A Framework For Performance Management

City councils, boards of administrators and other governing systems demand a performance management framework that focuses on what outcomes employees will achieve, and how success is going to be measured. This tool reveals how to construct an integrated performance management framework that takes into account the many different functions which a city or a county needs to administer.

This tool is best put to use jointly with Leading at Light Speed, our performance management book that helps leaders create trust, spark innovation and put into action the 10 best practices of high performing companies.

Exactly why is performance management essential?

  1. Because public agencies – like all institutions – operate considerably more correctly when their leaders define what is important and measure it routinely.
  2. Because public agencies require a process that infuses people with a feeling of accountability.
  3. Because leaders need to know what’s performing well – and what needs their particular attention.
  4. Because public officials need to focus on “big picture” policy issues, as opposed to on micro-managing personnel.

The vocabulary:

Experts on performance management often use the following vocabulary:

  1. Outcomes (goals): Long-term results you’re trying to achieve, such as winning market share or improving profitability.
  2. Outputs (objectives): The things you do in order to achieve those outcomes, such as improve sales processes or develop intellectual property.
  3. Core values: The outcomes (results) that are essential to success.
  4. Key Performance Indicators: The most important things to measure – typically the core values plus other important initiatives and outcomes.
  5. Performance management system: The entity you use to aggregate and formulate the applicable information and monitor the results.
  6. Metrics: Items to be regulated, such as the status of customer satisfaction or the rate at which products are meeting their benchmarks.
  7. Standards: The chosen level of achievement for each specific metric.
  8. Targets: The desired level of performance at a targeted point in time (on the way to achieving the standard).
  9. Monitoring frequency: How often you observe the act.
  10. Scorecard: A short-hand way to view the trends over time and identify trouble spots.

Scorecards should be established first for the entire organization, and then for each branch or operative units within it.

Example:

A city council established a “Public Report Card” for performance. It listed the following outcomes under police:

  • Reduce violent crimes per thousand 5% per year.
  • Reduce non-violent crimes per thousand 7% per year.

Working with the city manager, the police chief established division-wide objectives linked to these outcomes. The police chief and city manager then recommended to the city council the following metrics to track. For each metric, a standard and a target were defined:

  • Average response time to Code1, Code 2, and Code 3 calls (per shift per month)
  • Percent of felony investigations completed successfully per month
  • Crimes per thousand (in several different categories)

The city council monitored the performance annually. The police chief, simultaneously, was oberving it every month. The result? Over a two-year period, response times improved; officer availability improved, and the percent of investigations completed successfully improved. Over the same period, levels of violent and non-violent crime declined.

Success Factors:

What makes a performance management system successful? Research and experience shows these to be the important success factors:

  1. Start at the beginning. A solid measurement process is built on the foundation of core values and key performance indicators. If these are not established with much consideration and clarity, application can easily cease to be effective. Once these are defined by senior management, staff should be responsible for defining performance expectations related to the programs and processes needed to achieve these results. Performing a reversal in the progress ends with agitation.
  2. Build focus and alignment. Focusing on the most important outcomes is essential. These should be distinguished in a strategic plan. Don’t try to measure everything. Make sure people in all parts of the organization operate under a set of well-understood performance metrics and targets, not just some.
  3. Establish a balanced scorecard. A good scorecard provides a balanced look at all aspects of the organization. Different types of data are also mixed. Financial performance is a “lagging” indicator of performance, since by the time it’s measured, there’s little you can do to change the results. Customer surveys frequently tip people off to performance issues that are just emerging, and thus are considered “leading” indicators.
  4. Champion the scorecard. Verify you have unyielding dedicatition from the upper management. The performance scorecard must be highly visible and regularly reviewed. Just as the CEO makes sure the overall scorecard is visible throughout the entire organization, senior managers need to make sure their departments’ performance scorecards are visible.
  5. Build “Learning loops.” A measuring system is nothing without the communication to generate shared understanding and ideas for improvement. The leadership team should model this by creating regular forums where they share performance data and discuss steps to improve performance. Mid-level managers are expected to do the same.
  6. Do not fear investing in the system. It requires assets to put together the necessary data aggregation and information management systems. Compiling the data into a suitable scorecard while training workers to identify the performance data shall prove time consuming.
  7. Develop straightforward roles and responsibilities. Gauging performance creates powerful incentives for department managers to participate in order to accomplish essential results. Make sure it’s clear who’s responsible for what.
  8. Prepare for a culture adjustment. When you start to measure performance consistently, it will trigger a change in the organization’s culture. Sharing information about performance and adjusting behaviors accordingly requires a more open culture – one that is comfortable admitting what is going well, what is not going well, and deciding what to improve.
  9. Don’t let the perfect be the enemy of the good. No performance management system will be perfect. Collecting your data may be tough. Finding skilled people with abilities to collect and analyze data may prove to be few and far between. This is not a reason not to do it. All organizations should have performance measurement systems.

Outcomes vs. Outputs:

A performance management framework is relatively easy to build when well-understood outcomes and outputs are in place. Outcomes are the broad impacts you want to achieve. Outputs are the things you do to achieve the outcomes.

Developing outcomes is the responsibility of the governing body and senior management, working with community stakeholders. Developing outputs is the responsibility of management, working with divisional managers and other staff.

A local governing body, such as a city or county, has many quasi-independent organizations serving it. Each should be guided by an integrated set of overall community outcomes. These outcomes should reflect the community’s values – the things it considers most important and expects to get from its local governing bodies.

Performance Management Consulting

To speak with a performance management consultant about how LRI can help you develop performance management scorecards to implement the best practices of high-performing organizations, call (916) 325-1190 or email info@leadingresources.com.