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Performance MeasuresPerformance Measures

A model for understanding the behavior of our work

Presented by Wendy Fraser

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ObjectivesObjectives

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

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What makes a “good What makes a “good measure?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

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Performance Measurement Performance Measurement DefinitionDefinition

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?

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There are Measures There are Measures Everywhere!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.

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Why does some Why does some measurement fail?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 ______________ ______________

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The Basics: 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.

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Output v. OutcomeOutput 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

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Qualitative V. Quantitative Qualitative V. Quantitative MeasuresMeasuresA 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?

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Qualitative Measures: an Qualitative Measures: an ExampleExample

What are proxy’s for measuring morale?

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Components of a processComponents of a process

MaterialsEquipment

Methods

Environment People

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InputInput

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

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Output = ResultOutput = 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

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Putting it together...Putting it together...

SupplierSupplier CustomerCustomer

Input Output

PROCESS

MethodsEquipmentMaterials

EnvironmentPeople

PartnersPartners

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Who is the Customer?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)

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Customer?Customer? or or Stakeholder?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”

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Who are your KEY customers and Who are your KEY customers and stakeholders for each process?stakeholders for each process?

Process: Customers: Stakeholders:

Process: Customers: Stakeholders:

Process: Customers: Stakeholders:

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Customer RequirementsCustomer 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

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WhatWhat do you think your do you think your customers care about?customers care about? List some possible attributes:

(e.g. timeliness, accuracy)

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Obtaining Customer InputObtaining 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

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Incorporate RequirementsIncorporate 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

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Building MeasurementsBuilding 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

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MeasurementMeasurement

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.

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Measurement - continuedMeasurement - 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

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TipTip

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

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AlignmentAlignment

H iera rchy of Mea sures

P ro jec t P ro jec t

S tra teg y

P ro jec t

S tra teg y

P ro jec t P ro jec t

S tra teg y

G oa l

P ro jec t

S tra teg y

P ro jec t P ro jec t

S tra teg y

G oa l

P ro jec t P ro jec t

S tra teg y

P ro jec t P ro jec t

S tra teg y

P ro jec t P ro jec t

S tra teg y

G oa l

A g en cy M iss ion

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Alignment Organizationally 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.

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Alignment Organizationally 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.

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Alignment of MeasuresAlignment of Measures

H iera rchy of Mea sures

U n it U n it

S ec tion

U n it

S ec tion

U n it U n it

S ec tion

P rog ram

U n it

S ec tion

U n it U n it

S ec tion

P rog ram

U n it U n it

S ec tion

U n it U n it

S ec tion

U n it U n it

S ec tion

P rog ram

A g en cy

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Supporting the MissionSupporting 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

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Set up for SuccessSet up for Success

Right Measures: Right Measures: what is to be what is to be monitoredmonitored

Right People: Right People: who needs to who needs to know about results?know about results?

Right System: Right System: how will the how will the data be captured, monitored, data be captured, monitored, and communicated?and communicated?

Charter

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“Why is there never enough time to do it

right, but always enough time to do it

over?”

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Criteria for Reviewing Criteria for Reviewing Performance Measure Performance Measure EffectivenessEffectiveness

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The Basics: 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.

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Worksheet time!Worksheet time!

What are potential performance

measures for one of your key

processes?

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Setting up the Accountability Setting up the Accountability SystemSystem

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?

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RememberWhat you measure

drives behavior…

Just drive the right behavior!

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One Final Thought…One Final Thought…

The fewer the measures…

The better!