 |
About PRG – Performance measurement
What is performance measurement?
There is no universally accepted term for measuring an organizations' performance. As a result, many terms such as productivity, work measurement, and effectiveness have been used synonymously with 'performance measurement' (NCPP). For example, as stated by John Gearhart, "Performance measurement provides the insight to evaluate (business) activities and how they affect the outcomes of the government organization." KPMG Government Services define it as a system that "helps government managers: (1) set standards and outcome objectives; (2) Measure performance against goals, standards or benchmarks; and (3) communicate results. Performance measurement shifts thinking and focus, as well as a practical technique for quantifying and establishing accountability."
In 1980, the GAO defined performance measurement as "an assessment of an organization's performance, including the measures of:
- Productivity, which quantifies the outputs and inputs of an organization and expresses the two as a ratio. Generally, the ratio is expressed as output to input.
- Effectiveness, which determines the relationship of an organization's outputs to what an organization is intended to accomplish.
- Quality, which examines an output or the process by which an output is produced. Quality is indicated by attributes such as accuracy (or error rate), thoroughness, and complexity.
- Timeliness, which evaluates the time involved producing an appropriate output.
The GASB has also provided a conceptual basis for measuring and reporting the performance of governmental entities in concept statements issued in 1987 and 1994. As stated in Concepts Statement No. 1, "the objective of SEA reporting is to provide more complete information about a governmental entity's performance than can be provided by the traditional financial statements and schedules to assist users in assessing the economy, efficiency, and effectiveness of services provided".
What type of information can performance measurement provide?
The Elements of SEA Reporting and Related Factors
| |
Elements of SEA Performance Measures |
| |
|
Measures of service efforts |
| |
|
|
Inputs—These areThese are measures of the amount of financial and nonfinancial resources a government uses to provide a service, such as cost of road maintenance or the cost incurred per lane-mile on road maintenance, the number of employees used in providing a service, or the amount of equipment used. |
| |
|
Measures of service accomplishments |
| |
|
|
Outputs—Measures that quantify the amount of a service provided. For example, the lane-miles of road repaired, school graduation rates, number of patients treated in the emergency room, tons of garbage collected, or number of fires extinguished. |
| |
|
|
Outcomes—Measures that gauge the accomplishment or results that occur at least partially) because of the services provided. They provide a basis for assessing how well a service's goals and objectives are accomplished. Outcome measures indicate the quality or effectiveness of a service. For example, the condition of roads in a community, or the residents' rating of the smoothness of the roads. Other examples include, the cleanliness ratings based on routine inspections of its streets or parks. As other measures that can be used to gauge success, a fire department might track the number of fire-related deaths and injuries, or the dollar value of property lost to fire. A hospital might utilize mortality rates and the results of random patient surveys. A school district might collect information on the percentage of graduating students gainfully employed or continuing education two years after graduation. |
| |
|
Measures that relate service efforts to service accomplishments |
| |
|
|
Efficiency—Indicators that measure the amount of resources used per unit of output or per unit of outcome. These measures inform judgments about how well resources were used to achieve intended aims—the question of "bang for the buck"—by comparing input indicators with output and outcome indicators. |
| |
|
|
Input-output comparisons include annual cost per inmate in jail, cost per lane-mile of road repaired, and ratio of nurses to patients discharged. |
| |
|
|
Input-outcome measures include cost per inmate successfully rehabilitated, cost per lane-mile of road maintained in good or excellent condition, and cost per patient cured without remission. |
| |
External factors that influence results |
| |
External factors--These include economic, social environmental, and demographic characteristics that have an influence on the results of a service. For example, external factors that might affect highway maintenance cost and condition may include weather conditions in the area where the highway is located and the volume and type of traffic on the highway. |
| |
Other external factors include actions or services provided by other governmental entities, not-for-profit organizations, and business enterprises. |
| |
Additional factors related to SEA reporting |
| |
To be useful, SEA performance measures need to be presented with comparisons to allow users to assess results. Comparisons such as those with results from previous periods, entity-established targets, goals or objectives, generally accepted norms and standards, other parts of the entity, or other comparable jurisdictions can be particularly helpful. |
| |
In using SEA performance measures, secondary effects of a service need to be considered. These include significant indirect consequences—intended or unintended, positive or negative—that occur, at least partially, as a result of the service. For example, secondary effects may include a decrease in traffic accidents because of an improvement in the condition of roads. Secondary effects are often difficult to identify and relate to the actual service being provided. |
| |
Narrative information provided with SEA performance measures can provide explanations for what the level of performance reported by the measure means, the possible effects that the factors that influence results might have on performance and actions that have been (or are being) taken to change reported performance. |
| |
The level of service being provided may be more or less than is necessary to satisfy the need addressed or the results desired. In certain instances, the need or demand for a service may help users to understand the performance achieved and whether the level of services provided meets the perceived need for a particular level of service. |
What is the purpose for doing performance measurement?
Performance measures are meant to provide more complete information about an entity’s performance than do traditional budgets or financial statements and schedules. Primarily, performance measures are concerned with the results of the services delivered by the government. Subsequently, they help to provide a basis for assessing the economy, efficiency, and effectiveness of those services.
Performance information is needed for:
- Setting goals and objectives,
- Planning program activities to accomplish these goals and objectives,
- Allocating resources to programs,
- Monitoring and evaluating results to determine if progress is being made toward achieving the goals and objectives, and
- Modifying program plans to enhance performance.
Performance measures organize information for use by the decision-makers engaged in those activities. Through the measurement, analysis, and evaluation of performance data, public officials can identify ways to maintain or improve the efficiency and effectiveness of activities and provide the public with objective information on their results.
When did performance measurement start and how often does it occur?
Government has always been accountable to their constituents for what they do and how they use provided resources. However, there has been a resurgence of the "right to know" attitude among the public over the past decade. Many different methods and attempts to demonstrate quality and performance have surfaced in the administration of public and government entities. Most recently, the idea of performance management and reporting the performance to external users has taken favor in the attempt for public accountability. The frequency and amount of information being collected, measured, used, and reported varies greatly within the United States and throughout the world.
Where and who does performance measurement?
Performance measurement is occurring nation and worldwide. It is conducted at the top levels of the federal government to the smallest organized locality. Within each entity, the measurement is commonly conducted within the offices of budget and finance, auditing, and/or other various offices.
How is performance measurement done?
Each office, entity, organization, and/or government has their own way of gathering, reporting, interpreting, and using performance information. There is no one set method of how one goes about doing this, however, there are emerging "best practices" in the field. Currently most performance information is only still in the experimental stages of use and much is to be learned from their successes and failures.
|
|
