October 1997

Measurement Study Features "Best-in-Class"

For anyone dealing with the requirements of the Government Performance and Results Act of 1993 (Results Act), a benchmarking study recently issued by the National Performance Review (NPR) provides a wealth of practical information about organizational performance measurement. Serving The American Public: Best Practices In Performance Measurement identifies what makes an organizational performance measurement system "best-in-class." While the study is directed to those responsible for implementing the Results Act requirements to establish organizational performance goals and to measure progress toward achieving them, it will be of interest to those involved in employee performance management as well. Many characteristics of effective organizational performance management are also true of individual employee performance management.

This study builds on the February 1997 Benchmarking Study Report, Best Practices in Customer Driven Strategic Planning. That study documented practices of best-in-class organizations that excel at incorporating customer needs and expectations into their strategic planning processes.

• Successful Systems
• Study Details

Successful Systems. The current study summarizes the characteristics of successful performance measurement systems as follows:

• Senior executives are clearly, consistently, and visibly involved in creation and implementation of an agency's measurement system.
• Performance measures support organizational goals, are understood by employees at all levels in the agency, and set out clear expectations.
• Internal and external communications are effective. An agency's employees are expected to achieve targeted performance, and they clearly understand how success is defined and their role in achieving that success. External stakeholders are the ultimate judges of organizational success, and they understand just how well an agency is performing.
• Accountability for results is clearly assigned and well-understood. Each employee has a clear understanding of his or her individual responsibility in meeting organizational goals.
• Performance measures are limited to those which relate to strategic organizational goals and provide the most useful information for managers as they assess progress in achieving specified performance goals.
• Recognition and rewards are linked to achievement of organizational goals.
• Performance measurement systems are "positive, not punitive." Failure to achieve goals is used as an opportunity to assess organizational shortcomings and make process improvements, rather than as a reason to punish individual employees.
• Information about achieving organizational goals is widely shared with employees, customers, and stakeholders.

Study Details. The study provides valuable, detailed information about establishing and updating performance measures, establishing accountability for performance, gathering and analyzing performance data, and reporting and using performance information.

It sums up by pointing out that successful performance measurement requires organizations to make a commitment to "measure performance and get started," to treat performance measurement as an ongoing process that needs continual change and improvement, and to tailor the process to the organization by developing measures that complement its culture, size, mission, vision, organizational level and management structure as well as its goals and objectives.

The study can be accessed via the Web at http://www.npr.gov. Click on "Library," then on "Special NPR Papers, Analyses, and Databases Benchmarking Reports." Anyone wishing to obtain a single copy of the report may fax a request with their name and mailing address to NPR at 202-632-0390.