A Practitioner s Guide to Implementing a Performance Monitoring and Reporting Approach

Transcription

1 A Practitioner s Guide to Implementing a Performance Monitoring and Reporting Approach

2 Acknowledgements This document is an initiative of the Victorian Corporate Planners Network a Special Interest Group of Local Government Professionals Inc. This document was made possible by the hard work of the members of the Best Value Practioner's Interest Group, a working group of the Victorian Corporate Planners Network and their organisations who committed significant time and expertise into the completion of this document. The working group are: Dan Wade (Convenor), City of Monash Karen Crook, City of Greater Bendigo Monique De Zwart, Latrobe City Council Kerryn Stewart-Uden, Bayside City Council Jason Stubbs, Frankston City Council Julie Tipene-O Toole, City of Melbourne Special acknowledgement for the contribution of Rachel Powning of the Australia Continuous Improvement Group who was engaged as a consultant to the working group.

3 Foreword It is with much pleasure that I introduce the Performance Monitoring and Reporting Guidelines, developed by the Victorian Corporate Planners Network. The Performance Monitoring and Reporting Guidelines are a part of the ongoing approach by practitioners in the Local Government sector to improve performance at Councils. The role of a Council in planning for the provision of services and facilities designed to strengthen their communities has expanded in the last ten years. So too has the focus on setting the long term strategic direction for Victorian municipalities. The need to have dedicated frameworks to monitor both performance and outcomes based on these expanded roles is evident. These Guidelines are designed to assist Council practitioners to manage, develop and implement performance monitoring and reporting systems at their Councils. Importantly they have been compiled by practitioners charged with the responsibility of turning the policy, legislation and concepts into working, achievable parts of the diverse organisations they are a part of. I acknowledge the work of the Victorian Corporate Planners Network in the production of the Guidelines, and in particular commend the collaborative, experienced based approach to their development. I am pleased to recommend these guidelines to practitioners of performance monitoring in all spheres of Local Government. Catherine Dale CEO, Bayside City Council Author, Corporate Planning in Local Government

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5 Contents 1 Introduction Background Theory The Performance Monitoring and Reporting Context... 3 Figure 2.1 Performance Monitoring and Reporting Influences 3 Figure 2.2 Performance and Reporting Requirements from the Local Government Act 5 Figure 2.3 Drivers of Performance Monitoring and Reporting Performance Frameworks and Models... 6 Figure 2.4 Generic Performance Monitoring and Reporting Framework Characteristics of PMR Models... 7 Figure 2.5 Common/Best Practice Features of Frameworks 8 Figure 2.6 Council Performance and Reporting Spectrum 9 Figure 2.7 Service Level to Outcome Level Measures Example 9 3 Implementing Performance Monitoring and Reporting...10 Figure 3.1 Process to develop a Performance Monitoring and Reporting System Step 1: Understand the Current Environment Figure 3.2 Example outcomes and output structure 11 Figure 3.3 Some dedicated software for Performance Monitoring and Reporting Understand all the Influences on the Development of the PMR processes Figure Performance Framework Influencers Decide on the Approach Create a Project Plan Change Management - People and Training Sell to the Stakeholders Appendix A - Legislation...17 Local Government Act 1989 Sections 125 to Appendix B - Best Practice Features of PMR Systems...22 Best Practice features of Performance Monitoring and Reporting systems 22 Appendix C - Features of Common Performance Management Models...23 Appendix D - Resources...24 Websites Public Sector Resources Local Government Specific Resources On Performance Monitoring Models Projects and Sources General Management Resources Appendix E - Glossary...27

6 1 Introduction There is a growing and positive trend for greater transparency and accountability in local government. This trend is supported by the 2004 update to the (Victorian) Local Government Act (refer Appendix 1). The Act now states that Council Plans must include indicators for monitoring the achievement of strategic objectives, and that Council Budgets must include Key Strategic Activities (KSAs). The importance of achieving community involvement and citizen engagement was also entrenched in the changes to the Act, and both Victorian state and local government are committed to achieving this. These changes, coupled with the introduction of the Best Value legislation, have contributed to an increasing emphasis on the role of monitoring and reporting on performance. The concept of performance monitoring and reporting (PMR) is not new to local government, what is new however is the broad recognition across the sector of the need for a formal approach to this. A Definition of Performance Monitoring and Reporting As a body of knowledge, PMR covers the full range of performance, including individual, service and organisational performance. The scope of this guide is focused on performance at an organisational level. The organisation is defined as both the operational and strategic elements of a council. PMR is an approach to setting and using measures to determine whether the efforts of staff and the elected council are having the intended impact on the community. This guide is a resource designed to assist those charged with responsibility for their Council s PMR system. It is divided into two main parts. In Part A we have identified some of the most common performance management models and frameworks. In Part B, we share the experience of practitioners involved in the development and maintenance of PMR systems in Local Government, by providing a broad outline of the steps involved in PMR implementation. We hope you find the Guide useful.

7 2 Background Theory 2.1 The Performance Monitoring and Reporting Context The current approaches to performance management in local government continue to be influenced by many factors, including changes to legislation, improving management practices and pressure from the community, particularly ratepayers. Ratepayers want value for their money, and want to know their council is performing. They want their immediate needs met, and for council to ensure long term sustainability. An important influence is the changing local government approach to planning, vision setting, prioritisation and management. A further factor is the acceptance of a model of service delivery which identifies the relationship between stakeholders and the Council s inputs, outputs, outcomes and measures. The relationship between these influences is illustrated in Figure 1. Figure 2.1 Performance Monitoring and Reporting Influences Federal and State Government Policy, legislative and regulatory frameworks Corporate, Council and/or Community Planning Vision, Mission, Aims, Values, Behaviours, Major directions and priorities, Management structure The Outcomes and Outputs of the Service Delivery Model Outcomes, Outputs and Inputs Performance Measures Business and Service Planning Priorities, Resource Plans, Risks Budget links Corporate Strategies Individual plans Performance Monitoring and Reporting Organisational performance Department performance Individual performance 3

8 4 The Local Government Experience The need to focus on performance at both the operational (service) and strategic (organisational) levels has become more commonly understood. The Local Government (Best Value Victoria) Act 1999 gave councils the impetus to monitor performance and reporting at the service delivery level, whilst the Local Government (Update) Act has concentrated efforts at the broader organisational level. In terms of the challenges of measuring and reporting, a significant difference between Local Government and successful companies or not for profit organisations is a more limited area of focus. Local Government faces the challenge of managing multiple businesses under the banner of one organisation. This complexity in local government has led many municipalities to develop complex systems. In many cases objectives have become less clear and do not meet the SMART test (Simple, Measurable, Achievable, Realistic, Timely) and the focus too broad as politics and competing interests come into play. The imperative to make a profit or gain market share is not as relevant to local government (and is sometimes constrained by legislation). Despite these challenges Local Government has a strong history of knowledge sharing and being early adopters of modern management practices, such as Triple Bottom Line reporting, sustainability focus, and meaningful community development and consultation practices. This has resulted in a reasonable level of sophistication across the sector in PMR practice. A positive practice that is being applied increasingly in local government is that of longer term planning or strategy setting, and PMR models and frameworks can play a critical role in supporting this practice. The role of strategy in driving budget and expenditure decisions is now commonly acknowledged. A focus on longer-term strategies has also put more emphasis on the need to measure the longer-term impact or outcomes of Council efforts. Councils are now taking a leadership role by assisting their communities to develop strategic objectives, facilitated by more sophisticated approaches to community participation and citizen engagement. The importance of different levels of government working together to achieve broader community outcomes is also recognised, evidenced by joined-up government approaches. Examples of measurement and monitoring tools currently in use by local government include: the Balanced Scorecard (Frankston, Yarra Ranges, Maribyrnong), Benchmarking Continuous improvement program (Frankston), Certification to various Australian Standards (Cardinia, Banyule), Clear objectives (Brisbane, Geelong, Yarra Ranges, Melbourne), variations of the Australian Business Excellence Framework (Moreland, Boroondara) Triple Bottom Line - assessment tools and reporting (Melbourne), Business Excellence Model (Wangaratta), and the Global Reporting Initiative, (GRI) (Melbourne). So what does it mean to have an effective PMR approach in place? It means understanding and responding to an organisation s performance level. It means having the tools in place to monitor performance on an on-going basis, and to then improve performance on the basis of the monitoring results. And finally, it means being able to communicate the status of performance to all stakeholders in a format which is meaningful to them. Readers should note that this guide is considered as one of three produced by working groups from the Corporate Planners Network, covering the linked themes of Performance Monitoring and Reporting, Best Value -Continuous Improvement and Council Planning. We suggest all three should be considered in the development of an effective PMR system. Legislative Requirements The Local Government Act 1989 details the legislative requirements for Performance Monitoring and Reporting in the sector. Figure 2.2 summarises the performance elements contained in the Act. This summary is not intended to replace a detailed reading of the Act, but is included here to show the intention of linking the various documents and the elements of strategy and action setting with reporting. The drivers of performance for local government Our research indicates that many councils are moving beyond legislative compliance to a performance management approach which focuses on demonstrating value and communicating outcomes to the community. The range of ways in which councils respond to council planning legislation is an example of this. Compliance with the legislation requires creating a Council Plan, but many councils go beyond this and also develop a Community Plan. As examples, different forms of the community plans are found at Yarra Ranges, Wyndham, Latrobe, and Whitehorse Councils. The level of monitoring and reporting required for each plan is of course different.

9 Figure 2.2 Performance and Reporting Requirements from the Local Government Act Focus Area Council Plan Budget Annual Report Strategy/Action setting and Performance Reporting Performance Monitoring Resourcing Strategic Objectives Strategies to achieve those Objectives Strategic Indicators Strategic Resource Plan comprising Standard Statements and nonfinancial resources required to achieve strategic objectives Activities and Initiatives to be funded in the Budget and a statement of how they contribute to Strategic Objectives Key Strategic Activities Standard Statements Rates and Charges information Report of Operations including a description of activities and achievements Review achievement against Strategic Indicators Performance Statement listing Key Strategic Activities, targets and measures and outcomes against those targets Standard Statements explaining variances Financial Statements Meeting the legislative requirements then is only one driver for an increased focus by the local government sector on PMR. A key to understanding what else drives performance management efforts is recognising the drivers of performance in local government. Figure 2.3 identifies some of these driving forces and the reasons we consider them to be important. Note that the importance of each of these drivers will vary from council to council. In addition to the drivers of performance relevant to a council, the PMR approach taken by a particular council will be influenced by many factors unique to that council, including size, locality, resources (financial and human), whether or not there is a clearly articulated direction, the level of expertise and of-course the organisational commitment to performance management. Figure 2.3 Drivers of Performance Monitoring and Reporting Driving Force Legislative requirements of the Local Government Act 1989 Commitment to transparency through open and honest communication to internal and external stakeholders Organisational requirements such as the need to analyse business and to continually improve organisational performance Longer term plans and Councils going beyond legislative requirements Demonstrating value to the community and other ratepayers Why is it important? Accountability Compliance Democracy Ensures appropriate good governance (Councillors) Councillor priority setting Assists internal management to monitor performance Informs decision making for current and future service provision Enables closer alignment of council activities to community requirements Provides meaningful and relevant information to key stakeholders Communicates community outcomes 5

10 2.2 Performance Frameworks and Models 6 Often the terms framework and model are used interchangeably. In this guide we use the term framework to refer to the overarching structure of an organisation s approach to PMR. The term model refers to the style of the PMR approach. There is of course no one performance monitoring and reporting framework or model which caters for all local government organisations. There are many options available, and organisations can adapt features of established models to suit the individual organisational climate. Others will take an off the shelf approach and implement a model in its entirety. Frameworks In developing approaches to PMR, councils have found it beneficial to create frameworks, which act as a structure for the development of systems. Frameworks articulate an organisational understanding of the approach the Council is taking. This is of course useful as people across the organisation can understand and articulate the direction being taken, which results in the approach being adequately resourced and supported. Further, a framework serves to illustrate the connection between day-to-day activities and the longer-term objectives of the Council. Further benefits of adopting a PMR framework are listed below: Frameworks can. Ensure alignment between local practices and legislative reporting requirements. Provide a guide for staff members and/or external stakeholders. Facilitate simple communication about the processes of monitoring and reporting practices. Help practitioners to demonstrate to managers the value of monitoring and reporting: What s in it for us? Winning the hearts and minds of the organisation. Outline the roles of Service Units, Corporate Management, Councillors and the Planning Unit, and balances the needs and functions Assist staff to see how their role is linked to the bigger picture. PMR frameworks usually cover the full breadth of performance from the organisational to personal performance planning. The need for individuals to perform and collectively meet organisational goals is linked through formal human resource performance management approaches. Increasingly there are links between organisational and individual performance management systems at the executive level. The frameworks developed by local government have various names including, Strategic Measurement Systems (Hobart), Strategic Planning Frameworks (Geelong, Brisbane) and Integrated Planning Framework (Multiple). Many are hybrid in their nature in that they incorporate elements from a number of different models. Figure 2.4 shows the elements of a generic PMR Framework. It is intended as a summary of the elements typically contained in a framework. Models There is unlikely to be a perfect model which will ideally suit your organisation. Most performance management models will need to be adapted to meet the organisational circumstance, and many councils have done this successfully. What all models have in common however is an objective to create a flexible, adaptive, performance focussed organisation. The Range of Performance Models Commercially profit focussed organisations using formal performance monitoring tools (beyond standard Annual financial management disclosures) often use a Balanced Scorecard model, which is a strategic management system which encourages a focus on the strategies and performance measures which drive success. It requires a balance between the financial perspective with other perspectives, such as business processes, people, environment and governance. Over 50% of fortune 500 companies have adopted the Balanced Scorecard model, and integrate improvement tools such as six sigma for internal process management. Tools such as Triple Bottom Line Reporting (TBL) are commonly used to report to the community Shell s Global Reporting Initiative report is an example of a report using the TBL assessment..another well known example of a performance management framework is the Australian Business Excellence Framework, which is designed to assist organisations to improve leadership practices, assess the performance of their leadership systems, and build those results into strategic planning processes. Some further examples of performance management models and improvement processes are included in Appendix 3.

11 Figure 2.4 Generic Performance Monitoring and Reporting Framework Review Plan Perform Report Best Value review Consultation review LG Act requirements review Do an environmental scan Review Council Plan & Budget Performance Do a strategic Indicator analysis Review Business Plan progress Review staff performance plan progress Review budget performance especially variances Community Plan Council Plan Strategic Objectives Strategies Strategic Indicators Strategic Resource Plan Action plan or incorporated in Council Plan Department Plan Annual Actions Service Level Indicators (Cost and Quality Indicators) Community Report (Progress Report) Sustainability Indicators result Quarterly/Monthly Reporting Software Reports Annual Report Report of Operations Review against Strategic Indicators Business Plan Annual Actions Description of activities and achievements Staff Performance Plan Budget Standard Statements Key Strategic Activities Staff Performance Monitoring Budget Activities and Initiatives Staff Performance Review Monthly Reporting Standard Statements Performance Statement Financial Statements Hybrid systems include an integration of a Balanced Scorecard, Triple Bottom Line or more general business planning and budget based monitoring systems. A range of software packages exists to support PMR models, such as interplan and CorVu (only two examples of many packages available). 2.3 Characteristics of PMR Models The following list of common characteristics of PMR models was compiled following research on PMR practices in Australian local government and leading private sector organisations. The models reviewed included the cities of Melbourne, Frankston, Brisbane, Geelong, Shell, Toyota, and Australian Federal Government Department of Finance. Common PMR systems feature: Systems are linked to service delivery/outcomes not to organisation structure (Brisbane, Geelong). Objectives are measurable. Objectives and measures are clearly linked to strategies. Employees are able to challenge and question systems to find improvements. Systems are able to cross levels within an organisation, i.e. individual goals are linked to team goals, team goals are linked to organisational goals. In this way the strategies and measures are integrated. The systems support review, improvement and knowledge sharing. Decision making and tools linked to delivery of objectives. The financial systems are linked to the achievement of objectives. Community reporting is outcome based for the corporate entities this is often focussed on sustainability issues. The systems tend to have been implemented as a result of strong internal leadership rather than in response to external forces, such as legislation (as example several councils do not have a system for managing the Best Value indicators, although the development of the indicators is required by legislation). From these characteristics a list of common or Best Practice features was also determined. These features are shown in Figure 2.5. Further best practice features of PMR are included in Appendix 2. 7

12 Feature Figure 2.5 Common/Best Practice Features of Frameworks Private Sector Public Sector Clearly articulated direction Outcome and operational measurements Strong evidence base for decision making Continuous improvement focus Integrated tools (BSC, TBL, reporting, performance management) Regular review mechanism Local Government Lessons Learned from Model Analysis Taking a model from one Council and applying it to your own, without adjustments for the organisational operations and culture, is likely to be unsustainable and will fail. Every organisation is different, and these differences need to be reflected in the systems, approaches and practices it adopts. Not only does the PMR model need to reflect your organisational culture, it is also critical that the leadership group is firmly behind any change initiative, and the work has been undertaken to engage critical stakeholders in the process from the outset. In short this means your efforts to implement a new approach to PMR must be supported by a change management program. The influence of the changing demands of the community and the political consequences creates challenges for defining objectives and achieving transparent reporting. It takes strong will on the part of the elected Council and the executive management to commit to a measurable and actionable direction and stay on the path. Political pressures may also result in soft objectives, which are easily obtainable but do not focus on stretching the municipality to real improvement. Measuring What Matters The increasing trend to measure outcomes does not eliminate the need for service level or output measures. There is a need for both levels of measure to co-exist for improvements to be identified and then implemented. A PMR model should include multiple levels of measures. When reporting, councils can then determine at what level the emphasis is placed. For business management purposes, systems tend to be mainly internally focussed and identify and measure inputs, activities and outputs to achieve continuous improvement. External reporting to communities at either a Council or Community Plan level should focus more on reporting on outcomes or impact, many of which tend to be beyond the direct control of Council. Community Plan indicators tend to give a broad view of the current state of the municipality, and in doing so can support longer term sustainability initiatives. Our research indicates there is a spectrum of approaches in practice across the sector which range from service level measures to outcome level measures. Typically a council will be focused at one or the other end of this spectrum due to the fact that achieving a balanced set of measures is indeed challenging. Figure 2.6 depicts the spectrum and the accompanying approach to measure selection. Figure 2.7 shows examples of measures across the spectrum. 8

13 Figure 2.6 Council Performance and Reporting Spectrum Service Level Service Delivery/Best Value approach Council Plans/Business Plans (Internally focused) Internally focused measures Measure Types Input/Activity/Output i.e. cost, quantity or quality actions completed Examples Corporate Planners Network, Resources Outcome Level Strategy and outcome approach Council/Community Plans (Externally focused) Externally focused measures Measure Types Outcome/Longer term Impact i.e. sustainability, well being, social impact measures outcomes achieved Examples Figure 2.7 Service Level to Outcome Level Measures Example Level Objective Measure Type Measure State government objective Local Government objective Environment Strategic Plan Business unit plan Individual performance plan Growing Victoria together Protecting the environment for future generations Vegetation Program committed to a net gain approach to vegetation, with a focus on strengthening the local indigenous vegetation. 4 year Greening Frankston Strategic Plan goal Meet tree planting targets for year two of Greening Frankston Strategic Plan for implementation of tree planting program Ensure appropriate resources sourced to deliver Greening Frankston Tree Planting targets High level broad outcome measure further away from local action Outcome focused at a local level. Links to external State Government objective Reported through Annual Report, State of the City, State of Environment More action focused mix of outcome and output levels Reported in annual report, business plan More specific and directly measurable through outputs. Can be linked to higher level outcomes Reported in business plan Very specific output measures attributable to the individual. Can generally quantify or qualify easily Reported through individual performance plan The extent and quality of native vegetation will increase Net gain in indigenous vegetation Outcome increase tree canopy by 1% coverage by 2008 Output 100,000 trees and indigenous plants Output Plant 27,000 indigenous trees and plants Possible linked outcome rehabilitation of local creeks and waterways through indigenous plantings Tree planting contract tendered and program commenced by 31 August 27,000 trees and indigenous plants planted by July 95% achievement of tree planting target 90% of customer requests managed to service charter timelines 9

14 3 Implementing Performance Monitoring and Reporting You may be new to Council, or to the job, with responsibility for managing a PMR system, which is in place and generally working well. If that is the case, then your job is relatively easy: you need to understand the system and how it works within the organisation. You can then identify the gaps or weaknesses; and develop ways to improve the approach as a whole or aspects of the supporting processes. More likely, you have arrived in the job to find there is no integrated performance monitoring system in place. The mere suggestion that managers actually need to report against the Council Plan can make them break out in a cold sweat. If you are lucky, you may have a CEO who both acknowledges the importance of performance monitoring, and puts some weight behind the organisational changes necessary to set up an integrated system. Even with this support a main part of your role will be education, change management and support. Before starting we suggest you call someone who cares: a colleague at another Council who has been through it themselves, and come along to the Corporate Planners network meetings. When designing, evaluating or redesigning a performance monitoring and reporting system, consider the following key factors: Your understanding: PMR systems design should be based on a detailed understanding of: The outcomes or outputs sought by other levels of government and stakeholders. Service performance as a subset of strategy performance that is services are in place to support the achievement of broader strategy. The measures or indicators needed at the strategy level. The diverse nature of Council businesses, its goals, customers, and required performance. The organisation s culture, history and where the CEO wishes to take the organisation. Achieving transparency: engaging and winning the support of staff through: Involvement, simplicity, a progressive implementation, CEO and management visible commitment and direction, reducing the gap between rhetoric and reality Connection: a need to ensure the performance monitoring and reporting is: A part of the overall corporate management structure of the organisation. Illustrates a clear line of sight for staff between their responsibilities and the objectives of the organisation. Implemented carefully and with an adequate training and change management component. A step-by-step process guide to be used to develop a PMR System based on these key factors is shown in Figure 3.1. Figure 3.1 Process to develop a Performance Monitoring and Reporting System Understand the environment Understand the influencers Decide on approach Change Management Create a project plan Sell to stakeholders Implement An outline of what is involved in each of the steps is explained in the following pages. 10

15 3.1 Step 1: Understand the Current Environment What does the system look like now? Local Government business is not a single product business. It is diverse and tries to satisfy demand from a range of different customer groups. The resulting approaches to monitor and report on performance can be equally diverse. A good start is to develop an audit of what is being done around the organisation. A simple questionnaire can be created for managers. This can also extend to external and statutory reporting requirements. More than likely you will find existing but disparate systems monitoring the budget, service quality, Best Value, service delivery, the Council Plan and the Annual Report. Some points to consider: What reporting is done to the CEO, Executive Management Team, Council, and Community? Is it done on a regular basis or in an ad hoc manner? What meetings are in place to determine organisational strategy and performance? Are these part of a coherent framework/cycle? One of the most significant points of evolution within a system will be the extent to which strategy implementation and the monitoring of performance is critically aligned to the budget decisions and financial resources. Is there a clear outcome and output structure? The strategies, outcomes and outputs relationship needs to be determined in order to choose the right level of measures based on the planning hierarchy. If the link between the hierarchy and the measure types is made, the choice of appropriate measures is easier. Figure 3.2 illustrates the relationship between strategy and measure types. Figure 3.2 Example outcomes and output structure Measure Type Plan Type / Strategy Outcome Long Term Community Plan Outcome Four Year Council Plan Activity/Output/Outcome Business Plan Activity/Output/Outcome Best Value Plan Input/Activity/Output Department Plan Input/Activity/Output Individual Performance Plan 11

16 What has been tried before? In the known history of the organisation, what has worked and what hasn t? Why? Has monitoring and reporting evolved to be part of organisational processes? What were the success factors? What about the software? Too often people think that a software program will solve all their problems. Software is an enabler and can only help when you get the systems right and the staff on board. Different software systems have strengths and weaknesses and it s important to get the right fit for your organisation. If you have a software system already in place and it is not working, you may want to look closely at the organisational issues that are hampering its success. It may be lack of education, lack of resources, failure to see the benefits for individual staff and managers. A range of dedicated Software systems currently utilised by Local Government for Performance Monitoring and Reporting are shown in Figure 3.3. Questions to investigate the use of the PMR software at your Council What are the software systems used to gather and report performance data? Are they only in one area, such as Finance, or are they across the organisation? Where is that information reported, what analysis is done and what decision-making is based on it? Avoid Duplication It is important to avoid duplication of effort in systems. Identifying duplication is a key reason to engage and consult other staff. Eliminating the duplication of effort is a real challenge, but ensuring an integrated system is a means of achieving this. The most obvious example of this is the link between the Budget and the Council Plan. Unless these are integrated, then two reporting systems will run side by side, thereby duplicating a great deal of work and diluting the value of any reporting done. You may think at first there is no system at all, but after some time you will realise that performance monitoring is taking place across your organisation in many different forms. For example: Waste Services may use a quality assurance system. Children s Services have reporting requirements to the Department of Human Services. Finance systems may be independently audited. If you re not responsible for the Council Plan and the Annual Report, then talk to the people who are. You will need to work closely with them to integrate the systems so that it is useful and meaningful for your organisation. Timing is everything! There needs to be careful thought given to the timing of the implementation. Consider the timelines for planning, reporting and budgeting - the best approach would be to integrate implementation around these activity cycles. Give yourself plenty of time to plan the implementation. Tip It took Brisbane City Council at least five years to implement their PMR system. So don t think it will happen quickly, because developing a sustainable system takes time to plan and bring people along. Figure 3.3 Some dedicated software for Performance Monitoring and Reporting Product Provider Users CorVu CorVu Geelong Corporate Information Database interplan Performance Manager Corporate Strategic Systems C A Technology Management & Executive Software Banyule, Knox, Manningham, Monash, Moyne, Surf Coast Baw Baw, Brimbank, Cardinia, Colac Otway, East Gippsland, Latrobe, Macedon Ranges, Moira, Moonee Valley, Moorabool, Mornington Peninsula, Yarra Ranges Maribyrnong, Maroondah This table is designed to give an indication of the range of software available, not to endorse a particular product or provider. As products and client bases are changing all the time, no guarantee can be given of its accuracy. Practitioners are advised to explore all the alternatives to determine which (if any) product meets their needs. 12

17 3.2 Understand all the Influences on the Development of the PMR processes. There are key influences which need to be considered in creating a Performance Monitoring and Reporting Framework. Figure 2.4 summarises these. Figure Performance Framework Influencers Fed/State Government Council, Corporate, Community Planning INFLUENCERS Outcomes Outputs Structure INFLUENCERS CEO leadership; Performance Monitoring, Advocacy Business Planning Diversity of business History What has been tried before? Organisational Values Systems evolution Performance Monitoring and Reporting Organisational culture The Organisational Culture An awareness of the particular culture of your organisation is critical to determining what will work and what won t work. Find out who the opinion makers are and get them on side early. Understand the viewpoints and perspectives of the CEO. A critical success factor is the role the CEO plays in advocating the system. Managing the cultural impacts of implementation is the key to success. Education, change management, public relations and support are very important. Some Councils use planning days. These may involve senior management, or staff from particular units or they might be generic in their content so that they reach most or all of the staff. Sometimes an external consultant can be brought in to talk about strategy or performance management or a steering committee or project team can drive the change process. 13

18 3.3 Decide on the Approach Before starting, be clear in your own mind about why your organisation needs to monitor performance. Do not monitor performance for the sake of it. The approach selected needs to be practical, useful and meaningful. Be clear about what outcomes you want to get from the PMR approach: improved accountability, improved performance, and improved and more meaningful feedback for the staff. Different PMR models will support a different emphasis. Refer to Appendix 3 which identifies the main features of the most common PMR models. Determine how you will meet the legislative requirements as a minimum. Be clear about the legislative requirements for reporting and timelines. Different work areas will have external reporting requirements, either for legislative reasons or because of funding agreements. Wherever possible ensure these requirements can be used internally as well, in order to avoid duplication. 3.4 Create a Project Plan The confidence of your CEO and executive management team will be increased if you develop a project plan for the implementation. A plan is important to give yourself a clear view of the task ahead. Working with people in organisations provides many interesting challenges as things progress, so allow for some flexibility! Don t forget to call on the help of your colleagues within your own council and outside. You will find a lot of support by doing this. Oh, and make sure you maintain a healthy sense of humour! 3.5 Change Management - People and Training It is important for staff to have the opportunity to be involved in the development of the system. This gives them ownership and familiarisation during implementation, as well as making the system more relevant and valuable. Using frameworks which show a clear line of sight for staff between their responsibilities and the objectives or strategy of the organisation will also increase staff buy-in. Addressing the change management requirements is critical to the success of the system. All staff should be familiarised with the way in which the system works. Training may have formal or informal aspects and could include: Holding staff meetings. Providing general support. Initiating regular briefings to staff, managers, the executive management team and the councillors. A formal launch held by the CEO. One on one assistance (coaching, mentoring) Planning days Including a briefing on the system in staff Induction programs Staff workshops/focus groups for on-going system review and development. A formal training program. Distribution of information on PMF frameworks, models, and processes. A good overview of consultation and engagement processes which may also be relevant can be found at the Department of Sustainability and Environment website 14

19 3.6 Sell to the Stakeholders Once the approach is determined and a framework is developed, you can begin the process of selling the system to staff at all levels of the organisation and other stakeholders. There are a number of things that can assist in this task, including: Use the project plan to educate and inform. Consider when and how to involve Councillors, e.g. launches, speeches, messages in key documents, advocacy. Have written material available, and make it easily found on the Intranet. Keep it simple. Develop a marketing plan, inc. branding, promotion and target audiences. Develop and publicise approaches for community reporting. The CEO and senior managers will require support in terms of briefings, presentations describing objectives of the exercise and regular reminders, especially on the key dates. It is important to be realistic. Developing a sustainable PMR system can take time and this fact needs to be conveyed to the organisation, including the CEO. Set yourself realistic goals. More tips from the practitioners In March 2006 the Corporate Planners Network conducted the Shaping our Future, Measuring our Progress forum which included think pods on local government strategy and performance. The suggestions below were made by the practitioners involved in creating, implementing and managing PMR systems as part of their role. This information and other notes from the Strategy and Performance think pod can be found at: /Articles/ Tips for involving the community: Provide feedback and follow up for residents who attend sessions. People want to know what happens to their information. Where-ever possible the personal approach is best. Be aware that there is diversity in any community. A loud voice does not mean there is only one point of view in a community. Engage key groups in the community. Certainly use community groups but look wider than this. Make it worth people s while to attend information gathering and consultation sessions. For example, invite a high profile speaker to attend meetings and introduce the topic for discussion or feedback. Be aware that people are more likely to want to complain than to congratulate! Develop a formal communication process to build community awareness over a longer period of time. Identify what is important to the community and report back to them on that. Get the basics right first. Manningham have set up annual Community Service and Community Advisory Boards as ways of gaining community inputs about performance. Boroondara sought representatives from a cross section of the community to form a Community Reference Panel of 700 people to be consulted as the need arises. Stonnington uses a survey group of 500 people to provide input online and by mail. It is limited however for people whose first language is not English. Attend community group meetings, libraries and festivals. Moonee Valley had 4000 people involved in developing their community plan by setting up stalls at fetes and other community events. Greater Dandenong have an annual survey to consult on community needs and issues. Port Phillip has citizen monitoring groups for issues such as waste management. Local media plays an important role, but unfortunately not always a positive one. Work with your PR people on how the media should be involved in this sort of project. 15

20 Tips for involving Councillors: Evidence based planning and independent advice from groups such as Audit Committees helps test assumptions. Coach and assist the Councillors to be brave. Encourage them to make decisions on valid data and not the squeaky door. Make sure there is clarity between what is being monitored by the CEO and senior management and the Councillors. Identify what it is that the Councillors want to monitor and measure. And finally, remember it takes time! Recognise that many measures may not show a result for ten years or more. You need to have good tracking of data over a period of time to determine success. 16