integrating performance measurement into management

G O V E R N M E N T S G E T

F O C U S E D O N R E S U LT S

In t egra t ing Pe r f o rmance Measurement

in to Management Dec i s i on Mak ing

B Y C A R O L Y N R . F A R Q U H A R

3 0 4 - 0 0 DETAILED FINDINGS

Leading jurisdictions are shifting the focus from inputs and activities to

achieving results that are meaningful to citizens.

Leadership, at the political and administrative levels, is vital to initiating and

sustaining support for performance measurement.

Jurisdictions have developed frameworks for performance measurement that

can be understood and used by managers.

One of the most important roles of performance measurement is to help

managers make better decisions.

W H AT ’ S I N S I D E

UNDERSTANDING THE STRATEGICENVIRONMENT

Economic Analysis

Business and Society

Policy Analysis

ORGANIZATIONAL RESPONSE

ImprovingOrganizational Effectiveness

Managing Human Resources

Managing Innovation and Technology

A Conference Board of Canada publication from the Centre for Management EffectivenessVice-President, Centre for Management Effectiveness Prem Benimadhu

Editing Jane Whitney • Layout Janice Longpré

©2000 The Conference Board of Canada*

304-00 Detailed FindingsPrinted in Canada • All rights reserved

Agreement No. 1626922 • ISSN 0827-1070 • ISBN 0-88763-488-5*Incorporated as AERIC Inc.

Recycled paper

About the Conference Board

The Conference Board of Canada is an independent, not-for-profit research organization with affiliates in theUnited States and Europe. Our mission is to help our members anticipate and respond to the increasingly changingglobal economy. We do this through the development and exchange of knowledge about organizational strategies andpractices, emerging economic and social trends, and key public policy issues. Since 1954, the Board has been commit-ted to researching innovative practices, designing new strategies and providing our members with the most up-to-dateinformation, analysis and expertise to help them excel in Canada and around the world.

About the Centre for Management Effectiveness

The Centre for Management Effectiveness provides decision makers in the private and public sectors with knowledgeand insight on key issues and trends in the areas of human resources, strategy, quality and organizational effective-ness through research on best practices, customized information services and executive networking opportunities.

Preface

In an environment in which governments must demonstrate value for money and responsiveness to citizens’ needs,using performance measurement has emerged as an essential strategy. This report examines seven jurisdictions thatare integrating performance measurement with management decision-making processes to ensure direction andsupport in achieving desired results.

We would like to thank the members of the Conference Board’s Government Performance and AccountabilityNetwork for their support and input in preparing this report. We would also like to thank the many individuals withineach of the seven jurisdictions for their generous contribution of insights as well as their willingness to push thefrontiers of thinking on performance measurement approaches.

Although this report draws on the experiences of government managers in the jurisdictions studied, responsibilityfor its content rests solely with The Conference Board of Canada.

James R. NiningerPresident and Chief Executive OfficerThe Conference Board of CanadaNovember 2000

Governments around the world are implementingperformance measurement approaches to help themdefine and achieve outcomes that meet the needs ofcitizens. People want to know what is being accom-plished with their tax dollars, not just how much isbeing spent and where. This shift toward “resultsachieved” brings with it an emphasis on the alignmentbetween government goals, the outcomes achievedand the “difference that has been made” by the pro-gram or service.

How have leading governments made performancemeasurement integral to their management decisionmaking? This report examines seven jurisdictions fromacross North America, each of which has tailored itsperformance measurement approach to enable it tomore effectively meet the needs of stakeholders.

To support the integration of performance measure-ment with management decision-making processes,these jurisdictions are focusing on building capacity—engaging line departments and agencies in usingperformance measurement, integrating tools andprocesses with management systems and ensuring thatmanagers see the value of using performance informa-tion in decision making.

The experience of these governments—state,provincial and local—reveals that there are fourenablers that build this capacity: (1) developingmomentum through leadership, (2) creating frameworksto integrate management processes, (3) communicatinginformation and (4) supporting managers’ acquisitionof skills and capabilities in using performance infor-mation to make decisions.

Leadership—in the political and administrativespheres—is vital in ensuring the legitimacy and accept-ance of the need to integrate performance measurement

and decision making throughout the organization.Leaders create momentum for performance measure-ment initiatives by demonstrating their personalcommitment, building on existing efforts and recognizing existing accomplishments.

Jurisdictions have developed frameworks to supportthe integration of performance measurement with theirstrategic planning and budgeting processes. Suchframeworks can help managers understand the link-ages between performance measurement and theplanning and budgeting processes—they clarify the connection between goals and targets and theresources allocated.

Jurisdictions are also building capacity by developingsystems to ensure that performance information can becollected and used effectively and communicated to allstakeholders. Customizing these systems to the needsof managers, as well as making the tracking and use of performance information simpler and more user-friendly, is vital to getting managers to use perform-ance information in decision making.

Providing training and development resources tohelp managers use performance measurement is key.These resources include outside expertise, best prac-tices and formal training. Jurisdictions have found thatboth the technical and cultural change aspects ofperformance measurement need to be addressed.

While jurisdictions are encouraging managers toinclude outcome measures in their own agency plansand budgets, they are also fostering environments inwhich cross-agency and cross-government goals andoutcomes are explicitly identified and managed for.Reporting to all stakeholders on overall performance—and the “things that make a difference”—is an increas-ingly widespread practice.

304-00 EXECUTIVE SUMMARY

E X E C U T I V E S U M M A R Y

G O V E R N M E N T S G E T F O C U S E D

O N R E S U LT S

In t egra t ing Pe r f o rmance Measurement

in t o Management Dec i s i on Mak ing

B Y C A R O L Y N R . F A R Q U H A R

November 2000

1 1 Introduction

Leading Practices in North AmericaPutting Performance Measurement at Centre Stage: Building Organizational Capacity

4 2 Leadership: Paving the Way for Change

Demonstrating Personal CommitmentBuilding on Existing Initiatives: “Start Where People Are”Recognizing People’s Efforts and Successes

13 3 Architecture: Creating the Frameworks to Integrate Processes

Providing Support Along the WayBringing Processes TogetherHelping Line Managers See the Linkage

22 4 Developing and Communicating Information: Building Support Systems

Shaping Supportive Information SystemsManaging the Volume of MeasuresCommunicating the Information

26 5 Building the Right Capabilities: Helping Managers Act Effectively

Drawing on Outside ResourcesProviding Corporate Training and Executive Development

28 6 Capitalizing on Capacity: Using Performance Information in Decision Making

Understanding Measures and How They Fit TogetherA Focus on Outcomes: Integrating EffortHelping Line Managers Make DecisionsThe Auditors’ Perspective

37 7 Reporting Results

39 8 Future Directions

C O N T E N T S

1 The Conference Board of Canada

The practice of managing for results is not entirely new.

What hasemerged more recently is an integrated approach to performance measurement.

People want toknow what is being accomplishedwith their tax dollars, not just how much is beingspent and where.

How can government decision makersdetermine what outcomes would repre-sent improved quality of life for citizens?How can they ensure that their prioritiesand strategies are linked to demonstrableresults? How can progress toward theseresults be measured? And how can theachievement of outcomes be communi-cated to all the relevant stakeholders?

Governments around the world areembracing performance measurementtools and approaches to help them answerthese questions. The emphasis on perform-ance measurement is evidence that govern-ment decision makers are responding topressure to do the right things—shiftingthe focus to results—in meeting the needsof their citizens and stakeholders.

This practice of managing for results isnot entirely new. Over the past 30 years,leading management thinkers have advo-cated that governments should take stepsto manage for performance and results.1

What has emerged more recently is an integrated approach to performancemeasurement. The integrated approachensures that performance measurementis brought together with the strategicplanning and budgeting processes, thatperformance measures are part of manage-ment decision making and that perform-ance measures support the alignmentbetween the overall goals of the govern-ment and its delivery of policies andprograms to citizens.

People want to know what is beingaccomplished with their tax dollars, notjust how much is being spent and where.Managing for results has helped to shiftdecision makers away from a focus on

the “appropriated amount” toward the“results achieved.” In other words, itmoves the emphasis away from inputsand activities and toward the outcomesand impacts of programs and services—itasks how well outcomes are aligned withgoals and what “difference has beenmade” by the program or service efforts.

In an environment of cost cutting anddownsizing, performance measurementprovides insights into which programsare providing value. However, even asresources become more readily available,decision makers need help in makingchoices. Performance measurementprovides them with rich information and feedback on how well they areserving citizens.

The primary reasons for implementingperformance measurement are to increaseopenness, enhance accountability and aid managers in improving performance.There are few organizations, in the publicsector or in business, that have not under-taken initiatives to measure their perform-ance at the program and policy levels.2

1 I N T R O D U C T I O N

Defining Measures

Jurisdictions are using a set of measures to help themin assessing the results of a program or service on itsrecipients. These measures include:• inputs—the resources used to produce or are

consumed by the program/service;• efficiency—measures costs, unit costs or

productivity related to a given output or outcome;• outputs—the volume of work required to achieve

a program/service; and• outcomes—the benefits or changes that occur

because of a program/service.

1 Peter F. Drucker, Management: Tasks, Responsibilities, Practices(New York: Harper and Row, 1974).

2 There is a growing trend around the world to use performancemeasurement to improve decision making and enhanceaccountability in government. One of the challenges for managers

is the complexity of performance measurement initiatives.Jonathan Walters has written a user-friendly “guidebook”demystifying managers’ use of performance measurement,Measuring Up: Governing’s Guide to Performance Measurementfor Geniuses (and Other Public Managers) (Washington, D.C.:Governing Books, 1998).


But significant challenges remain in makingperformance measurement part of theway that the organization is managed and an integral part of how managers see their roles.

Leading Practices in North America

To gain an understanding of howgovernments are incorporating perform-ance measurement into their managementefforts, The Conference Board of Canadastudied the use of performance measure-ment in seven leading jurisdictions acrossNorth America. These jurisdictions, listedin Exhibit 1, demonstrate a range ofapproaches to performance measurement.3

In each jurisdiction, extensive interviewswere conducted with senior officials incentral agencies, in line departments andagencies and in legislative audit functions.The interviews were designed to explore

how strategic planning and resourceallocation processes have been success-fully integrated with performance measurement efforts, what has workedwell and what has not and how perform-ance information is used to help jurisdic-tions achieve results. For purposes ofillustration, the Board also examined, butin less detail, the approaches of severalinternational jurisdictions.

Putting Performance Measurement atCentre Stage: Building OrganizationalCapacity

To ensure that performance measure-ment is used to enhance decision making,the jurisdictions studied are focusing on building capacity—moving beyondawareness building and incorporatingperformance measurement into manage-ment systems and processes. For eachjurisdiction, the goal has been to engagethe line departments and agencies inusing performance measurement, tointegrate the tools and processes with themanagement systems (including strategicplanning and budgeting) and to ensurethat line managers see the value of usingperformance measures in their decision-making processes. For decision makers,performance measurement helps toframe and answer the questions: are wedoing the right thing? how well are wedoing it? and how do we know?

Significantchallenges remain in makingperformance measurement part of the way that the organization is managed.

To ensure that performance measurement is used to enhancedecision making, the jurisdictionsstudied are focusing on building capacity.

3 The jurisdictions were selected because of their track record indeveloping and implementing performance measurement. InGrading the States, a report released in mid-1999 by Governingmagazine, each of the three U.S. state jurisdictions received highmarks for their overall management, including management in thefinancial, human resources, information technology and capitalareas and in managing for results. Each of these jurisdictions,Texas, Washington and Virginia, has been widely recognized for its efforts in managing for results (receiving a B+, B+ and A-, respectively).

Other jurisdictions were selected based on their success inintroducing and maintaining performance measurement systems,

their recognition by peers and commentators and theircommitment to improving service to citizens. The RegionalMunicipality of Peel played an important role in spearheading abenchmarking initiative among 14 regional municipalities inOntario, while the City of Calgary has been a leader in servicequality initiatives for the better part of a decade. The Governmentof Alberta is widely recognized for its pioneering efforts inimplementing business planning, performance measurement andregular reporting on performance across government. PrinceWilliam County stands as a leader in local government initiatives,with a commitment to meeting the needs of citizens, strongleadership at the political and administrative levels and a rigorousfocus on performance budgeting.

Jurisdictions Studied

• Province of Alberta • City of Calgary, Alberta• Regional Municipality of Peel, Ontario• Prince William County, Virginia• State of Texas• Commonwealth of Virginia• State of Washington

Exhibit 1


Four enablers support the successfulintegration of performance measurementinto management decision making:1. leadership—paving the way for change; 2. architecture—creating the frameworks

to integrate management processes; 3. developing and communicating

information—building support systems;and

4. building the right capabilities—helping managers act effectively.These enablers provide guidance and

support to decision makers in identifyingand using performance measures

effectively and help focus them onmanaging for results. They help to shift performance measurement from aseparate activity focused on “counting”to an integrated process focused onachieving results. They also ensure thatthe needed resources and managementskills are in place.

This report first explores each of theseenablers and looks at how jurisdictions areimproving organizational capacity to useperformance information. It then turns to a discussion of how this improved capacitysupports the focus on managing for results.

Four enablerssupport the successful integration of performance measurement into managementdecision making.

A Worldwide Change

Governments around the world are undergoing massive administrative reform, driven primarily by mountingeconomic pressures to increase efficiency. The fiscal pressures that hit governments everywhere in the late 1980s andthrough the 1990s meant that earlier patterns of tax increases and spending were no longer viable.

One of the most effective tools for reform has been the introduction of performance measurement or results-basedmanagement. A 1999 survey of nine OECD countries showed that performance management reforms are a pervasiveapproach to improving efficiency, enhancing accountability and improving transparency. The countries surveyed wereCanada, Finland, Germany, Ireland, the Netherlands, New Zealand, Norway, Portugal and the United Kingdom. In asignificant number of countries, the country parliaments receive periodic reports on the progress of results-basedmanagement within their government.1

While some countries report that practices began at the local level and were then implemented at the national level,there is equal evidence of the reverse. The unifying theme for these countries’ approach to performance management hasbeen a relentless focus on results and the development of systems and processes that support this focus.

Notable examples of performance management reform have taken place in the Antipodes. In New Zealand, governmentdepartments develop annual purchase agreements (between the relevant minister and the head of the department) that definethe outputs to be delivered by the department in return for the appropriations received. It is the role of elected officials ingovernment to collectively identify the outcomes that will be achieved based on these outputs. These reforms have been inplace for nearly a decade; however, New Zealand has recently sought to align outputs and outcomes more closely throughstronger accountability frameworks. Key initiatives include providing better information to agency heads so they can moreclearly be held accountable for their decisions, while ministers will be more sharply focused on fostering and assessingdepartmental capability to respond to government priorities over time. Similarly, in Australia, the Commonwealth govern-ment uses an accrual-based outcomes and output framework, implemented in mid-1997. Again, Parliament appropriatesfunds to achieve the agreed outcomes. Agencies specify the outputs that they will achieve, directly or through third parties,and indicators are developed to measure effectiveness and performance (i.e., price, quality and quantity).

In the United Kingdom, the development of service standards for each government department and agency has beenkey to improving public services. The creation of charters, at the national and local levels, has paved the way for greateropenness and communication with the public and more effective allocation of resources to improve service quality. At thelocal level, each authority must publish details of their performance against a set of indicators. Each local authority canuse their charter’s indicators to help build a system for monitoring performance.

In the United States, as a result of the Government Performance and Results Act of 1993, all federal agencies are nowrequired to prepare a five-year strategic plan and report regularly on their performance to Congress. The momentumcreated by this legislation will likely have impacts at other levels of government, transforming the requirements forgovernment planning and performance reporting.

1 Synthesis of Reform Experiences in Nine OECD Countries: Government Roles and Functions, and Public Management (Paris: OECD, 1999).


As jurisdictions implement perform-ance measurement as a management tool,strong leadership at both the political andadministrative levels is vital in ensuringits acceptance. Ongoing support fromboth entities will remain important asmanagers use performance information to make effective decisions.

Successful implementation of per-formance measurement also requires themutual support of political and adminis-trative leaders and recognition of theircomplementary roles. For politicalleaders, the public championing ofperformance measurement is key—theyare best positioned to communicatedirectly with all stakeholders; they aremost visible and best able to convinceothers of the importance of being focusedon results. While elections are rarely won or lost based on the presence ofperformance measurement systems, theresults achieved often figure prominentlyin approval ratings.

The first visible support for perform-ance measurement often comes from thepolitical level. Recognition of a need toimprove accountability and providegreater openness for stakeholders or thatcurrent efforts are not producing theneeded results has provided the focalpoint for a jurisdiction-wide approach to

performance measurement. Politiciansare pressing for performance informationbecause they must make critical allocationdecisions, often with limited informationabout a particular program or service.

For political leaders, their level ofknowledge about performance measure-ment and their confidence that the rightresults are being achieved is key toaccomplishing goals. They also play avital role in building bridges with otherlevels of government, representing theneeds and interests of the citizens andremoving barriers to effective organiza-tional management.

For leaders within the administration,the explicit linking of inputs to theachievement of outcomes is vital to theeffective management of scarce resources.Understanding how the use of resourcesultimately affects outcomes can helpilluminate choices, the rationale for thesechoices and a longer-term view.

In the jurisdictions studied, leadersfound the following principles to beinvaluable in gaining acceptance for, thewidespread use of and value from theirperformance measurement initiatives: (1) demonstrate personal commitment,(2) build on existing efforts, that is, “startwhere people are,” and (3) recognizepeople’s efforts and successes.

Demonstrating Personal Commitment

Leaders are focusing their ownefforts—and marshalling resources—tokeep the issue of performance measure-ment front and centre for citizens, legis-lators and agency managers.

Often, this demonstration of leader-ship comes down to a very personalcommitment, sometimes requiringleaders at the political and administrativelevels to take a “leap of faith.” In the Cityof Calgary, there has been strong supportfrom elected officials as well as the CEO

As jurisdictionsimplement performance measurement as amanagement tool,strong leadership at both the politicaland administrativelevels is vital in ensuring its acceptance.

In thejurisdictions studied, leaders found the followingprinciples to be invaluable: (1) demonstratepersonal commitment, (2) build on existing efforts, and (3) recognizepeople’s efforts and successes.

Notes from the Field . . .

In Prince William County, performance measure-ment has made it possible to respond to fiscalconstraints and shift resources into areas of strategicimportance to the community. For example, in 1997the county decided to cut the annual budget for a localdrug rehabilitation program. Although this decisionmight have been politically risky, county managementrecognized that the program was not performing—only25 per cent of the program’s clients were completingthe program. The decision was made with the fullsupport of the county’s political leadership.

2 L E A D E R S H I P : PAV I N G T H E WAY

F O R C H A N G E


for efforts to focus on results. One alder-man, Alan Bronconnier, notes that “we arestarting to look at the results of servicedelivery rather than line by line” in makingresource allocation decisions. His colleagueBob Hawkesworth adds, “Performancemeasures help me to prove to myself thatwe are doing the right thing.”

Both councillors emphasize that theyare pushing for measures that are mean-ingful and that reflect cross-departmentalco-operation, recognizing that problemsare best addressed when agencies worktogether. Equally important has been CAO Paul Dawson’s early commitment toperformance measurement and improvingservice delivery to Calgary’s citizens.

Linking Performance Measurement to the Leadership Message

For many leaders, the commitment to performance measurement arises froma broader understanding of the elements of change management. In the State ofWashington, Governor Gary Lockeemphasizes performance measurementas central to his vision for the state and

to his management agenda. The focus on performance measurement provides a basis for defining the outcomes that thegovernment is trying to accomplish. Thegoals for his administration are fivefold:education, economic vitality, environmen-tal protection, public safety and restoringpublic trust in state government.

Governor Locke explicitly links theimportance of performance measures andpublic accountability with the challenge of restoring public trust, noting that“governors need to do more than justlaunch new programs. They also have todemonstrate their ability to make govern-ment more responsive, more effective andmore efficient. People want to know thatwe are doing a good job with the dollarsgovernment now receives before we talkabout new programs and more dollars.”1

Implementation of the Governor’sagenda by the state’s executive manage-ment team has been promoted throughthe use of executive orders mandatingthe implementation of quality efforts andbuilding on existing legislation mandatingperformance budgeting. Linking the focuson results with the statewide total qualityinitiative has been valuable in two distinctways: first, it has provided performancebudgeting with a solid managerial under-pinning in terms of quality’s focus oncustomers/citizens, leadership, planning,integration and results. And, second, forthose within the state government whosaw performance budgeting simply as a“numbers” exercise, the quality emphasishas provided depth and breadth to thestate’s efforts. The Governor has appointeda special adviser on quality to engageagency managers on both the quality andperformance measurement efforts. This

Bob Hawkesworthadds, “Performancemeasures help me to prove to myself that we are doing the right thing.”

For many leaders,the commitment to performancemeasurement arisesfrom a broader understanding of the elements of change management.

Governor Lockeexplicitly links the importance of performance measures and publicaccountability with the challenge of restoring public trust.


The Texas Parks and Wildlife Department hasdeveloped a set of measures to ensure that the agencyis performing effectively and meeting the needs ofstakeholders. Since the agency’s direct users provideapproximately half its budget revenues through userfees, the agency management pays close attention totheir needs. Andrew Sansom, the agency head,undertakes annual “scoping” meetings, which he andhis executive team hold in various locations across thestate to provide an opportunity for constituents to raisekey issues. These issues are then factored into thedevelopment of the agency’s strategic plan andperformance measures.

1 Quote from the August 1998 National Governors’ Associationmeeting, Improving Service Quality: A Governor’s Guide forLaunching or Expanding Major Quality Initiatives.


individual, Renee Ewing, meets withevery Cabinet agency on a quarterlybasis to discuss their results and thelinkages to overall government goals and citizen satisfaction.

The leader of each agency or depart-ment can play an important role inconnecting performance measurementefforts to the management systems inplace. Helping people understand howthe setting and tracking of performancemeasures can be integrated with theirindividual performance managementefforts is key in making performancemeasurement relevant and useful. InCalgary, former Chief of Police ChristineSilverberg emphasizes helping membersof the force understand how their indi-vidual competencies fit with overallperformance.

For Chief Silverberg, getting people tounderstand the importance of doing thosethings that meet the needs of the organ-ization and the community requires clearand consistent communication of values,ensuring that officers understand that theywill be measured on those things that areimportant to the organization and thecommunity, and the use of tools such as the Balanced Scorecard to ensure that important issues are examined andmeasured. In her five years with the force,the chief saw the benefits of a clear andconsistent performance measurementmessage. When she first joined the force,people wanted to know where the organ-ization was going; as she notes, “Thisquestion was asked over and over again.”According to Chief Silverberg, setting outgoals for the community and the organiza-tion and communicating them providedan important basis for addressing criticalissues and for ensuring that problem areasreceived the necessary resources. She notesthat “constant reinforcement is needed—you have to be on it all the time.”

Turning Resistance into CommitmentLeaders must overcome preconceived

notions about performance measurementas well as outright resistance to a newway of managing and recognizing efforts.Creating visibility for the performancemeasurement initiative may take time anddoes require people to be willing to takesome personal, and often organizational,risks. Some managers see the focus onperformance measurement as circum-venting their own control or flexibility,while others fear that performanceresults may be used as a weapon ratherthan a way to improve decision making.Still others have voiced concern that theywill be held accountable for outcomes thatare not within their control. Jurisdictionshave found that gaining people’s com-mitment early on is key to the success ofperformance measurement efforts.

Supporting people’s efforts in usingperformance measurement sends strongsignals. The Auditor-General of Alberta,Peter Valentine, has noted publicly thathe will accept the efforts of “those agen-cies that measure and fail but not thosethat fail to measure.”

In Alberta, beginning in 1993, leadershipat the most senior levels of Cabinet pro-pelled the adoption of a business planningapproach that entailed the introduction ofa government-wide business plan and fiscalplan, ministry business plans and budgets,and regular reporting on performance. Areport from the Financial Review Com-mission noted that “by establishing long-term goals and relevant program objec-tives, and then developing the requiredbudgets and reporting systems, perform-ance can be measured against the plan.”

Early on, the Alberta approach took a government-wide view, establishing acomprehensive accountability frameworkthat was supported by legislation. Theprocess was put in place by the standing

The leader ofeach agency or department can play an important role in connectingperformance measurement efforts to the management systems in place.

Leaders mustovercome preconceived notions about performance measurement as well as outrightresistance to a new way of managing and recognizing efforts.

Supportingpeople’s efforts in using performance measurement sends strong signals.


policy committees, which were committedto running government like a business. Boththe Premier and the Treasurer played verystrong leadership roles, underscoring that“this was the way things would be done.”The Treasurer visited leading jurisdictionsacross North America to gain a betterunderstanding of the potential gains.

This support has been a hallmark ofthe Alberta approach. And, in the mostrecent cycle of developing the government’sbusiness plan, the process is initiated byexecutives within the Treasury and theExecutive Council. The Executive Counciltakes the plan to the Agenda and PrioritiesCommittee and then to Cabinet forapproval. According to Deborah Owram,Deputy Secretary to Cabinet, this stepprovides an important advantage ingaining commitment right up front to a government-wide business plan.

Building Bridges Between Political and Administrative Leaders

The development of a supportive andrespectful working relationship betweenpolitical leaders and those within theadministration has proven to be animportant ingredient in the jurisdictionsstudied. Although continuity of politicalleadership provides an advantage, thereare instances where the commitment to performance measurement has beensustained even when the government in power has changed.

In Prince William County, there has beena positive working relationship betweenthe political leaders and the county execu-tive team. As Melissa Peacor, DeputyCounty Executive, points out, politicalleadership has played an important partin gaining acceptance from the citizenryitself. The county’s Board of Supervisorshas, from the outset, aligned the focus onperformance measurement and resultswith the needs and priorities of citizens.

Thus, the progress of the county’s effortsto implement performance measurementhas been a visible part of the politicalleadership’s record. The county leader-ship has made a long-term commitmentto implementing a strategic plan, whichsets out a vision for using performancemeasurement to guide decision making.

Building on Existing Initiatives: “Start Where People Are”

In each of the jurisdictions studied, a performance measurement approachhas been introduced as a corporate-wideinitiative; however, it is important toacknowledge and build on the perform-ance measurement and improvementefforts already in place in many agencies.Recognizing the experience and com-mitment that already exists within theorganization is an important ingredientof success.

Getting Under Way with PerformanceMeasurement Efforts

It is equally important to put a stake inthe ground and do something, recognizing

The developmentof a supportive and respectful working relationshipbetween politicalleaders and those within the administration has proven to be an important ingredient.

It is important to acknowledge and build on the performancemeasurement andimprovement effortsalready in place inmany agencies.


It is important for leaders to be clear about whatthey want a performance measurement initiative toaccomplish, both in the short term and in the longterm. In the case of Prince William County, consisten-cy of leadership has been an important factor, allowingthe political leadership to foster a positive relationshipwith citizens by understanding and responding to theirneeds and putting these at the core of the county’sstrategic direction.

In the earliest stages of Prince William County’simplementation of performance measurement, theChair of the County Board of Supervisors, KaySeefeldt, supported a “futures” process in which 15 citizens were named to a committee to provideguidance regarding future directions for the county. Aspart of this process, over 3,000 citizens were consultedto identify priority areas for the county.


that successful efforts will take time andthat commitment is built on demonstratedsuccesses. The State of Washington devel-oped an architecture and establishedperformance budgeting in statute, butalso recognized that an initial phase-inwould be necessary. The state expectscontinuous improvement after the phase-inis over, as agency heads and managersgrow more comfortable with the processesand see that the results can benefit theirown decision making. As CandaceEspeseth, Assistant Director for theBudget Office of the Office of FinancialManagement, notes, “We recognized thata cultural change is implied here, andour focus has been on supporting peoplealong the journey.” There is also recogni-tion that every agency is at a differentplace in its evolution. Some of theprogress can be pushed along, but thereis also a natural evolution that takesplace. One official also noted that “youcan get better just by starting!”

In Washington, the introduction of theBalanced Scorecard in all Cabinet agen-cies has been a vital step in engagingagency heads in developing and usingmeasures that help to focus and align allefforts within the agency in order toachieve results.

At the Department of Labor andIndustries, Director Gary Moore hadalready implemented a PerformanceAgreement Scorecard. Soon after hisappointment as director in early 1997,Moore conducted a series of consulta-tions with key stakeholder groups. Heused these consultations to help definefour agency priorities and associated keymeasures that then became the basis forthe agency scorecard. Rather thanrevamping the initiative that was alreadyunder way, Moore proposed that hisagency’s scorecard be cross-referenced tothe Balanced Scorecard categories. Moore

notes that “it was critical to maintain theagency’s focus on our priorities, usingthe Balanced Scorecard categories as afilter to assess appropriate alignment ofgoals and targets.”

Gaining Buy-in

Recognizing the skill and knowledgeof front-line employees is an importantpart of successfully implementing andimproving performance measurementefforts within an agency or department.Their understanding of customer needsand the ways in which business pro-cesses can be improved is vital. Gaining their commitment to change is a keycontributor to success.

It is also important to engage middlemanagers. At least one executive notedthat performance measures help ensurecorporate priorities are clear, which canbe a distinct advantage in helping middlemanagers deal with multiple priorities.As well, middle managers operate in acritical place in organizations, linking thestrategic direction articulated at the topwith the activities carried out by front-line staff. Their perspective on the useful-ness and accuracy of performance meas-ures and their up-close view of howmeasures are used within the agency isvital knowledge for agency managersand those providing leadership fromcentral agencies.

A key learning for several executiveshas been the importance of commonlanguage—both for building commit-ment across the organization and forreducing “fuzziness” in terminology oroutright confusion of terms. It was notedby at least one seasoned professional thateven accepted terms have differentinterpretations and that, surprisingly, noone has developed a common lexicon tohelp managers navigate this challengingmanagement area.

It is importantto recognize thatsuccessful efforts will take time and that commitment is built on demonstratedsuccesses.

There is alsorecognition that every agency is at a different place in its evolution. Some of the progresscan be pushed along,but there is also anatural evolution that takes place.

Recognizing the skill and knowledge of front-line employees is animportant part of successfully implementing and improving performance measurement efforts.


Recognizing People’s Efforts andSuccesses

In most of the jurisdictions studied,performance measures for each agencyare identified and agreed on through aniterative process requiring consultationand acknowledgement of what agencymanagers can and should be heldaccountable for. Implementing a systemof incentives—and disincentives—for

achieving agreed targets may presentsome particular challenges. For linemanagers, the linking of organizationalperformance and individual recognitionis one of the most sensitive areas.

To address these issues, jurisdictions areendeavouring to hold managers account-able for the performance of those programsand areas in which they can exercisecontrol, or at least an influence, over inputs.The measures and targets selected mustbe deemed relevant and achievable bythose involved in delivering the programor service. And agency managers mustbe able to manage resources and takeremedial action to achieve agreed-on goals.

Introducing Incentives and Disincentives

The goal of any incentives programmust be very clear to those who are partof it. Senior management must be certainthat they have taken stock of unintendedconsequences that may arise from theimplementation of some performancemeasures, that is, they must ensure thatany tradeoffs or service impacts are fullyunderstood.

Applying rewards and disincentives to the achievement of particular goals is a relatively new area for governments.There are, however, several jurisdictionsthat are incorporating reward structuresinto their management systems. TheState of Texas, for example, has specifiedspecific actions to recognize the successfulaccomplishment or exceeding of perform-ance expectations. Positive incentives/rewards include “increased funding,exemption from reporting requirements,increased funding transferability, formalrecognition of accolade, awards orbonuses, expanded responsibility, orexpanded contracting authority.”

The state has also specified actions todiscourage underperformance. Negativeincentives or redirection include “evaluation

Performance measures for each agency areidentified and agreed on through an iterative processrequiring consultationand acknowledgementof what agencymanagers can andshould be heldaccountable for.

Jurisdictions areendeavouring to hold managersaccountable for theperformance of thoseprograms and areas in which they canexercise control, or at least an influence, over inputs.


Engaging managers and front-line employees hasproven key to significant turnarounds in the use ofperformance information. In the Texas Department of Insurance, the 1995 state auditor’s report revealedthat of the agency’s key measures, one-third wereaccurate and one-half were inaccurate; the accuracy of the remainder could not be determined because ofinadequate records.

As management looked at these results, it wasclear that no concerted effort had been made to reviewthe agency’s measures overall when the state hadimplemented its new strategic planning approach inthe early 1990s. The agency had simply continued tomonitor the measures that had been in place for anumber of years.

To address this issue within the agency, a newcommissioner, Elton Bomer, was brought in. Bomerwas a former legislator and a strong believer inperformance measurement. Determined to change theagency’s management of its performance measurementsystem, he directed his six assistant commissioners totake personal responsibility for a subset of measuresand to report on them quarterly.

The directive sent a strong message to seniormanagement regarding the importance placed onperformance measurement within the agency. And,although there were initial challenges in sorting out the collection and reporting of data, improvements in the processes and results appeared almostimmediately. For example, the proportion of toll-free hotline calls that were answered increaseddramatically, from 50 per cent to 85 per cent, in just a year. Moreover, the fraud unit more thanquadrupled the restitution obtained for consumers, up from $2.4 million in 1996 to $13.5 million in 1997.Also in 1997, the state auditor found that of 59 keymeasures, 78 per cent were accurate.


of outcome variances for remedial plan,reduction of funding, elimination of fund-ing, restrictions of funding, withholdingof funding, reduction of funding transfer-ability, transfer of functional responsibilityto other entity, recommendation for place-ment in conservatorship, or direction that a management audit be conducted.”2

In addition, the state has introduced a performance reward that recognizesproductivity improvements and innova-tive programs across the government. Itcan be awarded to individual employeesat the discretion of the agency head. For anagency to qualify for the reward, 80 percent of its established key performancemeasures must be achieved or exceededand at least 70 per cent of its perform-ance measures must receive unqualifiedcertification by the State Auditor’s Office.In the first year of the initiative (fiscal1998), five agencies within the state metthese two criteria. In 2000, 19 agenciesachieved the target. The Texas EducationAgency was one of these; a performancereward program has been implementedwithin the agency, with a one-time pay-ment to individuals who have met thetargets negotiated on measures related totheir divisional or departmental plans.

Finding out what is important to linemanagers is key in designing incentiveand reward strategies. In the State ofFlorida, the use of incentives and disin-centives is in an exploratory phase. InSeptember 1999, the state produced theresults of a survey of 37 agencies, identi-fying the agencies’ preferences/ratingsfor incentives and disincentives.3 AsExhibit 2 illustrates, funding for bonusesis the highest-rated incentive. Conversely,

restricting budget flexibility is seen as themost powerful disincentive.

The Virginia Retirement System—anagency that manages retirement benefitsfor all state employees, teachers and localgovernment employees—has introducedan integrated pay plan that links everyindividual’s performance pay with boththe departmental strategic objectives and,in turn, the agency’s strategic businessobjectives. According to agency officials,there is significant emphasis in theperformance evaluation process on bothbehaviours and the achievement ofdepartmental and agency results.

Recognizing Cross-Government Efforts

Jurisdictions are making inroads infocusing line managers’ efforts on cross-organizational and cross-jurisdictionalgoals. These attempts to change behaviour

The State of Texashas introduced a performance reward that recognizes productivity improvements and innovativeprograms across the government.

Finding out whatis important to line managers is key in designingincentive (and reward) strategies.

Jurisdictions aremaking inroads in focusing linemanagers’ efforts on cross-organizational and cross-jurisdictional goals.

2 General Appropriations Act, Seventy-sixth Legislature, RegularSession, State of Texas, 1999, Section 9-6.39, “PerformanceRewards and Penalties.”

3 The Florida Senate, Committee on Fiscal Policy, DevelopPerformance Incentives/Disincentives Strategies for All ProgramsInvolved in Performance-based Program Budgeting, InterimProject Report 2000-39 (Tallahassee, Fla., September 1999).

State of Florida Survey of Incentives andDisincentives Among Agency Heads,September 1999

Agency Ranking of Incentives• Funding for bonuses• Flexibility in salary rate/positions• Funding for technology• Flexibility in budget transfer authority• Funding for training

Agency Ranking of Disincentives• Restriction of budget flexibility• Elimination of program• Reduction of managers’ salaries• Outsourcing program• Reduction in positions• Appearances before legislature

Source: The Florida Senate, Committee on Fiscal Policy.

Exhibit 2


must be accompanied by changes inwhat is measured and rewarded.

Developing cross-government goals is a key part of the Alberta government’sstrategic planning. One of the drivers of this effort is a need for the government tointegrate the efforts across departments andget them to think “corporately.” As JulianNowicki, Deputy Minister of the ExecutiveCouncil, notes, “The business planningprocess has forced us to let go of anynotions of competing goals and agendas.”Each year, the four top cross-governmentgoals, identified as part of the three-yearbusiness plan, are linked to the compen-sation for senior executives. As Exhibit 3illustrates, the top four goals are thecorporate services centre initiative, thecorporate human resource developmentstrategy, economic development and theAboriginal policy initiative. (It is worthnoting that each year the goals arereviewed; new ones are added to thepriority list, while others are moved to a monitoring status.) These goals involvekey ministries across the government andare reflected in individual ministries’three-year business plans.

Twenty per cent of each deputy minis-ter’s pay is at risk. Seventy-five per centof that variable pay is based on achievingthe four cross-government goals, whereas25 per cent is based on individual contracts:deputy ministers across government havespecific performance contracts, both withthe Executive Council, through the officeof the Deputy to the Premier, and withtheir ministers. This process is replicated inthe individual ministries, with deputies

developing similar contracts with theirassistant deputy ministers (ADMs), andADMs with their direct reports. AsNowicki notes, “Contracts includeachieving the goals in the ministrybusiness plan, as well as demonstratingthat they have contributed to the cor-porate cross-government goals that havebeen set as priorities by elected officials.”

Acknowledging Individual and TeamEfforts

Political leaders also play a role insingling out those who have made signifi-cant progress in implementing performancemeasurement. In Texas, the Governor bringstogether all the agency heads for a half-daymeeting as a kick-off for the strategicbudgeting process. This is an opportunityto recognize individual agencies’ effortsand highlight accomplishments.

As noted, the State of Washington hasclosely linked its quality initiative withperformance measurement efforts. Eachyear, teams that have demonstratedcreative and innovative solutions toproblems, have clear and measurableresults, or have found new ways to dotheir business are singled out in a publi-cation called Governing for Results.Members of these teams receive personalletters from Governor Locke. Similarly, theGovernor uses internal conferences andpublic settings to draw attention to therecognition that the state has achieved,including its high ratings in Governingmagazine’s 1999 survey, as well as to thesuccess of individual agencies in takingup performance measurement efforts.

Developing cross-government goals is a key part of theAlberta government’sstrategic planning.

“The businessplanning process has forced us to let go of any notions of competing goals and agendas.”

Political leadersplay a role in singling out those who have made significantprogress in implementing performance measurement.


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It is essential to have a framework tosupport the process of developing andusing performance measures—to enable thelinkage between performance measures,the strategic planning and budgetingprocesses, and line managers’ use ofthese tools. These frameworks provide a process for engaging people and forenhancing communication and informationsharing. The frameworks may arise fromeither the planning or budgeting processes,or they may have their roots in these parallelprocesses. The term “architecture” connotesthe need for a well-functioning processand the importance of all parts of theprocess working together. It also demon-strates that the performance measurementapproaches need to be designed for theunique characteristics of the jurisdiction.

In most instances, responsibility fordeveloping the architecture falls to acentral agency that has been chargedwith leading the performance measure-ment efforts. Development of the per-formance measurement efforts is sharedamong several central agencies, namelythe planning and budgeting functions,the policy and strategic planning shopsand the offices of agency executives, eachof which plays a different but comple-mentary role.

Providing Support Along the Way

Each of the jurisdictions studiedrecognizes that the architecture mustreflect the current needs and capabilities ofthose involved in performance measure-ment efforts. However, they also recognizethat the architecture and processes needto be flexible and to accommodate changeand improvement as managers becomemore adept at performance measurement.In Prince William County, for example,

the executive group has introducedrefinements as managers gain greaterskill and facility in using performancemeasures in daily decision making. Each of these introductions reflects themanagement’s interest in exploring newareas that would enhance the county’scapability and results.

In the Commonwealth of Virginia, thedevelopment of a framework for strategicplanning and budgeting has evolved froma longstanding commitment to financialmanagement and budget developmentwithin the state. In the early 1990s, a reportby the Joint Legislative Audit and ReviewCommission recommended undertakingpilot projects to develop performancemeasures in some agencies. Shortlythereafter, the Planning and Performancesection within the Department of Planningand Budget was directed to provideguidance and support to agencies usingperformance measures, based on a recom-mendation that the “executive branchconduct performance measurement andstrategic planning as an integrated process.”

Acting on the Commission’s report,the Department of Planning and Budgettested performance indicators in 21 agencies.In fairly short order, the agencies noticedsignificant benefits such as “increasedunderstanding of programs and theirobjectives, increased focus on programperformance, enhanced teamwork andcoordination, promotion of interdepart-mental communication and collaborationbetween persons who do not normallywork together, encouragement for theagency to obtain input from customersand clients, and better control of programsthrough an enhanced understanding oftheir accomplishments.”1 Based partly onthese test results, the Governor mandated

The term “architecture” connotes the need for a well-functioning process and theimportance of all parts of the processworking together.

Jurisdictionsrecognize that the architecture and processes need to be flexible and to accommodatechange and improve-ment as managersbecome more adept at performance measurement.

1 “Performance Measures Pilot Project,” Commonwealth of Virginia,Department of Planning and Budget, December 1, 1993, p. ii.

3 A R C H I T E C T U R E : C R E AT I N G T H E

F R A M E W O R K S T O I N T E G R AT E P R O C E S S E S


the development of performance measuresin all state agencies and programs.

Bringing Processes Together

Strategic planning and budgeting are, by nature, very different activities.Timelines are starkly different, the kindsof thinking and decision making used ineach process are often at odds and eachprocess is likely to be “owned” by quitedifferent parts of the organization.Bringing these processes togetherrequires sensitivity to their differences.

In Texas, the first efforts to introducegreater accountability and a focus onresults saw the launch of two processreforms, one focused on improved strategicplanning and one on performance budg-eting. The emphasis on strategic planning,introduced in a 1991 House Bill, requiredthat statewide goals be set as a basis foragency plans and that agency plans becompiled into a single statewide plan. Allexecutive branch agencies were requiredto prepare five-year strategic plans.

The successful integration of the twoprocesses can be attributed to a collabo-rative working relationship between thetwo lead central agencies—the LegislativeBudget Board and the Governor’s Officeof Budget and Planning. According toJohn Barton, Manager, Fiscal Analysisand Reporting at the Legislative BudgetBoard, integration was greatly helped bythe fact that the state chose to pilot thisapproach not with a few state agenciesbut with all 250 agencies and institutionsof higher education at the same time. To help support this transition, the stateused a steering committee drawn fromstaff of the two key central agencies,other state agencies and outside expertsfrom other jurisdictions. With this sup-port, the state was able to convert allagencies to the new approach within 14 months.

The overall framework for the strategicbudgeting effort has three components:• Strategic planning—the broad direction

is articulated by the Governor and setout in a statewide plan, and detailedfive-year plans are developed by theagencies; agency plans are tied to thestatewide plan and include perform-ance measures.

• Performance budgeting—appropria-tions requests are made by agencies,including dollar amounts and projectedperformance, and appropriations aremade by the legislature.

• Performance monitoring—agenciesreport on performance against targetsand provide explanations; the TexasLegislative Budget Board carries outperformance assessments, which includesummaries of expenditures and per-formance; and the state auditor certifiesmeasures for selected agencies, verifyingthe accuracy of reported performance.Each of these processes is key in the

state’s biennial cycle, as illustrated inExhibit 4. Placing equal emphasis on thethree components throughout the twoyears has been key to the success of this

Strategic planningand budgeting are very differentactivities. Bringingthem together requires sensitivity to their differences.

In Texas, thesuccessful integration of strategic planning and budgeting can be attributed to a collaborativeworking relationshipbetween the two lead central agencies.

Performance Budgeting . . . anApproach to Integration

For a number of jurisdictions across NorthAmerica, performance budgeting has become apreferred approach. Performance budgeting linksresults with allocations of funding. The CaliforniaLegislative Analyst’s Office defines it as follows: “Theallocation of resources is based on an expectation ofperformance levels, where performance is measured in specific, meaningful terms. It differs from thetraditional approach to budgeting in that it focuses on outcomes rather than inputs or processes whendeciding how to allocate resources.”1

1 Jim Carney and Carlo Grifone, Performance Budgeting: A StepTowards Accountability (KPMG, October 1996).


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framework. Clear communication regarding the purpose and demands of each component has also helped tofocus line managers on an integrated and balanced approach.

Helping Line Managers See the Linkage

Jurisdictions have found that there isconsiderable value in creating standard-ized approaches to strategic planningand budgeting processes. The develop-ment of templates, models and diagramshas helped considerably in reducingcomplexity and getting people to under-stand the linkages between the processes.Texas, for example, has developed astrategic planning template to guide theuse of performance measures in agencies

(see Exhibit 5). There are nine tiers in thetemplate: the top two tiers are developedby the Governor’s Office of Budget andPlanning and the Legislative Budget Boardand consist of the vision, mission andphilosophy of the state and a set of state-wide goals and benchmarks. The bench-marks relate to statewide goals and mayinvolve co-ordination among agencies withsimilar functions. These elements or “state-ments of purpose” provide a foundationfor developing the mission, philosophyand goals of each state agency.

In the 1998–1999 biennium, for example,the vision is supported by eight goalsand 85 benchmarks. The priority goalsare in the following areas: education(public schools and higher education),

The developmentof templates, models and diagrams has helped considerably in reducing complexity and getting people tounderstand thelinkages between the processes.

Strategic Planning Template: The Texas Framework

Source: State of Texas.

Exhibit 5

Vision, mission, philosophy

Statewide goals and benchmarks

Agency mission

Agency philosophy

External/internal assessment

Agency goals

Objectives andoutcome measures

Strategies and output,efficiency, explanatory

measures

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health and human services, public safetyand criminal justice, economic develop-ment, natural resources, general govern-ment and regulatory. These benchmarksprovide numerical indicators for assessingthe state’s progress in meeting its goals.

The Strategic Planning and BudgetingSystem in Texas is the process that linksthe components in the template. AsExhibit 6 illustrates, the mission of eachagency cascades into goals, objectivesand strategies. At the higher level, goalsand objectives address “what an agencydoes.” These objectives are tied to outcomemeasures. As strategies are developed atthe agency or operational level, they areconcerned with output, efficiency andinput measures. These strategies helpaddress “how an agency does it.”

The next part of the template, the agencymission and philosophy, is developed by agencies themselves and is made upof “statements of purpose.” These arefollowed by “statements of direction,”which include agency goals, objectives(defined by outcome measures) andstrategies (defined by output, efficiencyand explanatory measures). These state-ments of direction are then linked intothe budget structure. There is an analysisof how current resources will be used tomeet current and expected future needs, aswell as an assessment of any additionalresources that will be needed to meetthese needs.

Exhibit 7 illustrates how the measuresin the General Appropriations Act reflectthose set out in an agency’s strategic plan.The Legislative Budget Board and theGovernor’s Office of Budget and Planningselect “key” measures from all of theperformance measures in the strategicplan and include these in the GeneralAppropriations Act as part of the agency’sfunding pattern. Exhibit 8 shows how the Act sets out goals, objectives (with

outcome measures) and strategies (with output, efficiency and explanatorymeasures) for one particular agency, inthis case, the Texas Commission on Alcoholand Drug Abuse. The goal depicted inExhibit 8 (services distribution) is one ofthree identified for the agency (the othertwo are quality assurance and indirectadministration). The Act also details thenegotiated performance targets and levelof funding allocated for each componentof the strategic plan.

The last part of the template consistsof the agency action plans, which detailhow a strategy will be implemented andinclude staff assignments, materialresource allocation and schedules forcompletion. The performance measuresincluded in the action plans are usedwithin agencies to support operational,day-to-day management.

In many jurisdictions, the budgetprocess used to take place in isolation from the strategic planning process. Theshift to performance budgeting hasmeant that the line-item, input-basedbudget process has been replaced by onebased on agency priorities and goals.This shift has also played an importantrole in moving the budget process awayfrom simply being a repeat of last year’sprocess—or one driven by special inter-ests—to one in which resources allocatedare tied to results achieved and whereagency managers can monitor theprogress of their agencies.

In Virginia, the performance budgetingprocess integrates agencies’ plans, budgetsand results. Within each agency, a strategicplan is developed, setting out four-yeargoals and objectives. Strategies aredeveloped, and those requiring fundingbecome the basis for budget requests. Asone manager noted, “In Virginia, we havemade the linkage between the budgetsegment and the plan clear in linking

The StrategicPlanning andBudgeting System in Texas is the process that links the components in the template.

The LegislativeBudget Board and the Governor’sOffice of Budget and Planning select“key” measures from all of the performance measures in thestrategic plan andinclude these in the GeneralAppropriations Act as part of the agency’sfunding pattern.


Implementing the Statewide Vision Through Agencies’ Plans


Exhibit 6

Strategy 01-01-01OutputEfficiencyInput







Objective 01-01Outcome




Goal 01

Goal 02

Agencymission

Statewide vision

Statewide mission

Statewide goals

“WHAT WE DO” “HOW WE DO IT”

Linking Strategic Planning and Performance Budgeting


Exhibit 7

Strategic plans

MissionPhilosophyExternal/internal assessmentAgency goalsObjectives

Strategies

Performance measures

Outcome measuresQuantifiable results measuring how the public benefits by the agency’s meeting the objective

Output measuresQuantity of agency workload and work product as it pursues its strategies

Efficiency measuresAgency workload unit costs or time for completion

Explanatory measuresExternal factors relating to agency operations

General Appropriations Act

Performance targets

Items of appropriation and performance targets

Performance targets


Linking Strategic Planning and Performance Budgeting: The General Appropriations Act

Texas Commission on Alcohol and Drug Abuse For the Years Ending08/31/00 08/31/01

GOAL A. GOAL: Services Distribution

OBJECTIVE Provide for the delivery of substance abuse prevention, intervention and treatment services based on need throughout the state.

Outcome Outcome (Results/Impact):measures • Per cent of treatment providers who also provide family services 35% 40%

• Per cent of youth completing treatment programs who report they are abstinent when contacted following discharge 87% 87%

• Per cent of unemployed adults completing treatment programs who report they are employed when contacted following discharge 59% 59%

• Per cent of youth who report they are abstinent when contacted following discharge 83% 83%• Per cent of adults entering treatment programs who report they are abstinent when

contacted following discharge 77% 77%

A.1.1. STRATEGY: Prevention Services $31,430,432 $31,430,382Implement community and family-based prevention services to increase resilience and reduce the risk of chemical use, abuse and dependency in Texas.

Output Output (Volume):measures Number of adults served in prevention programs 68,828 68,828

Number of youth served in prevention programs 183,259 183,259Efficiency Efficiencies:measures Average cost per youth for prevention services 120.96 120.96

Average cost per adult for prevention services 134.59 134.59

A.1.2. STRATEGY: Intervention Services $27,265,362 $27,260,196Implement community and family-based intervention services to interrupt the illegal use of alcohol, tobacco and other drugs by youth and to break the cycle of harmful use of legal substances and all use of illegal substances by adults.

Output Output (Volume):measures Number of adults served in intervention programs 208,482 208,443

Number of youth served in intervention programs 201,996 201,957

STRATEGIES A.1.3. STRATEGY: Treatment Services $86,195,863 $85,346,333Implement a continuum of community and family-based treatment and related services for chemically dependent persons.

Output Output (Volume):measures Per cent of adults completing treatment programs 70% 70%

Per cent of youth completing treatment programs 60% 60%Efficiency Efficiencies:measures Average cost per adult served in treatment programs 2,254 2,254

Average cost per youth served in treatment programs 4,857 4,857Explanatory Explanatory:measures Number of adults served in treatment programs 27,896 27,520

Number of youth served in treatment programs 3,510 3,510Number of dual-diagnosis clients served 5,350 5,350

A.1.4. STRATEGY: Criminal Justice Treatment $6,500,000 $6,500,000Provide criminal justice-based chemical dependency services.

A.2.1. STRATEGY: Compulsive Gambling $375,000 $375,000Provide problem gambling awareness and prevention services.

Output Output (Volume):measure Number of telephone calls to gambling prevention hotline 45,863 45,863

TOTAL, GOAL A: Services Distribution $151,766,657 $150,911,911

Performance targets Items of appropriation

Source: General Appropriations Act (2000–2001), State of Texas.

Exhibit 8


financial resources to goals. . . . This hasgreatly reduced the translation from onecomponent to another. . . . People ’get’ it.”

Exhibit 9 illustrates the linkage betweenthe three components. As Herb Hill,Director of Strategic Planning, Researchand Evaluation within the Department ofPlanning and Budget, notes, “We don’twant agencies to see performance measure-ment and strategic planning just as a budgetprocess; instead, we need to recognizethe dis-integration that has taken placebetween these three processes.”

The agency strategic plan focuses on identifying the important activities

for the agency, links with the Governor’sinitiatives, how and where to redistributedollars and/or people and how tomeasure the success of efforts. The draft plan within each agency is pre-sented by the agency head to theGovernor, Cabinet and Chief of Staff for final approval.

The second component, the budgets,define the resources needed to supportthe Governor’s initiatives, the costs ofprograms and services, the costs of policyand operational alternatives and howdollars and staffing relate to outcomes.Budgets are developed at the program,

“We don’t wantagencies to see performance measurement and strategic planning just as a budget process;instead, we need to recognize the dis-integration that has taken place between thesethree processes.”

Linking Statewide Goals to Agency Goals

Jurisdictions are emphasizing alignment in helping line managers see how their agencies’ efforts are linked tojurisdiction-wide goals. For example, in Texas, one of the eight statewide goals is education (within the public schools):“to ensure that all students in the public education system learn to read at Grade 3 level by the end of third grade,continue reading at grade level, demonstrate exemplary performance in foundation subjects and acquire the knowledgeand skills needed to be responsible and independent Texans.”1 There are 11 benchmarks associated with achieving this goal:• percentage of students from third grade up who are able to read at or above grade level;• percentage of students who master the foundation subjects of reading, English language arts, mathematics, social

studies and science;• high school graduation rate;• percentage of students who demonstrate satisfactory performance on the Texas Assessment of Academic Skills (TAAS);• state share of public education costs;• violence rate in schools;• percentage of students who attend schools or districts rated as “recognized” or “exemplary”;• number of students served under local governance of choice options (charter schools, home-rule districts,

intra-district transfers, etc.);• percentage of high school graduates employed, enrolled in post-secondary education or enlisted in the military;• percentage of higher education freshmen from Texas high schools needing remediation; and• percentage of eligible juniors and seniors taking Advanced Placement/Baccalaureate exams.

How do the mission, strategic plan and performance measures for the Texas Education Agency reflect the statewidegoals and benchmarks? The mission of the agency is to “build the capacity for excellence in the Texas public educationsystem and to hold the system accountable for providing all students with a quality education that enables them toachieve their full potential.”

The agency links its own benchmarks to the state benchmarks. For example, with respect to the state benchmark“percentage of students who demonstrate satisfactory performance on the TAAS,” the agency uses the benchmark“percentage of students passing all tests taken.” Within the agency, there are four criteria for developing performancebenchmarks: they must (1) correspond to state benchmarks, (2) be roughly equivalent to performance measures reportednationally and in other states, (3) have been part of the agency’s strategic plan for at least one biennium and (4) be listedas a key measure in the most recent General Appropriations Act.

1 Agency Strategic Plan for the 1999–2003 Period (Texas Education Agency, June 1998).


subprogram and activity levels, providingclarity about funding needs.

The third component is the performancemeasures. Performance measures arerelated to the Governor’s initiatives (asoutlined in the statewide strategic plan),the agency’s mission and mandates, toppriorities of customers, big budget itemsand priorities of the administration. Thesemeasures become the basis for requestsfor increased funding. Each executiveagency must develop three to five per-formance measures that will be used toassess the agency’s success in achievingthe mission and objectives. The require-ment for at least one outcome measureunderscores the view in the state that thebest indicators of performance relate to

outcomes. Performance measures providean indication of whether the Governor’sinitiatives are succeeding, whethercitizens are being satisfied and whetheragencies are serving their purpose.

The budget instructions to eachagency emphasize the development ofgoals, objectives and strategies by agenciesand a focus on the link between theseand performance measures. Agenciesthat want to expand or change the scopeof programs or implement new ones mustsubmit their request with a proposedperformance measure and target. If anagency is unable to justify its requestwith a clear demonstration of whatadditional funds would produce, therequest is not approved.

Agencies thatwant to expand or change the scope of programs or implement new ones must submit their request with a proposedperformance measure and target.

Performance Budgeting: Integrating the Components

Source: Commonwealth of Virginia.

Exhibit 9

Programs/subprograms andranked activities:• Current services plan• Decision packages• Full-time equivalents• Linked to plan• Strategies

Performance measures:• Governor’s initiatives• Agency mission• Mandates• Customer priorities• Big budget items• Additional funding requests• Activity-based (agency level)

Draft plan• Mission• Mandates• Governor’s

priorities• Constituents• Activities• SWOTs• Critical issues• Goals• Objectives• Strategies

Strategic briefing

Approved plan

Plans

Measures

Budgets


The single most important reason fordeveloping performance informationsystems is to enable decision makers tomake informed judgements about theextent to which outputs are helpingachieve the government’s outcomes. As governments gain proficiency in theuse of performance measurement, theyneed to develop information systems thatensure that data can be collected, analysed,shared and used effectively and that thisinformation can be communicated to allstakeholders. It is equally important thatdecision makers have a level of comfortand facility with using and interpretingperformance information.

Jurisdictions are exploring new ways ofcommunicating information to all stake-holders, recognizing that ease of use, clarityand simple language are important in help-ing decision makers respond to requests,make comparisons and decisions and feelconfident about the accuracy and relevanceof the information being presented.

Shaping Supportive Information Systems

In developing information systems to support the use of performance

measurement, jurisdictions must bridgethe divide between information that isalready being collected and used andinformation that is needed to aid deci-sion making. In most organizations,performance measures and data collec-tion have already been in place for sometime, and line managers must alreadycontend with a huge volume of infor-mation. Thus, organizations must recognize the additional burden ofcollecting and auditing information fordecision making and provide sufficientinfrastructure and resources.

While it is most often a central agencythat has overall responsibility for theinformation system, the users are pre-dominantly managers with agencies and departments. The design of thesystem must take into account the needsof all of its users: those who provideinput, those who analyse the informationand those who gain from the reportsproduced. Gaining a clear understandingof their needs is vital. At the same time,the system must be flexible enough to accommodate changes in user profi-ciency and technology. As well, thosedesigning the system must understandthe value of common definitions and be clear about how data are used andinterpreted.

The Virginia Department of Planningand Budget has developed a database toorganize performance information andtrack progress toward targets. Ratherthan buy an off-the-shelf system, theDepartment designed the system in-house, consulting key customers includ-ing Cabinet officials, agency heads andthe Governor’s policy office. The systemprovides valuable historical informa-tion—such as insights regarding pastfunding and performance—and severallevels of detail for different uses. TheDepartment has opted for central data

Governmentsneed to developinformation systems that ensurethat data can becollected, analysed,shared and usedeffectively and that this information can be communicatedto all stakeholders.

Organizations must recognize the additional burden of collectingand auditing information fordecision making and provide sufficient infrastructure and resources.

4 D E V E L O P I N G A N D C O M M U N I C AT I N G

IN F O R M AT I O N: BU I L D I N G SU P P O RT SY S T E M S


In the City of Calgary, citizen satisfaction surveyshave been a hallmark of the city’s efforts for nearly a decade. However, in recent years there has been amuch stronger emphasis on using the survey data inplanning and to set budget priorities. Information andfeedback are gathered on quality, efficiency, costs andbudget priorities.

The city carries out regular surveys on the qualityof services such as roads. Between 1991 and 1998,citizens’ ratings of street pavement quality fell from anaverage of 8.1 (on a scale of 10) to 6.9. Because ofthis finding, the most recent municipal budgetcontained an additional $1 million to improve thisservice, a 20 per cent increase. City managers notedthat this increase would have been unlikely without thecritical supporting data.


entry and is training budget analysts touse the system.1

In the State of Texas, the volume ofmeasures being used in the state system(approximately 8,000 measures across 250 agencies in the 1998–1999 biennium)and the size of the government arguedstrongly for an automated system. Thestate has developed the AutomatedBudgeting and Evaluation System for Texas(ABEST), maintained by the LegislativeBudget Board, into which agencies reportperformance data on a quarterly andannual basis. The system is used by theLegislative Budget Board to prepare thebiennial budget and to track the budgetarydecisions made at each stage as part ofthe appropriations cycle.

Managing the Volume of Measures

In most organizations, managersalready have access to most of the infor-mation they need to construct a perform-ance measurement system. A majorchallenge is developing a system robustenough to manage all that information.

Moreover, managers usually stress thatorganizations should measure only whatthey want to manage.2 In Virginia, thedecision to limit the absolute number of measures has been a strength for theCommonwealth; as Herb Hill of theDepartment of Planning and Budget notes,“In contrast to some jurisdictions that areusing an extensive set of measures, Virginiahas made a deliberate decision to workwith a manageable set of measures. . . .We have found that our approach helpsagencies to prioritize more easily andmakes the tracking of measures simpler.”

The most effective information systemshelp users sort out the different kinds of

measures, indicate their relevance tospecific decisions and clarify how theycan be used and interpreted. Governmentdecision makers stress that no organiza-tion has the luxury of collecting data justfor the sake of it; instead, the definitionand balance of measures should give ascomprehensive a picture as possible.

Communicating the Information

Jurisdictions stress that the informationmust allow for effective communicationto internal and external stakeholders.Developing tools and approaches to aidline managers in preparing and interpretinginformation is an important means ofenhancing communication and under-standing within agencies.

Government home pages have been aboon to effective communication, allowingfor regular updating, interaction withcitizens and sharing among jurisdictionsaround the world.

The Virginia Department of Planningand Budget has created a set of tools andapproaches for line managers, providingthem with base and target information for key measures, in formats that theycan readily use. The Department has alsorecently developed an Internet ResultsManagement System that allows accessto statewide leadership and performancedata in a user-friendly format; data entryand management are done through aWeb-enabled technology. The systemdraws together planning and perform-ance data from agencies, financial datafrom agencies and priorities data fromthe state’s overall plan. It also providesup-to-date information on the Governor’skey initiatives, the Governor’s strategicplan, state quality of life indicators and

“Virginia has made a deliberatedecision to work with a manageable set of measures. . . . We have found that our approach helpsagencies to prioritizemore easily and makes the tracking of measures simpler.”

Governmentdecision makers stress that no organization has the luxury of collecting data just for the sake of it; instead, the definition andbalance of measuresshould give as comprehensive apicture as possible.

1 Herb Hill, Jr., and K. Michael Shook, “Virginia’s Results Manager,”The New Public Innovator (Fall 1998), pp. 30–33.

2 The Conference Board, Inc., Case Studies in StrategicPerformance Measurement, Report 1176-97-CR (New York: TheConference Board, Inc., 1997), pp. 11–12.

Activity-Based Costing: A Tool for Better Decision Making

One of the biggest challenges that managers face in using data is ensuring that they have relevant, robust andaccurate data and that they can use this information to make better decisions—whether choosing a particular policyoption, determining what level of services to provide or deciding where resources can most effectively be allocated.

To address this challenge, several jurisdictions included in the study have turned to activity-based costing (ABC).This management tool breaks down the costs of an activity, including physical inputs, labour and overhead costs. Itenables organizations to determine what it costs to deliver a program or service, make comparisons with other jurisdic-tions and over time, and better gauge efficiency. In Texas, for example, breaking down the costs of services anddeveloping a greater understanding of marginal costs has enhanced decision making about the costs of providing serviceand the marginal costs of meeting the needs of all possible service recipients.

Managers using ABC are able to see where they might be able to make better choices and whether they are getting thebest value for money. As well, they are able to determine not only where money might be saved, but also why the costs ofa particular service or activity are going up. One of the most compelling benefits of ABC is that it focuses attention on thefull cost of the activity rather than line items. This can help facilitate integration across the organization, as managersrecognize their shared involvement in undertaking activities.

In the Regional Municipality of Peel, ABC is a key part of the approach to performance measurement and informs theprogram planning, costing, budgeting, reporting and evaluation processes. Because of the importance of regionalcomparisons in the municipal context, the introduction of ABC has been a valuable asset. According to Dan Labrecque,Director of Finance in the region, as understanding of the costs of service provision increases, there is more support forshifting away from a traditional management structure (in which divisions bear no direct relationship to programs) to onein which programs and program activities become the building blocks for the region’s service efforts. The program “map”for waste management, shown below, provides one illustration of this shift.

Developing common business maps across the organization is an important means of driving accountability withinthe organization and creating a common language. As Labrecque notes, the region wants to have information systems inplace to ensure that there are indicators down to the operating level and that line managers can clearly see how their ownefforts link with those of other parts of the organization to produce particular results.

Using Program Maps in Peel

Source: Regional Municipality of Peel.


Capital financingProgram support

Residential Industrial, commercial, institutional

Disposal

Landfill

Incineration

ExportExport

Incineration

Landfill

DisposalProcessing

Blue box

Organics

Depots

White goods

Garbage

Organics

Blue box

Collection

Wastemanagement


agency results, as well as resources such as interactive performance managementtraining and the CommonwealthPerformance Management Award.

Providing information about agencyor government-wide goals and results informats that are easy to use and access isan important way of getting the messageout to a wider audience. It also helpsensure that recipients can make practicaluse of the information and respond to itif necessary. In Alberta, steps have beentaken to make it easier for the public andlegislators to understand and access thegovernment’s business plan: citizens may now consult Planning the AlbertaAdvantage, a pocket-sized booklet thatsummarizes the 2000–2003 business planand provides an alternative to the fullbusiness plan, which is several inchesthick. As Rich Goodkey, Team Leader of the Performance Measurement Team

in the Treasury, notes, this initiativeresponds to the government’s desire to communicate its agenda to citizens.

Similarly, the Regional Municipality of Peel is shifting to providing Councilmembers with highlights and key pointsregarding performance, rather than inun-dating them with weighty reports. Focusingpoliticians on results and highlightingthe areas for decision making helps themmake more effective use of their time.

Publishing agency or departmentalresults in an annual-report-type format orcolour brochure can help ensure that keygroups will review the material. It canalso serve to communicate complex andsometimes rather dull numerical data inan interesting and more memorable way.Moreover, communicating progress onspecific initiatives can be an importantmeans of connecting with stakeholdersand direct clients.

Focusingpoliticians on results and highlighting the areas for decisionmaking helps themmake more effectiveuse of their time.


As jurisdictions implement a results-based management approach, there is aneed for training and support at all levels.This training and support must addressthe technical aspects of performancemeasurement and strategic planning aswell as the softer aspects—accommodatingthe cultural change issues. Cultural changeissues can present at least as many chal-lenges as technical issues: people muststruggle with new ways of looking at theobjectives of programs and services, aswell as with a changed emphasis in theirresponsibilities and accountabilities.

In the jurisdictions studied, training andsupport have focused on (1) drawing onoutside experts and resources and identi-fying best practices within and withoutand (2) providing corporate training andexecutive development resources.

Drawing on Outside Resources

Experienced external practitioners helpincrease the credibility of new perform-ance measurement systems, particularlyamong those who are actually usingthem. The experience of several jurisdic-tions, though, is that this outside expertisemust be used judiciously. In the early stages,it may be that a motivational resource isneeded to persuade people of the valueof performance measurement. Later on,an experienced hand can share specificlessons learned and help people to seethat obstacles can quite easily be overcome.

When it first introduced performancemeasurement across its departments, theCity of Calgary used an outside expert to provide perspective and explain thetangible benefits of integrating performancemeasurement into the city’s managerialsystems. This individual was broughtback to provide more intensive training oneyear into the implementation, with positiveresults. As well, to build support forperformance measurement and reporting

at the political level, the city invited acouncil member from Portland, Oregon,to share experiences with and underscorethe benefits of performance measurementfor political leaders in Calgary.

Within the “community” of jurisdictionsthat have implemented performancemeasurement across North America andaround the world, there has been activesharing of methodologies, processes,successes and learning. Particularly inthe government sector, there has been a great willingness to exchange leadingpractices, lessons learned and failuresencountered. Sharing through conferences,face-to-face consultations and bench-marking of best practices has helped toadvance the progress of several jurisdic-tions included in the study. The Internethas also been a key contributor to thissharing. Major conferences such as theAustin, Texas, Managing for Resultsconferences (the third one took place inApril 2000) have provided an importantfocal point for communicating the valueof performance measurement.

Helping other jurisdictions get a “legup” is not seen as giving away competitivesecrets; instead, there is a widely held viewthat the more widespread good practices inperformance measurement are, the betterfor all concerned. Thus, the Commonwealthof Virginia and Prince William Countyhave found common ground in movingforward their initiatives, as have Calgaryand the Province of Alberta. When thesedifferent levels of government need towork co-operatively on shared outcomes,the process proceeds far more quickly.

Within jurisdictions, the commitmentand leadership of certain individuals isoften held up as an example to others. In some cases, these individuals may bemoved around the system, particularly to help agencies implement performancemeasurement more effectively.

Experiencedexternal practitioners help increase thecredibility of newperformance measurement systems, particularly among those who are actually using them.

Helping otherjurisdictions get a “leg up” is not seen as giving awaycompetitive secrets;instead, there is awidely held view thatthe more widespreadgood practices inperformance measurement are, the better for allconcerned.

5 B U I L D I N G T H E R I G H T C A PA B I L I T I E S :H E L P I N G M A N A G E R S A C T E F F E C T I V E LY


Providing Corporate Training and Executive Development

Several jurisdictions provide executivedevelopment courses to help senior andmiddle management lead performancemeasurement initiatives. These coursesprovide an opportunity for officials at alllevels to gain practical understanding ofperformance measurement, to link theseefforts to other management initiativesand to tap into a community. Often, thesenetworks will extend beyond their ownorganizations and the jurisdiction itself,drawing on a network of academics,practitioners and observers from other areas.

In the State of Texas, the Governor’sCenter on Management Developmentoffers training services for senior andmiddle managers, focusing on manage-ment issues including strategic planning,human resources and operational plan-ning. It has also established training forlegislators and agency heads to helpthem understand the importance ofperformance measurement and strategicbudgeting and to build their commitment.

Similarly, in the Commonwealth ofVirginia, the Virginia Executive LeadershipInstitute provides development for seniorexecutives within agencies. The Depart-ment of Planning and Budget has strongconnections with the Institute. In addition,the Commonwealth Management Institute

provides certification for managers inkey managerial competencies.

In several jurisdictions, various kindsof resource materials, handbooks andtemplates have been developed and areeasily accessible on the government’shome page. In Virginia, a Handbook ofPlanning and Performance has been devel-oped for state agencies and institutions.Areas covered include background onand descriptions of strategic planning, aswell as pointers and reference materialon getting started, defining and selectingmeasures, collecting data and using per-formance measurement as a managementtool. There is also background informationon decision-making tools. Likewise, theState of Texas has developed extensiveresources designed to educate line managerson the “art and science” of performancemeasurement and provides regularupdates on each agency’s progress.

In the Province of Alberta, Rich Goodkey,leader of the Performance MeasurementTeam within the Treasury, provides aresource to all government departmentson leading practices throughout theworld. In addition to sharing his ownjurisdiction’s progress with decisionmakers in other governments, he plays a vital role in introducing innovativepractices and methodologies across hisown government’s departments.

Severaljurisdictions provide executivedevelopment courses to help senior and middlemanagement lead performancemeasurement initiatives.

In Virginia,a Handbook ofPlanning andPerformance has been developed forstate agencies andinstitutions.


Shifting the focus to results requiresmanagers to think differently about theactivities that they are undertaking, theresults that they are trying to achieve and how they can best ensure that theseresults are achieved.

In the jurisdictions studied, significanteffort was devoted to helping line man-agers understand the different kinds ofmeasures, gain proficiency in developingmeasures, use this information to makedecisions and report progress and resultsto various stakeholders. The breakthroughsin getting people to use performanceinformation most effectively have comefrom helping them to see the largerpicture, that is, the linkages between theinputs and activities and final outcomes.Moreover, in those jurisdictions whereline managers understand that multipleplayers and agencies influence theachievement of an outcome, muchprogress has been made in developing a well-rounded set of measures.

Understanding Measures and HowThey Fit Together

As agencies gain greater proficiency inidentifying and using performance meas-ures, managers shift their focus frominput or activity measures to a balancedset of measures, including input, outputand outcome measures. One of thebiggest challenges for line managers isunderstanding the different kinds ofmeasures, what they mean and how they relate to each other.

A particular challenge for line managersis how to identify measures for program

and policy areas that are outside theagency’s immediate control or are lesstransactional, more customized or dif-ferentiate between immediate outcomesand longer-term outcomes.1

Gaining a true picture of what activi-ties or events have the most significantimpact on a particular measure is no easy feat. However, practitioners in manyof the jurisdictions studied were fullyaware of these challenges and ardentlysupported the need to push the frontiersof experience, to learn from thoughtfuleffort and to see performance measures,even in the more policy-related areas, asa challenge and not a hurdle. Kirk Jonas,Deputy Director of Virginia’s Joint Legis-lative Audit and Review Commission,acknowledges that “performance measure-ment is as often an art as a science. Theanalogy of sports can be instructive.Some sports are amenable to preciseperformance measurement. Many trackand field events fall into this category. A sub-10-second 100-metre dash is signifi-cant. As sports become more complex,however, measurement becomes moresubjective—figure skating, diving andsimilar sports all present problematicscoring systems and biases.”2

Accordingly, in several jurisdictions,agency managers are encouraged to pushtheir thinking regarding outcome meas-ures, even if these measures are initialoutcomes or “proxy” outcomes.

Helping managers to explore the linkagesbetween types of measures also encour-ages them to identify and refine outcomemeasures that reflect citizens’ needs.

The breakthroughs in getting people touse performanceinformation mosteffectively have come from helpingthem to see the largerpicture, that is, thelinkages between theinputs and activitiesand final outcomes.

In several jurisdictions, agency managers are encouraged to push their thinking regardingoutcome measures,even if these measures are initialoutcomes or proxyoutcomes.

6 C A P I TA L I Z I N G O N C A PA C I T Y: U S I N G P E R F O R M A N C E I N F O R M AT I O NI N D E C I S I O N M A K I N G

1 Several authors have pointed out that the programs or servicesthat governments provide range from the largely transactional orstandardized (e.g., providing permits, licences, tax returns) to themore customized and less standardized (e.g., health care,educational services) to the even less tangible and relativelyunpredictable (e.g., policy advice, regulatory efforts). See, forexample, Christopher Pollitt, Integrating Financial Management

and Performance Management (Paris: Public ManagementCommittee of the OECD, 1999).

2 Richard Kirk Jonas, “The Development of Performance Measuresfor Virginia Financial Management and Oversight,” University ofVirginia Newsletter, vol. 72, no. 2 (Feb./March 1996), p. 7.


One of the most useful methodologiesis the logic model or value chain, whichlinks different levels of measures. Thismodel, shown in Exhibit 10, helps man-agers to understand how changes occurthrough mapping the causal relationshipsbetween actions and results at each pointin the model. Organizations make use of this model in developing strategiesand plans to bring about change, to help identify what kind of performanceinformation may be needed, and as ameans of monitoring performance.

In the State of Washington, arrayingthe various parts of the value chainreinforces how each component is linkedto the next—both in moving towardoutcomes and in connecting back to thedrivers and resources that are in place. In helping agency managers understand

how to think about this model, LindaSteinmann, who leads performancemeasurement and strategic planning inthe State of Washington’s Office ofFinancial Management, points out thatthe question to be asked in understandingeach of the left-to-right linkages is “whyis this desirable?”, whereas the questionto be asked in understanding the achieve-ment of outcomes is “how do we createthis result?”

The logic model has proven useful inunderstanding the different levels ofbenefits that result for service recipients.3

It helps managers identify the differentlevels of outcomes, that is, initial, inter-mediate and longer term, and the linkagesbetween them. Information about thesedifferent levels of outcomes is valuable in getting line managers to work with

The logic modelhelps managersidentify the different levels ofoutcomes, that is,initial, intermediateand longer term, and the linkagesbetween them.

The Value Chain: Understanding the Linkages

Immediate Intermediate UltimateDrivers Inputs Activities Outputs outcomes outcomes outcomes

External $$ Agency Products Customer Chain of Societalcauses _______ processes _______ service events results

_______ Full-time Services results _______Statutory equivalents _______ Mission-authority _______ Employee level

Information results resultstechnology ______________ ProcessFacilities vital signs

Map forward from inputs and activities to answer: “Why is this desirable?”

Map backwards from high-level outcomes to answer: “How to create this result?”

Source: State of Washington.

Exhibit 10

3 The program logic model has been pioneered by the United Wayto help its agencies identify and measure program outcomes. SeeHarry Hatry, Thérèse van Houten, Margaret C. Platz and Martha

Taylor Greenway, Measuring Program Outcomes: A PracticalApproach (Alexandria, Va.: United Way of America, 1996).


measures that are further and furtheroutside their control, but that arenonetheless influenced by their efforts.

A Focus on Outcomes: Integrating Effort

Developing the right measures is halfthe battle—the other half is helpingmanagers to make effective decisionsbased on these measures. Managers needto see that their actions and decisions caninfluence the achievement of measuresand targets while understanding thatthere are multiple players influencing the achievement of a given outcome.

As governments implement perform-ance measurement frameworks, theyrealize that only in very rare instances canoutcomes of significance to service recipi-ents be achieved solely by one departmentor agency. Moreover, governments areacutely aware that they must work withother players and sectors to define andachieve the necessary level of results.

Each of the jurisdictions studied recog-nizes that individual departmental oragency efforts need to contribute to largerpublic policy objectives but that identifyingthe specific contribution of a department or agency may be a challenge. They alsounderstand that their task will be easierif measures and outcomes are developedin a holistic and integrated way.

In the Province of Alberta, the govern-ment’s specific goals have been explicitlytied to initiatives taking place within theministries across the government. Thegovernment’s actions focus on three corebusinesses: people, prosperity and preser-vation. The government-wide businessplan specifies 19 goals relating to thesecore businesses. Strategies are identifiedto ensure that the goals are accomplished.The strategies themselves are linked to themission and strategies of the individualministries; this helps to ensure alignmentbetween what the government says it

will try to accomplish and the prioritiesand resources that are attached to accom-plishing these strategies.

The horizontal linkages are made explicitthrough the identification of those min-istries that play a role in accomplishingthe government-wide plan. The plan hasresulted in the development of 26 coreperformance measures, which provideguidance for the development of measureswithin ministries. Exhibit 11 provides apartial example of the goals, measuresand targets of the 2000–2003 government-wide business plan. Each ministry reflectsthe relevant goals in the development ofits own ministry business plans.

The government-wide business plan is also explicitly linked to specific goalsthat have been identified for the cross-government initiatives. For example, oneof the goals of the government’s plan is“Children will be well cared for, safe,successful at learning and healthy.” Thisgoal is tied specifically to the cross-government Alberta Children’s ServiceInitiative, which shares the same goals.Ministry champions include Children’sServices, Health and Wellness, andLearning, each ministry having strategiesand targets that will help the provincemove toward the shared goals.

In the State of Texas, agencies that havecommon goals, are working with the sameclients or have responsibility for cross-cutting efforts such as education recognizethe value of working together. Thus, thereare a number of areas where agencies aredeveloping “intra-plan” benchmarks toimprove analysis of the effectiveness ofdifferent programs. For example, as DanArrigona, Director of Strategic Planningfor the Texas Education Agency, notes,adult education is handled through anumber of service providers includingadult education programs, community-based programs and prison programs:

Governmentsrealize that only in very rare instances can outcomes ofsignificance to service recipientsbe achieved solely by one departmentor agency.

In the Provinceof Alberta, the government’s specific goals have been explicitlytied to initiativestaking place within the ministries acrossthe government.


“We can set the same performance targetfor each program, then analyse variancesin achievement across the programs.”

In another program area, the agenciesthat focus on health and human servicesare clustered together under the umbrellaof the Health and Human ServicesCommission. Each of the 13 agenciesdevelops its own budget and plan, thenan overall budget and plan is developedcollectively. Agencies work together toidentify broad issues and areas forfunding. Gail Brooks, Director ofStrategic Planning at the Department ofHuman Services, notes that “there isconsiderable value in having commonterminology and expectations . . . youcan compare across agencies.”

Helping Line Managers Make DecisionsA priority area in performance measure-

ment is helping people use informationto make good decisions. It is also impor-tant that line managers understand whatconstitutes “good” performance versus“poor” performance and what actions orinfluences have contributed to good orpoor performance.

In the jurisdictions studied, consider-able efforts are being directed towarddeveloping and refining measures to beused at the “corporate” level for makingfunding decisions, allocating resourcesand incorporating in the regular report-ing to stakeholders. At the same time,managers are focusing on developingand enhancing measures used to manage

“There is considerable value in having commonterminology andexpectations . . . you can compare across agencies.”

2000–2003 Government-wide Business Plan (Partial)

Exhibit 11

Goals

1. Albertans will be healthy

2. Our children will be wellcared for, safe, successful at learning and healthy

3. Alberta students will excel

4. Albertans will be independent

5. Albertans unable to providefor their basic needs willreceive help

Measures

• Life expectancy at birth

• Health status

• Economic status of children

• Educationalattainment

• Literacy and numeracy levels

• Family incomedistribution

• Economic status of Albertans

Targets

• Maintain or improve current life expectancy at birthand be among the top 10 countries in the world

• 70 per cent of Albertans aged 18–64 rate their healthas very good or excellent, and 75 per cent of Albertansaged 65 and over rate their health as good or better

• To be developed using the Market Basket Measure to report on the economic status of children

• Maintain or improve Alberta’s ranking, with 90 percent of Albertans aged 25–34 having completed high school and 60 per cent having completed post-secondary education by the year 2003

• 85 per cent of Grade 9s meet the acceptablestandards in math and language arts

• Reduce the percentage of families with income under$20,000 to 5 per cent by 2007

• To be developed using the Market Basket Measure to report on the economic status of Albertans

Source: Government of Alberta.


their own operations and to respond to their customers and stakeholders.Agency managers emphasized that there was a need for some accommoda-tion between the measures already inplace and those viewed as necessary

for inclusion in a government-widedocument or system.

For example, in Texas, performancemeasures are developed as part of eachagency’s strategic planning process.Officials from the Legislative Budget


In rolling out the Balanced Scorecard to agencies in the State of Washington, the Governor noted that 1999–2000performance agreements would include the following as different components of the scorecard: financial and social cost,value and benefit, customers and constituents, internal processes and learning results, all linked to the mission of theagency. Each component of the scorecard addresses elements of the strategic plan and performance measures.

The state has used the Balanced Scorecard within agencies as well as for cross-cutting issues that are key toachieving the government’s overall goals. For example, a Balanced Scorecard has been used to address the cross-cuttinggoal of preserving the salmon population in the state. As Joe Dear, Chief of Staff, notes, the Balanced Scorecard providesdirection for “an intergovernmental group toward concrete action . . . and has helped the agencies get out of theirstovepipes.” Bringing various agencies together to identify key measures has been instrumental in achieving consensusand developing clarity about how to accomplish this state-level goal.

Salmon Recovery Scorecard: An Application of the Balanced Scorecard

Source: State of Washington.

MissionRestore salmonid populations to healthy and harvestable

levels and improve habitats on which fish rely

Value and benefitEnsure: Productive habitats Compatible hatchery operations

Sustainable harvest Fish-friendly hydropower operations

Financial and social cost• Achieve cost-effective recovery• Achieve efficient use of government resources• Quantify regional economic impacts

Customers and constituents• Minimize liability through compliance with

Endangered Species Act/Clean Water Act• Assure citizens are engaged

Internal business processes• Protect and restore habitat• Manage hatcheries and harvest to benefit wild stocks• Ensure fish-friendly hydropower operations• Ensure compliance with habitat protection laws• Maximize effectiveness of state agency operations• Effectively co-ordinate/partner among state agencies and other governments• Establish effective ecologically significant unit-wide funding mechanisms• Integrate public information and involvement programs

Learning and growth• Enhance information technology and data systems• Assure recovery decisions are guided by science• Strategies/projects guided by monitoring/research


Board and the Governor’s Office of Budgetand Planning negotiate with agencies thefinal set of measures. These performancemeasures then become the basis forappropriations. In this way, performancemeasures are used at the strategic level tohold agencies accountable for progresstoward policy goals. As John Barton,Manager, Fiscal Analysis and Reporting atthe Legislative Budget Board, points out,the overall process—that is, the integratedstrategic planning and budgeting frame-work and the ongoing dialogue betweenthe agencies and the central agencies—iscritical in helping to define “what are wetrying to accomplish with this money?”

As the State of Texas has gainedgreater facility with its strategic budget-ing process, it is identifying new areas inwhich line managers need competence.At the same time, line managers withinagencies and departments are seekingflexibility in the approach being led bythe central agencies. From the perspec-tive of line managers, the “negotiating”process in developing and agreeing onmeasures takes time and patience. Inworking with the Legislative Budget

Board, one agency manager noted thatearly on the discussions were protractedand submissions regarding a particularmeasure had a good chance of being turneddown. However, over time, the valueadded of these discussions has improvedsignificantly. This reflects a growingunderstanding by central agencies of thebusiness of particular agencies and agrowing facility with measures on thepart of agency managers.

There is a recognition that the use ofperformance measurement is a learningexperience, with opportunities to changethe things that do not work or to adoptand expand the things that do work. For

In Texas, the performance measures are developed as part of each agency’sstrategic planningprocess. Officials from the LegislativeBudget Board and the Governor’s Office of Budget and Planning negotiate with agencies the final set of measures.

There is a growingunderstanding bycentral agencies of the business ofparticular agenciesand a growing facility with measures on the part of agency managers.


In the Texas Department of Insurance, performanceinformation has provided useful validation for activitiesthat improve customer service: for four years, theagency has operated with a travel cap, with current-year spending restricted to the amount spent in the lastbiennium. The assistant commissioners are asked todemonstrate how their travel dollars are tied to keyperformance measures.

For example, the Assistant Commissioner ofConsumer Protection, Audrey Seldon, has successfullyused performance information to explicitly tie travelallocations to consumer complaint resolution results.She emphasizes that performance measurement is theright thing to do because “we are managing thepublic’s money,” providing weight to the agency’semphasis on using and tracking performancemeasures on a regular basis.

Responding to Agencies’ Needs

In early 1998, the Texas State Auditor’s Officeconducted a survey of agencies’ views and use of the state’s performance-based budgeting systems. A majority of agencies responded to the survey,yielding valuable insights for improvements and newareas for consideration. Survey questions probed theusefulness of mission, goal and strategy statements;the usefulness of the General Appropriations Act’sgoals and strategies for the agency; the utility of theagency’s strategic plan; and the usefulness ofperformance measures for decision making.

Many of the questions explored the usefulness ofperformance-based budgeting for line managers, andmost yielded a slim majority of positive responses. For example, when line managers were asked whethermeasures from the General Appropriations Act wereused to manage their agency’s performance, 47 percent responded “always or almost always,” while anadditional 36 per cent said “sometimes” and 10 percent said “never.” When asked about areas forimprovement, respondents emphasized the following: • allow flexibility to adapt to internal/external

changes affecting the system (including adjustingtargets, measures, strategies, seasonal reporting);

• increase input from agencies in the developmentand selection of measures and targets;

• improve the reporting system for performancemeasures; and

• recognize the uniqueness of differentagencies/customize measures.


example, in the Texas Education Agency,the development of measures has beeninvaluable in helping to focus on key policyareas and articulate education programgoals. This focus improves accountability,both within the agency and amongagency constituents. It also improvescommunication about goals and processes,according to Dan Arrigona, Director ofStrategic Planning for the agency.

In the City of Calgary, performance is measured at three levels: community,corporate and program. As Archie Chumak,a corporate consultant with the city,points out, this comprehensive approachaddresses all levels of decision making,from the elected officials and seniorexecutives to program managers andfront-line staff.

The city’s corporate business plan setsout six themes or directions around whichperformance measures are developed:• ensuring the highest degree of public

safety through police, fire, safety,emergency medical and related services;

• providing an optimal level of mobility,accessible recreational facilities andstate-of-the-art water and sewer systems;

• achieving community commitment toindividual integrity and social cohesion;

• preserving and enhancing Calgary’snatural environment;

• making Calgary the most attractiveplace to do business; and

• ensuring the city’s services and facilitiesprovide excellent value for money.The first five themes relate to commu-

nity measures, and the last to corporatemeasures. Leaders within the city recog-nize that they can influence but not controlmost of these measures. At the same time,they need to promote accountability.Accountability begins as managers identifythe community and corporate measuresto which their programs contribute.Corporate staff work closely with

department heads across the city todevelop consensus about how they cancontribute to these goals and ensure thatthey are accomplished.

One of the key service delivery depart-ments for the citizens of Calgary is thePolice Service. The goals of the PoliceService are explicitly linked to the city’scommunity outcomes, as developed inthe business plan. In the case of thepublic safety theme, the city’s measuresinclude reported crimes (person andproperty) per capita, percentage of crimecommitted by youth, percentage ofCalgarians who report being victims ofcrime in a 12-month period, trafficcollisions per 100,000 population, andpercentage of emergency medical responses(for life-threatening emergencies) achievedin under eight minutes.

In 1999, as well as contributing to the corporate business plan, the policeprepared a set of community safetymeasures and outcomes that would havethe greatest impact on the community.This work was designed to help Councildetermine how funding their policeservice would make a difference in“ensuring the highest degree of publicsafety” in Calgary through affordablepolice services.

To help in formulating the appropriatemeasures and targets, the Calgary PoliceService consults extensively with otheragencies, departments, committees andadvocacy groups, both formally andinformally. The results of these consul-tations are combined with input fromCalgary residents, community partnersand customers and with research results(including benchmarking with othermajor cities across North America).

The process identified 11 targets thatrelate to the achievement of the city’spublic safety outcome, all of which aredirectly impacted by funding decisions.

In the Texas Education Agency, the development ofmeasures has beeninvaluable in helping to focus on key policy areas andarticulate educationprogram goals.

To help informulating the appropriatemeasures and targets, the Calgary Police Service consultsextensively with other agencies, departments, committees andadvocacy groups.


Exhibit 12 focuses on one of these targets:to “reduce and solve house break andenter incidents.” (The other targets includemaintaining front-line community policing,providing domestic conflict intervention,reducing street prostitution and relatedcrime and disorder, strengthening inves-tigative capacity, stemming the flow ofdrugs, improving standards of telephoneresponse, providing victim and witnessassistance, ensuring timely resolution ofcitizen complaints, maintaining trainingstandards and offering more learningopportunities, and improving policeoperations through research and develop-ment.) For each target, outcomes areidentified, then measures and targetsrelated to achieving these outcomes are set.

The Auditors’ PerspectiveAuditors play a critical role in ensuring

effective management of and accounta-bility for public funds. Increasingly,auditors have shifted their focus fromverification of financial reporting andagency compliance to include monitoringof performance measurement systems.Line managers are aware of the evalua-tive role of auditors but also see con-siderable value in their pinpointing of performance issues and potentialproblem areas.

In some jurisdictions, there is a legis-lative counterpart to the auditor, whichacts as an oversight agency. It generallyhas responsibility for review and eval-uation of operations and the performance

Line managersare aware of theevaluative role of auditors but also see considerablevalue in their pinpointing of performance issues and potentialproblem areas.

Linking Community Outcomes with Resources

Source: Calgary Police Service.

Exhibit 12

PRIORITY

OUTCOME

MEASURE

STANDARD/TARGET

• Increased clearance rates• Increased stolen property recovered• Fewer break and enters

Ensuring the highestdegree of public safety

Reduce and solve housebreak-and-enter incidents

Enhance citizen safety andperceptions of safety

More stolen propertyreturned to owners

• Solve 25% of house break and enters• Recover $500,000 of stolen property• Decrease the number of house break-

and-enter incidents

TARGETS (11)


of agencies, programs and functions.4 InAlberta, for example, the Auditor-General’soffice provides support and advice indeveloping and using performancemeasures within agencies. As KenHoffman, Assistant Auditor-General,notes, one of the roles of his agency is to help ensure consistency across min-istries and capability in managers’ use ofperformance measurement. In his words,“We need to move from development toproduction and to ensure that we bringthe capabilities up to the same levelacross ministries.”

The legislative auditors provide animportant link between the politicalleadership and the agency management.In the State of Washington, the JointLegislative Audit and Review Committee(JLARC) conducts program evaluation,performance audits, sunset reviews andspecial studies on the legislature’s behalf.The four-member executive committee ofthe state’s JLARC includes one memberfrom each caucus. This approach providesimportant balance and objectivity for theactivities of the Committee. As Tom Sykes,Legislative Auditor of JLARC, points out,

the staff of this Committee work closelywith the policy and fiscal committeestaffs of the legislature; they see their roleas helping legislators and state agenciesto focus on results and getting people tolook at the most effective and efficientways of delivering programs and servicesto citizens.

In the Commonwealth of Virginia, theDepartment of Planning and Budgetworks closely with Virginia’s Joint Legis-lative Audit and Review Commission(JLARC) to review the performancemeasures submitted by agencies. KirkJonas, Deputy Director of Staff at theJLARC, notes that four or five years ago“there were many performance measuresthat we disagreed with, but in recentyears there has been major improvementin the quality of measures submitted.” As agencies reach a higher level of skillin the development of measures, Jonassees one of the next challenges as beingto encourage agencies to develop a largernumber of more meaningful measuresand to sustain these over the years. Thiswould enhance the state’s access tolongitudinal performance data.

In Alberta, the Auditor-General’soffice provides support and advice in developing and using performancemeasures withinagencies.

As agencies reach a higher level of skill in thedevelopment ofmeasures, one of the next challenges is to encourageagencies to develop a larger number ofmore meaningfulmeasures.

4 Maria Pilar Aristigueta, Managing for Results in State Government(Westport, Conn.: Quorum Books, 1999), p. 139.


Reporting progress and results to stake-holders is seen as an important strategyin engaging these key groups. Stakeholdersinclude citizens, direct recipients of theservices or programs and legislators, whomust ultimately make decisions aboutthe effectiveness of the efforts of govern-ments and their agencies.

Jurisdictions are working to improvethe quality of the reporting process. Theyare also recognizing that stakeholderscan play important roles throughout theentire performance measurement process,not just in the final reporting phase. Thus,as a foundation for effective reporting,jurisdictions are trying to improveperformance measures by gaining inputfrom stakeholders.

In Prince William County, the impor-tance of citizens is demonstrated in thecounty’s organizational chart: at the topof the chart is the word “citizens.” TheBoard of County Supervisors and thecounty’s 14 departments are depicted asreporting to (“in service to”) the citizens of the county. The chart recognizes thatcitizens are a starting point for developingthe vision and strategies for the countyand that citizens must always be upper-most when implementing strategies and programs.

Results are reported to the communityand to decision makers through the budget,an annual citizens’ survey and the annualService Efforts and Accomplishments (SEA)report. Now in its fifth year, the SEAreport compares inputs (what are wedoing to achieve the goals?) and outputsand outcomes (how close are we tosucceeding?) with those of comparablecommunities. It provides measures ofspending, outputs and results in 10 areas:fire and rescue, police, solid waste, library,planning, adult detention, public welfare,mental health/mental retardation/sub-stance abuse, building development and

sheriff’s office. Management and theaudit department agreed at the outset touse three main counties as comparators,with each agency being allowed to selectan additional comparative jurisdiction.Measures were selected from those in thecurrent county budget, measures reportedto national or state organizations ormeasures recommended by organizationsresearching performance measurementand reporting.

Jurisdictions recognize the need toreport on their own corporate efforts aswell as their contribution to the qualityof life in the communities in which theyoperate. The Regional Municipality ofPeel, for example, is making explicit thelinks between community well-being andthe contribution of each level of govern-ment and other players. Five goals and39 strategic directions have been set outin the region’s document Vision 2000:Directions for Peel’s Future. This documentwas developed in 1999 and includes acommitment to nurture the social, eco-nomic and environmental well-being ofall those living and working in Peel. Thefive goals are:• contribute to a vibrant and diverse

regional economy;• provide leadership and encourage

co-ordination on matters affecting thequality of the community’s health,social well-being and safety;

• assess and manage all aspects ofgrowth within the region and ensurethat social and physical infrastructureis available for planned land uses;

• preserve, protect and enhance theregion’s natural environment andresources; and

• be a strong, effective regional government.Departmental business plans are

developed within the framework of thesegoals and strategic directions.

As a foundationfor effective reporting, jurisdictions are trying to improveperformance measures by gaining input from stakeholders.

Citizens are astarting point for developingthe vision and strategies for thecounty and must always be uppermost when implementingstrategies and programs.

The RegionalMunicipality of Peel is makingexplicit the linksbetween communitywell-being and the contribution of each level of government and other players.

7 R E P O R T I N G R E S U LT S


As Roger Maloney, Chief AdministrativeOfficer, points out, the departmentalbusiness plans include indicators ofsuccess and provide the basis for anannual summary of results.

In addition, the region has spearheadeda Community Well-Being Indicators Project.The purpose of the project is to providesupport and data for future revisions ofthe region’s strategic plan and to providesupport to regional council and seniormanagement in responding to social,economic and environmental policy issues.Seven outcomes relating to residents ofthe community have been developed.Residents should:1. have access to and the opportunity

for self-sufficiency;2. have access to shelter that meets their

household needs; 3. have the opportunity to achieve

physical and emotional well-being;4. be safe from violence and other forms

of crime;5. have the opportunity to participate

in and contribute to the community as a whole;

6. benefit from economic vitality; and7. experience clean, healthy, sustainable

surroundings.There are 74 indicators attached to the

seven outcomes, reflecting those used in other jurisdictions in Ontario, acrossCanada and internationally. Data havebeen collected from a variety of sourcesto create a time series for trend analysis.A summary report on the results isprepared for internal review by thesenior management team.

Exhibit 13 provides examples of theindicators that were developed for one

of the outcomes: residents should “have access to and the opportunity for self-sufficiency.”

In the Province of Alberta, regularreporting of overall government andindividual ministry performance hasbeen a hallmark of the government’saccountability framework. The govern-ment’s annual report, Measuring Up (nowin its seventh year), provides a compre-hensive review of government’s overallprogress on achieving goals. As well,each ministry produces an annual reportdetailing its performance and specificcontribution to the government’s goals.

In the Provinceof Alberta, regular reporting of overall government andindividual ministryperformance has been a hallmark of the government’saccountability framework.

Indicators Relating to Self-Sufficiency

• Proportion of persons living below the low-income cutoff line

• Proportion of population on social assistance• Proportion of population aged 18–25 years on

social assistance• Proportion of population receiving employment

insurance benefits as a proportion of all tax filers,by family type

• Education levels of persons over 15 years of age• Public library use• Proportion of single-parent families• Unemployment rate• Number of full-time jobs available• Reliance on food banks• Number of licensed childcare spaces for children

under 12 years of age• Proportion of subsidized childcare spaces to

licensed spaces• Amount spent on public transit per capita• Amount spent on para-transit per capita• Number of persons aged 65 years and over

living alone• Mobility and home language of the population

Source: Regional Municipality of Peel.

Exhibit 13


Governments are getting better atidentifying performance measures tosupport the achievement of goals andproviding valuable information on resultsto decision makers. The growing use ofperformance measures, as well as greaterunderstanding of the different kinds ofmeasures and the linkages between them,is helping governments substantivelyinfluence the quality, efficiency andeffectiveness of the services they provide.Even more important, the use of perform-ance measures has focused decision makers’attention on identifying outcomes, thatis, determining the “difference that hasbeen made” as a result of the programs,services and policies.

The emerging challenge for governmentdecision makers will be to balance thedevelopment of and reliance on each typeof measure—including inputs, outputs andoutcomes—recognizing that these measurescomplement each other and, taken together,provide a fuller picture of performance. Aswell, organizations need to push harderin identifying outcome measures and proxyoutcome measures. Even if outcomescannot be fully quantified or qualified,there is value in identifying and achievingimmediate and intermediate outcomes.

Taking a longer-term and broaderview of the government’s goals—and of the strategies needed to achieve theseoutcomes—will help organizationsunderstand that the most effective way to achieve these outcomes is through the integrated efforts of agencies acrossgovernment and across communities.

The disciplined use of performancemeasures will aid in expanding the

influence that managers have overoutcomes and processes, even thoughthere will be some over which managersand their agencies have no control.

It is widely acknowledged that the lesstangible, more customized and qualitativeactivities of government—such as regula-tory and public policy efforts—are themost difficult areas in which to developmeasures, especially measures thatindicate outcomes and results. However,this is one of the most fruitful areas inwhich to apply performance measures,since these areas have the most signifi-cant impact on our quality of life. In thefuture, jurisdictions will build on theirsuccesses in measuring transactions andshift to using this experience at a morestrategic level.

Like any change initiative, implement-ing performance measurement in theorganization brings with it both expectedand unexpected new capabilities. Bothwill help spur the organization’s manage-ment team to new accomplishments. Overtime, decision makers will shift fromdevising strategies that make effective useof available resources to starting “withthe end in mind,” that is, envisagingdesired results and using the planningand resource allocation and relatedmanagement processes to get there.

Finally, in all the jurisdictions studied,decision makers recognize that beingprepared to learn from each cycle of experi-ence and being flexible about the measuresthemselves and how they are applied isvital to drawing the most value fromperformance information and to makingit part of the way decisions are made.

The emergingchallenge for governmentdecision makers will be to balance the development of and reliance on each typeof measure.

As well, organizations need to push harder in identifying outcome measures and proxy outcome measures.

Decision makers recognize that being prepared to learn from each cycle of experienceand being flexible about the measuresthemselves and howthey are applied isvital to drawing the most value from performanceinformation.

8 F U T U R E D I R E C T I O N S

The Conference Board of Canada

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integrating performance measurement into management

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