1 CPMR DISCUSSION PAPER 15 PERFORMANCE MEASUREMENT IN LOCAL GOVERNMENT Richard Boyle
2 EXECUTIVE SUMMARY Performance measurement is an important element of local government modernisation as outlined in the fifth national social partnership agreement Programme for Prosperity and Fairness (2000). The agreement states that performance indicators will be developed 'which will identify best practice and encourage local authorities to improve their own performance levels.' Efficiency and customer satisfaction are highlighted as particular issues in need of attention. This paper provides an overview of national and international developments in performance measurement in local government. The term performance measurement is used in a generic sense in the study to cover the systematic monitoring of performance over time, using both quantitative and qualitative data. Following the introduction, Chapter 2 establishes a framework for the study. This framework emphasises the need to develop performance measurement for different levels of local authority performance and for different perspectives on performance. Three main levels of performance are specified: strategic; service programme; and team/individual. Three perspectives on performance are also specified: service delivery; emphasising customer expectations and needs; financial management, emphasising the wise and prudent use of public money; and human resource management, emphasising the important role of employees in delivering quality services. Chapter 3 examines experience with the development of performance measurement at the level of county/city-wide strategic priorities. At this level, the main emphasis is on creating performance indicators that focus on the strategic priorities of the county/city and of the local authority as a whole. Examples of measurement systems to facilitate the tracking of local social,
3 1.1 Focus of report 1 Introduction This report on performance measurement in local government provides a brief overview of practice, national and international, with regard to the operation of performance measurement systems in local government. The report highlights substantive issues which local authorities will need to address in developing performance measurement systems: the development of a balanced set of measures; the promotion of measurement at both strategic and operational levels; and the effective reporting and use of information gained from measurement systems. In particular, the report examines the role which performance measurement can play at three levels: for the county/city overall; for service programmes such as housing; and for team/individual performance. For each of these levels, experience with developing a balanced set of performance measures is reviewed and good practice examples highlighted. 1.2 Some definitions The term performance measurement is used in a generic sense in this study to cover the systematic monitoring of performance over time using both quantitative and qualitative data. This is in line with international practice (see for example Bouckaert, 1995; Hatry, 1999; and Jackson and Palmer, 1992). However, a distinction is sometimes usefully made in the literature between performance measures which are precise quantitative data, and performance indicators which act as signals to alert managers to issues which may need to be examined further. Given the nature of public service work, performance indicators tend to be much more common than performance measures. Performance measurement is a vital element in the successful operation of performance management in the public service. Performance management has been defined as: a process for establishing a shared understanding about what is to be achieved and how it is to be achieved, and an approach to managing people that increases the probability of achieving success. It allows people to identify their own unique contribution to the achievement of the objectives of their organisation by forging meaningful linkages between personal and sectional objectives and overall objectives. (Hurley, 1999) 1.3 Study background The promotion of performance measurement through the development of performance indicators and service standards to improve the quality of service in local government is highlighted in Better Local Government (1996), the government's planned programme of change for local authorities. Better Local Government proposes that such service delivery indicators be combined with financial performance indicators to produce a comprehensive picture of performance. Subsequently, the fifth social partnership agreement Programme for Prosperity and Fairness (2000) notes the development of performance measurement and performance management as part of the modernisation programme in the local government sector. Other specific initiatives which are promoting an increased interest in performance measurement in local government are the Strategic Management Initiative, value for money studies and individual authority initiatives.
4 Strategic Management Initiative In March 1996 the then Minister for the Environment launched the Strategic Management Initiative (SMI) in local authorities. The SMI is a government initiative to review and reform the public service, by getting public service organisations to focus on key strategic issues. The Minister for the Environment stated that local authorities were being asked to: examine the factors likely to affect their operations over the coming years; take a fresh look at the needs of their customers; take a critical look at their organisations; set objectives and identify key issues; and set up a system to monitor progress. In particular, as part of the SMI each local authority is expected to develop a strategic vision for its area and produce a strategy statement covering a five-year period. The first formal set of strategy statements was produced in These statements set the context for performance measurement in local government, as they outline the main objectives to be achieved. Some statements, such as that produced by Wicklow County Council, include performance indicators for each service provided. However, performance measurement is still very much at its early stages, with a lack of clarity and specificity with regard to many of the indicators included in statements and only a limited range of activities covered by performance indicators. In this regard, practice in local government is similar to that in the civil service, as a separate study for the Committee for Public Management Research on strategy statements in the civil service illustrates (Boyle and Fleming, 2000, CPMR Research Report No. 2). Value for money studies Better Local Government (1996) proposed that value for money (VFM) auditing in local government be given a comparable legal status to that conferred on the Comptroller and Auditor General in the Comptroller and Auditor General (Amendment) Act, It also proposed that the role of the VFM unit of the Local Government Audit Service in the Department of the Environment and Local Government be enlarged to undertake more comprehensive and more in-depth analysis of a wider range of local authority processes. Consequently, the Local Government (Financial Provisions) Act, 1997 provides legal status for VFM auditing in local government and for a Local Government (Value for Money) Unit (McGeough and Horan, 1999). As well as a number of studies of individual topics such as public lighting and purchasing, the VFM unit of the Local Government Audit Service has compiled two volumes of VFM studies, one published in 1996 and one in 1999 (Department of the Environment, 1996; Department of the Environment and Local Government, 1999). These studies develop and promote performance indicators for a number of services. Individual authority initiatives Some local authorities have taken initiatives to develop performance measurement systems. For example, Galway County Council has developed performance/quality of service indicators as part of each section/service annual action plan. Tipperary (SR) County Council has developed a bonus scheme for road works staff, which links to performance. Cork Corporation has established a Corporate Development Unit, one of whose tasks is to look at the issue of performance measurement. Dublin Corporation are beginning to develop performance indicators as part of their business planning process.
5 However, performance measurement is very much at the initial stages in local government in Ireland. While some progress has been made, many areas are relatively untouched by performance measurement and of those that are, there is a recognition that the existing indicators have many limitations. At the same time, there is recognition of performance measurement as an issue of growing prominence and importance in local government. 1.4 Terms of reference It is against this background of increased interest in performance measurement that this study was undertaken. A complementary study of performance measurement in the health sector was also undertaken at the same time by the Committee for Public Management Research (see Butler, 2000, CPMR Discussion Paper No. 14 ). The terms of reference of both studies were the same: To identify and outline current practice, both national and international, with regard to the development of performance measurement systems. To explore the managerial and other issues which arise from the development and implementation of performance measurement systems, and develop guidelines for the design and use of measurement systems arising from this process. To establish the essential elements of a framework for performance measurement, including the key criteria for performance indicator development. While the two studies - of the local government and health sectors - cover much common ground, there are differences due to the distinct operational aspects of each sector. Common issues from the two studies have been summarised in a briefing paper (CPMR Briefing Paper No.1, 2000) 1.5 Study approach and methodology The main part of the study was undertaken in the second half of 1999, with the study being completed in December Three main sources of information were used: 1. The literature on local government performance measurement, both academic and from official government sources, was reviewed. Books, journals and world wide web sites were accessed to provide information, both on national and international practice. Information on the experience of several European countries and the USA was obtained in this manner. 2. All county and city managers were written to, informed of the study and asked to pass on any information they might have of relevance. A small number of local authorities responded and provided useful information on local developments. 3. A small number of interviews were conducted. These covered both officials with an interest in performance measurement at central level in the Department of the Environment and Local Government and the Local Government Management Services Board, and officials from a small number of local authorities. 1.6 Report structure Chapter 2 establishes a framework for performance measurement in local government. Drawing from this framework, Chapters 3, 4 and 5 explore performance measurement at the level of county/city-wide strategies, service programmes and the team/individual respectively. Chapter 6 examines the issue of reporting on and using performance measures. Conclusions and recommendations are outlined in Chapter 7.
6 2 Developing a Framework for Performance Measurement in Local Government 2.1 Introduction In developing performance measurement systems for local government, it is useful to establish a broad framework to provide a common language and focus for measurement initiatives. Such a framework must be consistent with national initiatives such as the promotion of value-for-money studies and the development of performance management in the public service. Essential features of a framework should include: the dimensions of performance to be measured; the criteria to be considered in selecting indicators; and the establishment of a balanced set of measures. 2.2 The dimensions of performance to be measured Performance is a difficult term to pin down. However, a common terminology has emerged over recent years which allows different elements of performance to be identified (see for example Boyle, 1990, 1996): Inputs refer to the basic resources worked with: the staff, the money, the buildings, the equipment and so on. Process/Activities concerns how services are delivered: the manner in which resources are arranged to meet demand for services. Outputs are the goods or services immediately produced by an organisation. Outcomes reflect the impacts a service has on recipients and the wider community. These elements of performance can be combined, from inputs through to outcomes, to develop a logic model for programmes (see section 4.4 for further details). As the United Way of America (1996) notes: A programme logic model is a description of how the programme theoretically works to achieve benefits for participants. It is the 'if-then' sequence of changes that the programme intends to set in motion through its inputs, activities and outputs. Logic models are a useful framework for examining outcomes. They help you think through the steps of participants' progress and develop a realistic picture of what your programme can expect to accomplish for participants. They also help you identify the key programme components that must be tracked to assess the programme's effectiveness. These elements of performance also provide the building blocks for the development of performance indicators. They are usually of most value when one looks at how they can be used to produce indicators of different dimensions of performance: Economy indicators are primarily concerned with the inputs, and show the cost of acquiring services such as staff or premises. In comparative terms, if one unit seems to be purchasing resources more economically than others, questions need to be asked as to why this is happening. Efficiency indicators concern the relationship between outputs and inputs, for example the cost of road miles maintained, by road category. Effectiveness indicators are primarily focused on showing the outcome of the service. An example here would be the percentage of total waste recycled.
7 Equity indicators concern administrative justice - ensuring that like cases are dealt with in a like mananer. Equity can impact on any of the elements of performance defined. For example, an indicator of the length of time taken to process a particular application may show regional variations among local authorities that are judged to be inequitable. Quality of service indicators bring the client to the fore. Here, the concern is with ensuring that the best possible service is provided. As with equity, quality can impact on any of the elements of performance. Thus, for example, the quality of an output such as housing maintenance may in part be indicated by a survey of tenant satisfaction. 2.3 The criteria to be considered in selecting performance indicators Several criteria have been put forward for judging if performance indicators should be selected for use or not (Smith, 1987; Buningham, 1990; Ball and Halwachi, 1987). A useful summary of the most common and influential criteria has been established by the US National Performance Review (1997), which states that in general, a good indicator: is accepted by and meaningful to the customer; tells how well goals and objectives are being met; is simple, understandable, logical, and repeatable; shows a trend; is unambiguously defined; allows for economical data collection; is timely; and is sensitive. Above all, however, a good indicator drives appropriate action. In a similar vein, the National Performance Review (1997) goes on to identify characteristics associated with the implementation of a successful performance measurement system. It states that a successful system: comprises a balanced set of a limited vital few measures; produces timely and useful reports at a reasonable cost; displays and makes readily available information that is shared, understood, and used by an organisation; and supports the organisation's values and the relationship the organisation has with customers, suppliers, and stakeholders. 2.4 The establishment of a balanced set of indicators One of the characteristics of successful performance measurement systems outlined above, developing a balanced set of vital indicators, is of particular consequence. Following the success of the 'balanced scorecard' measurement system in many private and public sector organisations (Kaplan and Norton, 1993) and previous work for the Committee for Public Management Research that promotes the development of integrated financial and operational performance indicators in the civil service (Boyle, 1997a, CPMR Discussion Paper No.3), there is growing awareness of the need to ensure that measurement systems provide a balanced view of performance. This means ensuring that different perspectives on performance - service user, employee and financial - are assessed, and that performance is measured at appropriate levels: strategic, programme and team/individual. This approach to developing a balanced set of performance indicators informs the framework developed for this study and is illustrated in Figure 2.1 and outlined below.
8 Perspectives on performance Perspectives on Performance Service Financial Human Resource Levels of Delivery Management Management performance County/City Wide Strategic Priorities Programmes Team/Individual Levels of performance It is important that performance indicators are developed for all levels of local authority performance, from the strategic, through operational programme, down to the level of the team/individual: County/City Wide Strategic Priorities. The Report of the Task Force on the Integration of Local Government and Local Development Systems (Department of the Environment and Local Government, 1998) emphasises the central role local government will play in co-ordinating social and economic development initiatives at local level. Key indicators will be needed to track strategic initiatives here. Similarly, performance indicators are needed to help assess progress with regard to local authority strategy statements. Programmes. The traditional local government service programmes, such as development and planning, road transportation and housing, continue to be the main vehicle for service delivery by local authorities. Indicators are needed at this level to enable judgments to be made about the efficiency and effectiveness of service delivery. Team/individual. Performance management initiatives emphasise the need to give teams and individual employees timely and relevant feedback on their performance. Indicators can assist here in clarifying employee and employer expectations Perspectives on performance The performance management system for the civil service, which is likely to be used as a reference point for performance management in local government, emphasises three perspectives on performance: service delivery; financial management; and human resource management (Kelly, 1999; Boyle, 1997a). Indicators will need to be developed for each of these perspectives: Service delivery. Here, the focus is on developing indicators from the point of view of the customer or service user. The emphasis is on finding out customers expectations and needs, and their experience of service delivery. Quality services, as emphasised in Better Local Government (1996), is the key concern, within existing expenditure constraints.
9 Financial management. Here, the focus is on developing indicators from the point of view of the resource controller. Wise and prudent use of public money means that traditional measures of probity and expenditure are still needed, together with measures of the efficient and cost-effective use of resources. Better Local Government (1996) emphasises the need to have financial management systems which let people know how the local authority is performing. Human resource management. Here, the focus is on developing indicators from the employee perspective. This ensures attention on the performance of key internal processes that drive the organisation: the organisation's people and infrastructure. Better Local Government (1996) highlights the need to properly manage, motivate, involve and train employees so as to deliver a cost-effective and quality service to the public. 2.5 Conclusions This analysis highlights the different aspects of performance to be addressed in any measurement system, the criteria to be used in selecting performance indicators, and the need for a balanced set of performance indicators. In particular, the need for performance measurement systems to reflect customer and employee views as well as traditional financial measures is stressed. So too is the need to address quality-of-service issues and outcomes as well as measuring inputs and outputs. The framework outlined here allows a comprehensive system of performance measurement to be developed which addresses a variety of needs.
10 3 Performance Measurement at the Level of County/City-Wide Strategic Priorities 3.1 Introduction As noted in Chapter 2, local authorities have a central role in promoting and co-ordinating a shared vision for social, economic and cultural development at the local level. County/City Development Boards, established in 2000 and with wide representation, are charged with developing a shared strategy for the county/city for up to ten years ahead. Local authority strategy statements are intended to emphasise key strategic issues for the local authority over a five-year period. It is important that performance indicators are developed that will enable judgements to be made concerning progress against strategic priorities, covering the issues of service delivery, financial management and human resource management. 3.2 Service delivery performance indicators There is much that can be learned from north American experience of developing performance indicators for area-wide strategic priorities. With regard to the co-ordinating role of local government, where other agencies are also involved in service delivery, community status reports are a potentially useful mechanism. Community status reports provide information about key social, health, economic and/or environmental conditions in a community (United Way of America, 1999). Such reports were developed because of a recognition of the limitation of economic indicators alone: Economic indicators have traditionally been used to assess the economic 'state of the state'. Strong economic growth, low inflation and unemployment were regarded as indicative of a healthy economic climate and believed to result in prosperity for citizens. However, citizens have become increasingly concerned about their relative quality of life, expressed in terms such as quality of education and health care, availability of recreational/cultural opportunities, clean environment, and safety from crime. Accounting and economic based measurement systems were not designed to address these issues; thus, governments have introduced new systems for measuring progress, including policy outcome based performance measurement (Ogata and Goodkey, 1998). Two particularly successful community status report projects are Measuring Up (Government of Alberta, 1999) and Oregon benchmarks (Oregon Progress Board, 1999). In 1993 the province of Alberta, Canada initiated development of a comprehensive threeyear business planning and performance measurement system. In June 1995 the first annual Measuring Up report was published. Measuring Up contains twenty-five core performance indicators related to seventeen government goals (see Annex A for details). These indicators focus on issues such as infrastructure capacity, literacy and numeracy levels, crime rate and water quality. The aim is to develop outcome-based indicators to provide information on progress towards long-term targets. The targets were selected and are driven by political leadership, and through public consultation (Ogata and Goodkey, 1998).
11 The state of Oregon, USA, adopted a development strategy in 1989 called Oregon Shines that was aimed at shifting the state from its traditional resource-based economy to a new information-based economy. The strategy addressed quality of life issues as well as economic diversification. Oregon Shines II was adopted in 1997 as a successor strategy. Progress against the strategy is tracked through Oregon Benchmarks, an annual report which tracks ninety-two indicators against benchmark targets in seven categories: economy, education, civic engagement, social support, public safety, community development and environment. Depending on progress as shown by the indicators, a grade for each benchmark (from A to F) is given. Annex B gives an illustrative example in the field of community development, from the 1999 report. Other, smaller municipalities have followed on from this example and developed their own community status reports. The initiative is not just confined to larger states. For example, Jacksonville, Florida and Truckee Meadows, Nevada have both established quality of life indicator reports and measurement systems (Besleme, Maser and Silverstein, 1999). One key point to remember with community status reports is that while they can be of significant benefit, of their own: they do not change the community conditions they profile. Changing community conditions requires targeted action, and targeted action does not automatically follow reporting or tracking a condition (United Wayof America, 1999). In addition to community status reports, other measurement efforts can contribute to promoting inter-agency working at the local level. In the United Kingdom, for example, under the Best Value initiative (Department of the Environment, Transport and the Regions, 1999a) efforts are being made to develop cross-cutting and interface indicators. Indicators for cross-cutting issues are being developed by the Audit Commission. For example, in the area of domestic violence the Audit Commission is promoting the development of indicators by police and local authorities. The Commission is proposing that a new performance indicator for local authorities be developed that focuses on their provision of support for the victims of domestic violence: the number of refuge places per 100,000 population which are provided by or supported by the authority (Department of the Environment, Transport and the Regions, 1999a). Interface indicators aim at measuring joint working across agency boundaries. Thought is being given to the development of a general welfare/well-being indicator for children that could measure a range of factors which indicate the effect of local agencies on the lives of children in their areas: This could include levels of educational attainment, accident rates, offending rates, and teenage pregnancies. The aim would be to integrate local planning and delivery around common objectives and remove the notion that only those agencies with specific responsibilities for providing services to children (such as social services and education) are able to influence their lives. (Department of the Environment, Transport and the Regions, 1999b) With regard to developing strategic performance indicators for the county/city local authority itself, these are likely to be linked to the strategy statement. For example, Coral Springs in Florida has set Key Intended Outcomes (KIOs) for each of the city's six strategic priorities as identified in the city's strategic plan. Each KIO is made up of three elements: a performance indicator, the current performance level for the indicator, and a performance goal that city staff plan to attain in two years (City of Coral Springs, 1997). Figure 3.1 gives examples of KIO indicators for the 'customer focused government' strategic priority.
12 Figure 3.1 Strategic priority indicators Customer Focused Government Key Intended Outcomes Overall quality rating for city services and programs Overall satisfaction rating of city employees City employees productivity rating (residents served by city employee) Percentage change in the overall city crime rate Customer service rating Source: Coral Springs, 1998 Goal 90% 90% % 80% In the United Kingdom, under the Best Value initiative, local authorities are to produce Best Value Corporate Health indicators as part of a group of Best Value Performance Indicators (BVPI). These indicators are intended to provide a snapshot of how well the authority is performing overall. The proposed indicators are outlined in Figure 3.2. The service delivery related indicators are those outlined from BVPI1 to BVPI7. Figure 3.2 Proposed UK Best Value Corporate Health Indicators Planning and Measuring Performance BVPI1 Did the authority adopt a Local Agenda 21 Plan (as set out in Sustainable local communities for the 21 st Century) by 31 December 2000? BVPI2 The level of the Commission for Racial Equality s Standard for Local Government to which the authority conforms. Customers and the Community BVPI3 The percentage of citizens satisfied with the overall service provided by their authority. BVPI4 The percentage of those making complaints satisfied with the handling of those complaints. BVPI5 The number of complaints to an Ombudsman classified as: a. Maladministration b. Local Settlement BVPI6 The percentage turnout for local elections. BVPI7 The percentage of electoral registration form A s returned. Management of Resources BVPI8 The percentage of undisputed invoices which were paid in 30 days. BVPI9 Proportion of council tax collected. BVPI10 The percentage of business rates which should have been received during the year that were received. Staff Development BVPI11 The percentage of senior management posts filled by women. BVPI12 The proportion of working days/shifts lost to sickness absence. BVPI13 Voluntary leavers as a percentage of the staff in post. BVPI14 Early retirements (excluding ill-health retirements) as a percentage of the total workforce. BVPI15 Ill-health retirements as a percentage of the total workforce. BVPI16 The number of staff declaring that they meet the Disability Discrimination Act disability definition as a percentage of the total workforce. BVPI17 Minority ethnic community staff as a percentage of the total workforce. Source: Department of the Environment, Transport and theregions, 1999b
13 3.3 Financial management and human resource management indicators Figure 3.2 also illustrates proposed corporate level indicators relating to resource management. These are aimed at tracking the effective and efficient utilisation of financial resources in such areas as local taxation and invoice payment. In more general terms, at the level of the county/city it might be expected that indicators will give a broad overview of expenditure and highlight trends over time. In this way, the resource implications of strategic issues can be assessed, and actions linked to resources, thus ensuring that actions contained in strategy statements do not become wish-lists, but are related to what is achievable. Annex C, taken from the City of Portland Service Efforts and Accomplishments report, gives an overview of overall city spending broken down by service programme, and provides a perspective on how spending is changing over time (Office of the City Auditor Portland Oregon, 1998). With regard to human resource management, the emphasis at county/city level is to ensure that indicators are developed that provide information on strategic human resource issues. So, for example, Figure 3.2 illustrates several UK Best Value indicators concerning staff development which address issues such as the extent of diversity in the workplace and staff turnover. Such issues are also likely to be important and require measurement in Ireland given trends in the labour market and the impact of the Employment Equality Act, Employee surveys may also be used to highlight strategic issues of particular concern to staff. For example, the City of Austin, Texas does extensive surveys of employees (as well as citizens) to measure their satisfaction and identify emerging issues. Austin develops indicators from these surveys to help make its performance measurement system more credible (National Partnership for Reinventing Government, 1999). For example, one question asks each employee if they use performance indicators in making daily operational decisions. Initially only a quarter of employees indicated that they did most of the time. In response Austin has developed its business planning process and created results-oriented job descriptions, to enable all employees to understand how their work contributes to city-wide goals. 3.4 Conclusions At county/city level, the main emphasis is on developing performance indicators that enable the tracking of strategic priorities. These may be priorities which relate to the county/city as a whole rather than the local authority per se. In this case, the aim is to ensure relevant indicators are developed that allow changes in community status in the social, economic and development fields to be tracked. Indicators which are relevant to co-operative working between agencies are particularly important here. For the local authority itself, it is important that performance indicators are developed that reflect key strategic issues identified in the strategy statement. 4
14 Performance Measurement at the Level of Service Programmes 4.1 Introduction Local authorities provide a wide range of services through service programmes. The main service areas are classified into eight programme groups: housing and building; road transportation and safety; water supply and sewerage; development incentives and controls; environmental protection; recreation and amenity; agriculture, education, health and welfare; and miscellaneous services (Better Local Government, 1996). It is at this programme level that much of the day-to-day activities of local government impact on the lives of citizens. Indicators are needed here to help assess the operational impact of local authorities. 4.2 Service delivery performance indicators The Department of the Environment and Local Government (DoELG) value for money unit has identified a range of potential performance indicators that could be used at programme level in local authorities (Department of Environment and Local Government, 1999). A further study (Maloney, 1999) also indicates that there is significant scope for the use of performance indicators by Irish local authorities in the measurement of performance. In the study, the possibility of using indicators derived from the United Kingdom experience in a range of service programmes (dealing with the public; housing; roads; fire; and litter control) was examined, and they were found to provide a useful framework around which to build appropriate indicators in an Irish context. Some local authorities are beginning to develop performance indicators for programmes. For example, in 1998 Galway County Council asked all sections when updating their section/service action plans to develop performance indicators. Sections were asked, in developing indicators, to bear in mind in particular proposals for improved service delivery. Examples of the type of indicator proposed are given in Figure 4.1. To date, most of the indicators relate to the timeliness of delivering services as a key aspect of quality of service delivery. Further developments are planned, for example indicators to monitor a five-year planned housing maintenance programme. The indicators proposed for the libraries are interesting in that they attempt to measure qualitative issues around the broader role of libraries in local communities, and will complement traditional measures such as book issues and number of visits. Sample performance indicators: Galway County Council
15 Housing Acknowledge receipt of housing/transfer applications, advise of procedure within 2 weeks and final decision within 8 weeks. Quarterly meetings with residents associations re. Tenant participation in estate management. Roads National roads: pothole repair will be done within 2 working days of notification on carriageway of road. Inspect complaints/requests made to area offices in person i.e. callers or phone, within two weeks of complaint/request made (except during annual holidays). Libraries Number of voluntary and community groups who have links with each library. Proportion of hours when the library service is used for organised activities apart from traditional library services. Proportion of staff time dedicated to contact with the public (except dealing with book issues) and recording the number and type of requests for assistance that patrons make of staff members. In the United Kingdom, under the Best Value initiative, performance indicators for operational programmes are being strengthened in the area of service delivery. The Local Government Act, 1999 places a duty of best value on local authorities to make continuous improvements in the way they exercise their functions. As part of this Best Value initiative, the role of performance indicators is being reviewed. Central government guidance (Department of the Environment, Transport and the Regions, 1999a) indicates a 'family' of indicators which it expects local authorities to collect: Local performance indicators. To enable local authorities to reflect local priorities and manage services effectively, it is envisaged that locally determined indicators will be developed, and targets for improvement set. Best Value corporate health and service delivery performance indicators. These indicators will be set by the government. Best Value corporate health indicators will provide a snapshot of how well the authority is performing overall. Best value service delivery indicators will reflect the national interest in the delivery of local services. Five dimensions of performance are proposed: - strategic objectives: why the service exists and what it seeks to achieve - cost/efficiency: the resources committed to a service; the efficiency with which they are turned into outputs - service delivery outcomes: assessing the service against the strategic objectives - quality: indicators reflecting users experience of services - fair access: ease and equality of access to services.
16 Audit Commission performance indicators. The Commission retains its statutory duty to set local authority performance indicators. Other indicators set by government departments. Individual government departments collect data for a variety of reasons, in areas such as education, health and social services. Local authorities will be required to publish their performance, as illustrated by performance indicators, standards and targets, in an annual best value performance plan, giving data for the previous and current financial years. For each service area, indicators specifically focused on service delivery outcome and quality are to be developed. Examples include: Tenant satisfaction with overall housing services provided by the landlord (housing quality). Number of collections missed per 100,000 collections of household waste (environmental services service delivery outcome). Percentage of streetlights not working as planned (transport service delivery outcome). In the USA, in an effort to go beyond purely financial and accounting reporting, the Government Accounting and Standards Board (GASB) has developed what it calls service efforts and accomplishments (SEA) reporting (Epstein, 1992). SEA reporting can be divided into four parts: Service efforts. The resources (inputs) that go into a programme, measured by way of (a) the total cost of the programme, (b) the total full-time equivalent staff devoted to the programme, and (c) the total number of employee hours worked on the programme. Service accomplishments. These are divided into two main categories: outputs (amount of work load accomplished) and outcomes (numeric indicators of programme results, including indicators of service quality, timeliness and effectiveness). Service effort and accomplishment ratios. These ratios relate service efforts to service accomplishments through such measures as input/output and input/outcome ratios. Explanatory information. To help users understand contextual factors influencing performance, particularly (a) elements substantially outside the control of the agency and (b) elements over which the agency has significant control, such as staffing. Several states and local governments are experimenting with SEA reporting. States such as Oregon and Minnesota and local governments such as Sunnyvale (California), Coral Springs (Florida) and Portland (Oregon) are regarded as pioneers and examples of best practice with regard to performance measurement (National Partnership for Reinventing Government, 1999). Just as strategic indicators should be linked to strategy statements and strategic plans, it makes sense for programme indicators to be linked to business and operational plans for each service area. For example Austin, Texas as part of its business plan links performance indicators to programme objectives and strategies to be achieved during the year, as illustrated in Figure 4.2. Experience in several European countries also emphasises the need to link measures and indicators to the business planning process. Tilburg, in the Netherlands, is widely regarded as a pioneer of performance measurement for municipalities (Haselbekke, 1995). In 1985 Tilburg developed a new management model based on organisational decentralisation and a move from input budgeting to performance budgeting. Lawton and McKevitt (1995) describe the main aspects of change: The content of reform included organisational structure and organisational culture; information systems and the allocation of financial accountability; the quality of management and the development of competencies. Key elements of the process are the decentralisation of structures and the delegation of responsibility, the use of business management techniques and contract management, and the focus on outputs rather than inputs.
17 The Tilburg budget now presents quantitative information on what it terms measurable policy goals, with indicators developed in terms of outputs or outcomes. Haselbekke (1995) estimates that some 95 per cent of Tilburg's budget is accompanied by performance indicators. Many municipalities in Germany have been influenced by the Tilburg approach. Kickert and Beck Jorgensen (1995) indicate a trend in German municipalities, with contractmanagement between the top of the municipal 'concern' and the semi-autonomous 'division', based on clear mission statements, goals and budgets, with a clear service and clientorientation, and using output-oriented governance instruments like performance indicators, controlling by results, output budgets etc. A variety of data collection procedures and sources are available for gathering data on service delivery. Hatry (1999) gives a useful summary of four major data gathering alternatives: programme records; customer surveys; trained observer ratings; and special technical equipment. To take one example, trained observers can be used to rate outcome conditions that can be assessed by the eyes or other physical senses of the observer. Three main types of rating systems are used by trained observers: written descriptions; photographs; and other visual scales such as drawings. Written descriptions are the most commonly used, as an example given by Hatry (1999) for building or street cleanliness illustrates: Rating 1: Clean. Building or street is completely or almost completely clean; a maximum of three pieces of litter per floor or block is present. Rating 2: Moderately Clean. Building or street is largely clean; a few pieces of isolated litter or dirt are observable. Rating 3: Moderately Dirty. Some scattered litter or dirt is present Rating 4: Dirty. Heavy litter or dirt is present in several locations throughout the building or along the block. 4.3 Financial and human resource management performance indicators Many of the financial and human resource management indicators needed at operational programme level will be the same as those developed at the strategic level, but stepped down to individual programmes. So, for example, it is important to develop indicators showing items such as spending per capita and staff turnover for individual programmes. It is often at the programme level that resource management measures are combined with service delivery indicators to give an assessment of efficiency. These efficiency measures can be tracked over time, and compared with other relevant local authorities. Coral Springs, Florida, for example, uses eight other local cities for selecting comparisons to improve organisational performance (City of Coral Springs, 1997). The use of benchmarking as a performance measurement tool is discussed in more detail in Chapter Using the programme logic model to develop performance indicators The programme logic model, referred to in Chapter 2, is a useful mechanism for identifying performance information needed at programme level. The basis for the programme logic model is to have clear programme objectives which facilitate understanding of what the programme is intended to achieve. From this step, which is a central part of the business planning process, a programme logic map can be developed which is a diagrammatic representation of the link between inputs, process/activities, outputs and outcomes. An illustrative example is given in Figure 4.3. It can be seen here that the outcomes are divided into initial, intermediate and longer-term outcomes. Usually, the initial and some intermediate outcomes are directly linked to the programme. Longer term outcomes may be influenced by other activities and events. Hatry (1999) provides a useful summary guide on the development of logic models.
18 Using such a model facilitates the development of indicators, particularly service delivery indicators focused on the outcomes of programmes. Through defining how successful achievement of outcomes will be recognised, the model enables relevant indicators to be devised. For example, in the example given in Figure 4.3, the reported crime rate could be used as an indicator to track crime levels in participating blocks, and the percentage of residents declaring the neighbourhood as a safe place to play for children used as an indicator to track the desired long-term outcome. In using such a model, it is particularly important that the views of the main stakeholders and service users are sought. They can help validate the model. 4.5 Conclusions It is at the programme level that performance measurement most directly relates to the dayto-day activities of local government. Linked into the business planning process, performance indicators can be used to help steer performance in the desired direction. Business plans outline a programme's core activities, objectives, strategies and performance indicators, all linked to budget allocation decisions and strategic priorities. In developing performance indicators for business planning, the programme logic model can be of assistance, particularly in ensuring that service delivery outcomes are considered and addressed.
19 Figure 4.3: Programme Logic Model: Neighbourhood Organising Programme Longer-term Outcomes Intermediat e Children play in Volunteers create Volunteers for each Residents feel Crime in participating blocks decreases. Residents follow Crime Watch guidelines Residents attend Block Parties for Crime Watch training Initial Outcomes Residents sign up to Residents sign up as Crime Watch organisers for their block Outputs Action plans developed for 2 priorities: clean play areas and crime watch Residents attend meetings Activities Authority staff hold community meetings to discuss proposed response to community-identified need for a safer neighbourhood for children. Inputs Local authority has 2 communitybuilding staff, meeting space, and steering group representing major constituencies of the community Source: adapted from United way of America, 1996.
20 5.1 Introduction 5 Performance Measurement at the Level of the Team/Individual At the level of the team/individual, performance indicators need to be seen in the context of developments in performance management. The broad aim of performance management as noted in the Introduction above, is to increase each individual's understanding of what needs to be achieved at work and how it is to be achieved and to support them in aiming to improve performance. The intention is to develop meaningful linkages between personal and sectional objectives and overall organisational objectives (Hurley, 1999). Performance measurement at the level of the team or individual is part of this performance management process. But meaningful objectives and indicators are needed at the county/city-wide and programme level before measurement at the team/individual level can be fully effective. 5.2 Service delivery, financial and human resource management performance indicators At the level of the team/individual, it is likely that relevant indicators covering service delivery, finance and HR will be combined to give a guide as to what is expected. This is sometimes done in the form of a document agreed between the team/individual and their manager. For example, the City of Austin, Texas is beginning to use what it terms 'alignment worksheets' to tie programme results to employee evaluations: The worksheets are used for each executive employee and link that employee's compensation to programme results and progress made towards the city's strategic goals and vision. (National Partnership for Reinventing Government, 1999). The aim is to develop worksheets for all employees over the next few years. Similarly, in Coral Springs, Florida each employee and supervisor agrees personal objectives for employees that relate back to the city's key intended outcomes (City of Coral Springs, 1997). Thus the aim is to ensure that individual objectives, targets, and indicators are clearly linked to higher-level objectives, usually derived through the business planning and strategic planning process. Performance indicators derived at the level of the team/individual should be negotiated and agreed between supervisors and employees in the context of the broader organisational objectives. This approach of tying individuals objectives and indicators to broader organisational objectives is promoted in the performance management system for the Irish civil service. As it is likely that a similar approach will be adopted in the wider public service, it is worth examining some of the broad aspects of the civil service performance management system. Figure 5.1 illustrates that an individual role profile is at the heart of performance management, building on an organisation's strategic and business plans. This role profile is composed of three main items: (a) outputs, specifying the main requirements of the job; (b) competencies, highlighting the main competencies required to successfully undertake the job; and (c) development needs, outlining actions to be taken to enhance existing competencies. From the perspective of this study on performance measurement, it is the 'outputs' element of the individual role profile that is of particular importance. In the scheme for the civil service, these outputs include specification of the key deliverables for the year (often referred to in the literature as key result areas) and key performance indicators. Performance indicators are intended to cover both quantitative and qualitative issues, and help provide benchmarks against which success can be judged. It is likely that key deliverables will be a combination of the position specific (related to the particular job under scrutiny) and the general across a particular grade.
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