Reference no: EM132407439

Study Findings

Leadership is critical in designing and deploying effective performance measurement and management systems. Clear, consistent, and visible involvement by senior executives and managers is a necessary part of successful performance measurement and management systems. Senior leadership should be actively involved in both the creation and implementation of its organization's systems. In several public and private organizations studied, the chief executive officer not only personally articulated the mission, vision, and goals to various levels within the organization, but was also involved in the dissemination of both performance expectations and results throughout the organization.

A conceptual framework is needed for the performance measurement and management system. Every organization needs a clear and cohesive performance measurement framework that is understood by all levels of the organization and that supports objectives and the collection of results. Some of the benchmarking partners used a balanced set of measures methodology to organize measures and align them with their overall organizational goals and objectives. The majority had a uniform and well-understood structure setting forth how the process worked and a clear calendar of events for what was expected from each organizational level and when.

Effective internal and external communications are the keys to successful performance measurement. Effective communication with employees, process owners, customers, and stakeholders is vital to the successful development and deployment of performance measurement and management systems. It is the customers and stakeholders of an organization, whether public or private, who will ultimately judge how well it has achieved its goals and objectives. And it is those within the organization entrusted with and expected to achieve performance goals and targets who must clearly understand how success is defined and what their role is in achieving that success. Both organization outsiders and insiders need to be part of the development and deployment of performance measurement systems.

Accountability for results must be clearly assigned and well-understood. High-performance organizations clearly identify what it takes to determine success and make sure that all managers and employees understand what they were responsible for in achieving organizational goals. Accountability is typically a key success factor, but one with multiple dimensions and multiple applications.

Performance measurement systems must provide intelligence for decision-makers, not just compile data. Performance measures should be limited to those that relate to strategic organizational goals and objectives, and that provide timely, relevant, and concise information for use by decision-makers at all levels to assess progress toward achieving predetermined goals. These measures should produce information on the efficiency with which resources are transformed into goods and services, on how well results compare to a program's intended purpose, and on the effectiveness of organizational activities and operations in terms of their specific contributions to program objectives. Many of our partners cautioned against repeating their initial mistake: collecting data simply because the data were available to be collected, or because having large amounts of data "looked good." Instead, organizations should choose performance measures that can help describe organizational performance, direction, and accomplishments; and then aggressively use these to improve products and services for customers and stakeholders.

Compensation, rewards, and recognition should be linked to performance measurements. Most partners link performance evaluations and rewards to specific measures of success; they tie financial and nonfinancial incentives directly to performance. Such a linkage sends a clear and unambiguous message to the organization as to what's important.

Performance measurement systems should be positive, not punitive. The most successful performance measurement systems are not "gotcha" systems, but learning systems that help the organization identify what works and what does not so as to continue with and improve on what is working and repair or replace what is not working. Performance measurement is a tool that lets the organization track progress and direction toward strategic goals and objectives.

Results and progress toward program commitments should be openly shared with employees, customers, and stakeholders. While sensitive competitive financial and market share information generally must be protected, performance measurement system information should be openly and widely shared with an organization's employees, customers, stakeholders, vendors, and suppliers. Many of our partners maintained information on their performance objectives and specific progress toward these objectives on their organizations' Internet and intranet sites for real-time access by various levels of management, teams, and sometimes individuals. Most used periodic reports, newsletters, electronic broadcasts, or other visual media to set forth their objectives and accomplishments.

Not an End, But a Beginning . . .

This report is not the end of our performance measurement benchmarking study, but rather creates a platform for a wide range of beginnings. The approaches identified in this report will be given life by being shared, debated, and implemented in the context of organizational realities. Then, where appropriate, they must be used and improved upon. One of the consistent themes from our benchmarking partners, both public and private, was that effective performance measurement systems take time: time to design, time to implement, time to perfect. Performance measurement must be approached as an iterative process in which continuous improvement is a critical and constant objective.

Another hallmark of the successful organizations we studied was the use of benchmarking to establish performance targets as part of a continuous improvement process. Our partners first detailed their own processes through such practices as process mapping; they then compared these with those organizations, both public and private, considered to be the best. Through this organizational self-analysis and comparison against the best, our benchmarking partners have learned what needs to be changed as well as the processes, methodologies, approaches, and practices that can help them continuously improve. We urge leaders throughout the federal community to establish their own planning and measurement networks and working groups to share their best practices and process improvements with each other.

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