Aligning performance measurement with key management processes: Integrating performance measurement with other key management processes helps to focus these efforts on government-wide priorities.

• Author: Clay, Joy A.
• Position: Brief Article

More often than not, implementing performance measurement as an isolated "add on" requirement results in superficial measures and an effort that neither supports improved resource allocation decisions nor ensures that individual priorities are aligned with government-wide priorities. As a result, performance measurement becomes another fleeting management fad of no added value to the organization. Aligning performance measurement with other key management processes, however, institutionalizes performance measurement as a driver of improved management decision making. Drawing on the experiences of the City of Memphis, Tennessee, this article provides a framework for other governments seeking to better align performance measurement with other management processes or reform efforts.

Aligning Management Processes

Alignment of performance measurement with other management processes such as strategic planning, budgeting, quality improvement, and employee evaluation offers the potential for improving a government's overall efficiency and effectiveness. Through alignment, leaders clearly articulate a vision and direction, managers develop operational plans to implement the vision, employees and managers monitor and evaluate results and work to improve system issues, and employees enhance their understanding of how their performance relates to the success of the organization as a whole. The relationship between performance measurement and each of the four key management processes included in this article is discussed below.

Strategic Planning

Strategic planning is a key leadership responsibility. Effective strategic planning must address both external and internal environmental factors and circumstances that affect (or are likely to affect) the continued success of the organization. External environmental factors include the economy, politics, social issues, legal requirements, and technology. Internal environmental factors include organizational capacity, internal politics, employee skills, labor-management relations, and technology. Managers use strategic planning to establish the long-term direction of the organization, develop strategies to move the organization from where it is to where it wants to be, and execute action plans that guide operational priorities.

A critical measure of the quality and usefulness of an organization's strategic planning process is the organization's ability to clearly and specifically develop measurable performance objectives. These objectives guide the future actions of organizational units, provide a blueprint for resource allocation, and serve as an important means of providing yardsticks for feedback on progress or problems. Thus, performance measurement provides elected officials and administrators with information to evaluate the government 's effectiveness in carrying out the objectives identified in the strategic plan. Taken one step further, the integration of strategic planning and financial planning links strategies to resource allocation priorities, both short- and long-term.

Budgeting

A budget is a government's overall resource allocation plan and an important vehicle for controlling organizational action. The budget translates intentions into actions, allocating resources in support of organizational goals, objectives, and service levels. In the public sector, budgeting is highly politicized, as public managers must consider both political and personal agendas while maintaining fiscal accountability to stakeholders. Incremental budgets based solely on historical expenditure levels neglect questions of efficiency, effectiveness, and responsiveness to citizen needs. By contrast, performance-based budgeting offers the potential for linking measurable goals and objectives to resource allocation decisions. As advocated by GFOA and other professional associations, performance measurement is integral to financial accountability. (1)

Quality Improvement

Quality improvement programs have a variety of labels, including total quality management and continuous quality improvement. The intent of quality improvement programs is to focus organizations on productivity, customer satisfaction, and system improvements. Quality improvement programs should...