

External participation rate

22% 26% 30%

Using data: Building Inspections

Measure FY 15–16 FY 16–17 FY 17–18

Totalinspections

7,335 7,542 7,600

Using data: Building Inspections

Measure FY 15–16 FY 16–17 FY 17–18

Percent of inspections that are reinspections

19.9% 24.7% 27.7%

8

Using data: Streets

Measure FY 15–16 FY 16–17 FY 17–18

Potholes per lane mile maintained

1.23 1.59 2.75

Using data: Streets

Measure FY 15–16 FY 16–17 FY 17–18

Potholes Repairedwithin 24 hours

80% 84% 90%

Exercise on performance management

The following performance measures are being tracked for emergency management (E911).

1) Identify the potential problem2) Identify potential strategies for improvement3) Identify other information for review

Measure FY 15-16 FY 16-17 FY 17-18Calls per dispatcher 8,766 9,426 10,068

% of calls answered within 3 rings 96% 95% 90%

9

Conclusion

❚ Performance management requires outcome measures❚ Performance management requires comparison data❚ Performance management requires data-driven,

decision-making