Managing for results: advancing the art of performance measurement.

• Author: Leithe, Joni L.
• Position: Includes related article on Government Finance Officers Association's programs promoting performance measurement - State of the Art

In November 1995, more than 1,100 state and local officials attended a three-day conference on performance measurement coordinated by the Lyndon B. Johnson School of Public Affairs at the University of Texas, the Texas Municipal League, and Texas state government officials. The conference was sponsored by GFOA, along with a host of other state and local government associations and the National Civic League, the Urban Institute, and the Alliance for Redesigning Government.

Keynote speakers included Harry Hatry of the Urban Institute and Jay Fountain of the Governmental Accounting Standards Board (GASB), who spoke about the latest innovations and issues in the area of performance measurement. According to Harry Hatry, more and more governments are turning to benchmarking as a way to measure their performance, in terms of both comparisons to other jurisdictions' performance and goals or targets for performance. Large-scale benchmarking efforts are being sponsored by the International City/County Management Association (ICMA), involving 38 large cities and counties, and by the Innovation Groups, in which more than 100 primarily smaller cities are participating. At the state level, prominent examples of benchmarking through target setting are the State of Oregon's benchmarks program, which has adopted a comprehensive set of goals about the quality of life to be attained in Oregon; the State of Minnesota's performance-based budget and reporting system, which won the Government Finance Officers Association's Award for Excellence in 1994; and the State of Iowa's new benchmarking initiative described later in this article. Some legislatures are beginning to require the executive branch to provide them with performance-related data as part of the budget process, and the term "performance budgeting" has gained widespread usage.

Hatry noted that expectations about what performance budgeting encompasses have risen since the 1960s - when the term meant relating measures of workload or outputs to expenditures - to its current meaning as a process of relating expenditures to outcome measures. He emphasized the difficulty of developing good outcome measures and cautioned the audience not to expect to know the exact relationship between a governmental program and its impact on the community. Begin to use performance measures, he advised, and include them as part of the formulation-of-request and justification processes in budgeting, but do not expect miracles.

The total quality improvement movement was cited by Hatry for emphasizing the use of customer-satisfaction measures of performance. Other innovations in performance measurement are intergovernmental partnerships that establish common performance goals, such as the development of national educational goals by the U.S. Department of Education, state governments, and local school boards. Performance measurement is expanding into an examination of process innovations, into the establishment of more specific standards of performance for contractors, and into a closer look at neighborhood condition. For example, the City of Jacksonville, Florida, has conducted a survey of city service delivery by neighborhood to determine whether individual neighborhoods are getting an equitable share of city services.

Jay Fountain of the GASB emphasized that performance measurement should be an integral part of management and budgeting, and he highlighted areas of the field needing further development. Measuring performance is only one step in the process; unless the data are used to inform decision making and change operations, they are of little consequence. Budgeting should be based on strategic plans, and the progress toward accomplishing these plans should be captured in performance measurement data. If cuts have to be made, they are better done through eliminating spending on lower priority programs rather than by across-the-board...