1. Performance Summit November 4, 2004 Steve Relyea Implementing a Performance Management System in Higher Education College and University Performance Summit

2. Overview The Issues The San Diego Situation The Approach Results & Lessons Learned

3. Performance Summit Issues Confronting Colleges & Universities Inadequate Infrastructure Support Expanding Scrutiny of Costs Conflicting Performance Data Pressure to Expand Services Quality of Service Issues

4. Background on UCSD All Students: 22KEnrolled: 3.5K Average GPA: 4.00SAT: 1,320>70%: Advanced Degrees Applications: 41K

5. Background on UCSD Annual Budget: $1.9B3 rd Largest EmployerMo. Payroll: $62M $710M Invested Locally>53K jobs in San Diego

6. Performance Summit An Emphasis on Research 1 Johns Hopkins University 2 University of Washington 3 University of Michigan 4 Stanford University 5 University of Pennsylvania 6 UCLA 7 UC San Diego 8 Columbia University 9 University of Wisconsin-Madison 10 Harvard University Source: NSF 2004

7. Performance Summit Background on UCSD One of the Youngest of the UC Campuses Organized through Residential Colleges Emphasis on Oceanography, Medicine, Pacific Studies, Technology

8. Performance Summit The Problem Sustaining Excellence of Academic Programs With Limited Resources

9. Performance Summit Vision for University Operations “To support the University’s research, teaching, patient care and community… by delivering superior service to our customers in a responsive and cost- effective manner. ”

10. Performance Summit Financial Perspective How do we look to resource providers? Customer Perspective How do customers see us? Internal Process Perspective Are we productive and effective? Innovation & Learning Perspective How do our employees feel? The Balanced Scorecard Source: Kaplan and Norton

11. UCSD Mission Excellence in Teaching, Research & Patient Care Financial Perspective If we succeed, how will we look to our financial stakeholders UCSD Business Framework Customer Perspective To achieve our vision, how must we look to our customers Process Perspective To satisfy our customers, financial stakeholders, and mission, what business processes must we excel at? People Perspective To achieve our vision, how must our people learn, communicate, and work together? Source: Kaplan and Norton UC San Diego

12. Performance Summit Strategic Game Plan Within limited resources, maintain the most critical support services that will sustain the excellence of the University’s academic and clinical programs. Simplify procedures and reduce workload for academic and clinical departments. Provide our customers with intuitive and flexible tools so they can be successful.

13. Performance Summit Reduce cycle time and improve the performance of our essential support services to students, faculty, and staff. Provide appropriate development opportunities for University staff. Enhance the University’s system of financial controls so we maintain the public trust of our stewardship of campus resources. Strategic Game Plan

14. Performance Summit Disseminate, promote, and put into action UC San Diego’s Principles of Community. Enhance methods of communicating with our key customers. In the area of technology, migrate the campus to a set of standard protocols and tools that will allow for improved customer support in the future. Strategic Game Plan

15. Strategic Initiatives What we need to do Personal Objectives What managers and staff need to do Strategic Outcomes Strategy Our game plan Balanced Scorecard Implementation & focus A Framework For Translating Mission into Outcomes DelightedCustomers MotivatedWorkforce EffectiveProcessesEffectiveProcesses SatisfiedStakeholdersSatisfiedStakeholders Source: Kaplan & Norton Mission, Values, And Vision UC San Diego

16. Performance Summit 2002/032001/022000/011999/00 Business Unit 1 Excess Revenues as a Percent of Net Revenues Excess Revenue$42,463$71,844($4,544)($15,180) Net Revenue$918,285$848,649$686,223$674,541 Percentage4.62%8.47%-0.66%-2.25% Accumulated Earnings$46,144$4,260($53,601)($47,726) Total Assets Turnover Net Revenue$918,285$848,649$686,223$674,541 Total Assets$157,420$57,151$56,980$71,689 Ratio5.8314.8512.049.41 Business Unit 2 Excess Revenues as a Percent of Net Revenues Excess Revenue$35,262$51,162$93,827$14,578 Net Revenue$928,400$852,679$700,137$808,994 Percentage3.80%6.00%13.40%1.80% Accumulated Earnings$366,354$308,429$229,592$136,625 Total Assets Turnover Net Revenue$928,400$852,679$700,167$808,994 Total Assets$473,300$401,305$323,886$210,410 Ratio1.962.122.163.84 The Balanced Scorecard: Financial Perspective

17. Performance Summit Benefits Top/Bottom 2-Box Ratio 99': 8.3 8.2 3.6 4.3 6.8 4.6 15.8 10.2 6.7 97': 5.0 4.5 2.6 3.1 3.7 3.2 5.3 5.3 3.5 94': 2.2 2.6 1.3 1.8 1.9 1.1 2.4 3.0 1.6 Percentage Evaluating: 1999 = 60 1997 = 60 1994 = 53 N = 354 for 1999 372 for 1997 333 for 1994 Extremely Very Somewhat Not Very Not At All Satisfaction Mean Score UCSD CUSTOMER SATISFACTION SURVEY: 1994 - 1997 - 1999 Overall % 22.6 43.9 25.5 6.6 1.4 2 Box Ratio OverallRating AttributesAttributes

18. Performance Summit The Balanced Scorecard: Internal Process Perspective UCSD SimilarCampuses NationalCohortsNationalCohorts

19. Performance Summit The Balanced Scorecard: Innovation & Learning Perspective WorkplaceCharacteristics MeanScoresMeanScores

20. Performance Summit JUNE - JULY Report Benchmarking and Customer Service Survey Data JULY - SEPTEMBER Develop Strategic Plan and Organization Goals AUGUST - SEPTEMBER - Performance Reviews - Identify Individual Goals - Make Merit Increase Decisions SEPTEMBER - OCTOBER - Implement Merit Increase - Develop Departmental Action Plans to Achieve Goals OCTOBER -DECEMBER Implement Employee Recognition Program NOVEMBER -DECEMBER Develop and Forward Annual Report To Vice Chancellor DECEMBER - JANUARY Develop Benchmarking Data FEBRUARY - APRIL - Submit Benchmarking Data - Conduct Customer Satisfaction Survey APRIL - MAY Collect Results of Benchmarking and Customer Satisfaction Survey The BSC Becomes a Foundation of Strategy

21. Implement New Technology Strategy Map: Benefits Unit Source: Kaplan and Norton UC San Diego Learning & Growth Customer Perspective Resource Issues Internal Processes Team Building Program Leadership Development Redesign Organizational Structure Enhance Skills Of Staff Change Telephone Triage System Invest in Additional Staffing Improve Perception of Responsiveness Improve Perception of Quality Of Advice Benefits Service Delivery Strategy Deliver cost effective benefits Services that are valued by our customers Evaluate Methods To Reduce Cycle Time

22. Performance Summit CustomerPerspective Innovation & Learning FinancialPerspectiveFinancialPerspective ProcessPerspectiveProcessPerspective StrategicComponents OpportunityAssessment ChangeChange NumericGoals Actuals & Ratings Ratings

23. Performance Summit What Have Been the Results? Increased Productivity Reduction in Costs Understanding Customer Needs

24. Performance Summit Million Dollar Challenge Program Background –T–Target - Generate $1,000,000 Increased non-student revenue Reduced costs Over a period of 5 years Outcome –$–$891,189 within 2 years –E–Exceeded goal 3rd year

25. Performance Summit Carpet Procurement Program Background Direct purchase Direct contracting of installation Team project Outcome 5-year savings : $1,121,000

26. Performance Summit Custodial - Conditions in 1994 Low Productivity High Cleaning Costs Low Customer Satisfaction Costs/sq ft.94 cents Customer Satisfaction

27. Performance Summit Custodial - Results in 2002 Productivity Increases Reduced Cleaning Costs - $560,000 Increased Customer Satisfaction Customer Satisfaction Costs/sq ft.84 cents

28. Performance Summit Travel Reimbursement--1996 High Level of Errors Average Cycle Time Over 20 Days Low Customer Satisfaction Customer Satisfaction

29. Performance Summit Travel Reimbursement--2002 Error Level Reduced Cycle Time Down From 20 to 3 Days Customer Satisfaction Improved Customer Satisfaction

30. Performance Summit Payroll -- Conditions in 1995 Paper-Based Update Process Paper-Based Time Reporting Process 50% Transaction Error Rate Inadequate Communication with Customers

31. Performance Summit Payroll -- Results in 2002 Distributed Processes Implemented Error Rate Reduced from 50% to <5% Work Teams Established Phone Triage Process Implemented Customer Satisfaction Excellent

32. Performance Summit Finance -- Conditions in 1995 Difficult Data Extraction Process Paper-Based Financial Reporting Process Inadequate Functional Training Inadequate Communication with Customers

33. Performance Summit Finance -- Results in 2002 Financial Link Implemented Financial Link Improved New Phone Triage Process Implemented Revised and Improved Training Delivered Customer Satisfaction Ratings Excellent

34. Performance Summit Community Stakeholders

35. Performance Summit Why Use a Performance Management System in a College or University? It keeps an organization’s focus on what is important It is sustainable over the long-run It is explainable to your people It provides a context for decision making

36. Performance Summit Efforts and planning are aligned with customer priorities It is a great way to evaluate changes to key processes It builds habits of balance, continuous improvement, and accountability to constituents Why Use a Performance Management System in a College or University?

37. Performance Summit Lessons Learned: Things That Can Go Wrong Poor Data Quality Quality Lack of Participation in Measurement in MeasurementDevelopment A Culture that Values Complexity No Linkage to Mission & Strategy No Linkage to Mission & Strategy One-Size-Fits-AllApproachOne-Size-Fits-AllApproach

38. Performance Summit Lessons Learned: Critical for Success LeadershipCommitmentLeadershipCommitment Assessment Will InfluenceBehavior Results Influence Rewards Results Form Context for Planning Results Form Context for Planning CommunicateResultsCommunicateResults

39. Performance Summit Thank You College and University Performance Summit