1. 1 Performance Measures A model for understanding the behavior of our work Presented by Wendy Fraser

2. 2 Objectives Understand the basics of performance measurement Differentiate between output and outcome measures; qualitative, quantitative, and efficiency measures Discuss an accountability system based on performance measures Create criteria to review measures for validity

3. 3 What makes a “good measure? ” Supported by solid data or facts Consistent with organizational goals Technically and economically feasible Provides for future evaluation and adjustment Generates understanding and support by employees

4. 4 Performance Measurement Definition Performance measures are indicators of performance that demonstrate changes in the behavior of a process or system. Performance measures should help the decision-maker ask: Is this process getting better, worse or is it staying the same?

5. 5 There are Measures Everywhere! Teenage kids curfew – in by midnight – or else! Cooking measures – recipes, length of time in oven, etc. Deferred Compensation or other portfolios Service delivery times: cable, phone, furniture delivery, etc.

6. 6 Why does some measurement fail? Not feasible Not supported by management Not supported by staff Wrong data being collected Cost to collect the data is too high Measures are not used to make decisions Accountability system not in place ______________

7. 7 The Basics: 1. What do your customers care about? 2. Capture attributes that they care about. 3. Incorporate those attributes into your processes and systems. 4. Measure and monitor the performance of those attributes. 5. Continuously improve the processes and systems based on those indicators. 6. Report results along the way: both internally and externally.

8. 8 Output v. Outcome Outputs are the direct result of your process. An example: the number of licenses issued. Outcomes are the reason WHY the system is there in the first place. An Outcome is what the organization is ultimately trying to achieve. An example: Fair gambling regulation

9. 9 Qualitative V. Quantitative Measures A qualitative measure, such as employee morale, in an expression of a condition, characteristic or belief. Capturing a qualitative measure requires close proxy’s – selecting characteristics that support the condition. It is a judgment process. What are proxy’s for measuring morale?

10. 10 Qualitative Measures: an Example What are proxy’s for measuring morale?

11. 11 Components of a process Materials Equipment Methods Environment People

12. 12 Input Information or product that kicks off the process or causes it to be initiated Provided by a supplier – either internal or external to the organization For a performance Measure: People, budget dollars, equipment performance, forms

13. 13 Output = Result Product or service that results from the process Received by the customer For a Performance Measure: Number of licenses issued Number of Fraud cases solved

14. 14 Putting it together... Supplier Customer Input Output PROCESS Methods Equipment Materials Environment PeoplePartners

15. 15 Who is the Customer? People who receive the direct output from the process—the next in line Can be “internal” or “external” Use your output as an input to their work process(es)

16. 16 Customer? or Stakeholder? Stakeholders are the people or groups who care about this process or the output. They may have considerable influence over the process, but are not the direct recipients of the output. ex: Sponsors, Managers, Legislators, “citizens of Washington”

17. 17 Who are your KEY customers and stakeholders for each process? Process: Customers: Stakeholders: Process: Customers: Stakeholders: Process: Customers: Stakeholders:

18. 18 Customer Requirements What customers need, want or expect from your process ex: cycle time, quantity, fitness for use, ease of use, value Should be obtained directly from the customers Importance vs. satisfaction: use to identify opportunities Feasibility vs. support: use to select options for improvement

19. 19 Whatdo you think your customers care about? What do you think your customers care about? List some possible attributes: (e.g. timeliness, accuracy)

20. 20 Obtaining Customer Input Identify “quality attributes” The customer defines what is meaningful Solicit input – ask the customer what they use the service or product for Incorporate those attributes into your process or system. Build a measurement system around those attributes Report back to the Customer and employees

21. 21 Incorporate Requirements After you have been through the validation of customer requirements, ensure you have those elements in the process and output(s) Use your staff to help you modify the process so that you are meeting the customer needs and requirements

22. 22 Building Measurements Based on the information collected and validated from your direct customers, create a series of meaningful performance measures to monitor the key requirements from your customers

23. 23 Measurement For example, if your customer cares about timeliness – create a measure or two that will tell you how fast your process is If they care about accuracy, create measures around percentages of errors found, etc.

24. 24 Measurement - continued Consider how you will display and share this information will all staff and managers Measures should be created to tell you whether the process is getting better, worse, or whether it is staying the same Measures can be best expressed by indicating WHAT is to be measured and couple that with the UNIT of MEASUREMENT For example, documents per week, errors per form, calls per person

25. 25 Tip It’s important to weigh the cost of gathering the data for a measure with the time and money you have available It may take you several tries to find some meaningful measures You should have at least one measure for each key requirement of your customers

26. 26 Alignment

27. 27 Alignment Organizationally Mission: Pick a few leading outcome measures that tell you if you are accomplishing your mission. These may be difficult to measure and may have longer periods of time in between the measurement cycle. For example: Overall compliance with regulations or customer satisfaction at the agency level may be measured on an annual basis.

28. 28 Alignment Organizationally Goals: Pick leading indicators that will tell you how well you are accomplishing your goals. These may be measured more often – such as quarterly. Strategy:Strategies support goals and can have indicators as well. Projects: project indicators need to align specifically to the process, product or service in order to assess whether the project worked to impact the strategy and goal.

29. 29 Alignment of Measures

30. 30 Supporting the Mission Measures may be created to align vertically in the organization. Agency: Increase voluntary compliance with state laws Program: License Review Section: Complete 99% of license applications within X days of receipt. Employee: Number of completed license applications within specified period without delay or errors

31. 31 Set up for Success b Right Measures: what is to be monitored b Right People: who needs to know about results? b Right System: how will the data be captured, monitored, and communicated? Charter

32. 32 “Why is there never enough time to do it right, but always enough time to do it over?”

33. 33 Criteria for Reviewing Performance Measure Effectiveness

34. 34 The Basics: 1. What do your customers care about? 2. Capture attributes that they care about. 3. Incorporate those attributes into your processes and systems. 4. Measure and monitor the performance of those attributes. 5. Continuously improve the processes and systems based on those indicators. 6. Report results along the way: both internally and externally.

35. 35 Worksheet time! What are potential performance measures for one of your key processes?

36. 36 Setting up the Accountability System How do you plan to make decisions with them? Will you hold managers accountable? Do you want a universal system? How will you display the measures? How will you ensure alignment with organizational direction?

37. 37 Remember What you measure drives behavior… Just drive the right behavior!

38. 38 One Final Thought… The fewer the measures… The better!