Performance Measure Development

Is my organization successful?

• How is my organization performing?
• What can I do to improve performance?
• How can I justify my budget and demonstrate excellent stewardship of public funds?
• Are we making progress in achieving objectives?
• Are my customers satisfied?
• What can we do to improve customer satisfaction?

APCG’s Performance Measurement Methodology can help your agency answer these and many other fundamental management questions.

Performance measurement is a means of assessing progress against stated goals and objectives in a way that is unbiased and quantifiable. Typically, a balance of financial and non-financial indicators is used to measure program effectiveness and efficiency. These indicators can include, for example, cost per output, cost per outcome, and customer-oriented factors such as quality, timeliness, and customer satisfaction.

Done properly, program performance is evaluated not on the amount of money spent or the types of activities conducted, but on whether or not a program has produced real, tangible results. Effective performance measurement makes organizational objectives clear and real to employees, improves the focus on long- and short-term success, and reduces the amount of management time allotted to reporting and review.

Based on management research and company experience, APCG asserts that there are two essential components to successful performance management programs: collaborative development and alignment of performance measures. Collaborative development works best because:

• Measure owners – personnel responsible for conducting activities that keep the measures within acceptable thresholds (i.e., performing in the “green”) – are more likely to “accept” responsibility and accountability for measures if they participate in developing them.
• Specialized or technical areas typically require performance measures that have a specialized or technical dimension. Few personnel, except for the measure owners, have the technical knowledge and expertise needed to support APCG in developing customized measures that demonstrate progress in achieving program goals.

Performance management does not end with successful measure development. This is only the essential first step in an ongoing cycle of measure refinement, enhancement, and improvement. For this reason, APCG recommends incorporating a Measure Review Process that is ultimately tied to the governance of the overall performance management program. Properly implemented, the review process:

• Ensures that performance measures change along with the changing needs of the organization
• Guards against haphazard measure changes that would render them meaningless or burdensome to the management of the organization