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					                            What’s with all the
                               numbers?
                               Building an Effective
                            Performance Management
                           System to Improve Outcomes




U.S. Department of Labor
   Employment and
Training Administration
                                                        1
                                      Agenda
• The need for a different framework
  for performance management
• Characteristics of an ideal
  framework
• Balanced Scorecard framework
• Corporate Performance
  Management framework
• Core components of a performance management
  system
• Questions?


                                                2
  The Need for a Different
Framework for Performance
       Management



                             3
      Performance Management Defined
Performance management is the practice of
actively using performance data to improve desired
outcomes.

Source: Turning Point, From Silos to Systems: Using Performance
Management to Improve the Public’s Health, 2003




                                                                  4
      The Need for a Different Framework
Common Measures and Performance
Management are not the Same
• The common measures focus on
  “bottom line” results, not the drivers
• The need for timely results
• There is a need for measures that
  align with the mission and strategy (i.e., a focus on
  program business operations and outputs)




                                                          5
      The Need for a Different Framework
Common Measures and Performance
Management are not the Same (Continued)
• Participant impact measures provide a limited
  picture of organizational health
• Participant impact measures alone are insufficient
  to assess continuous improvement




                                                       6
  Characteristics of an Ideal Framework
• Deploys the agency’s strategic
  plan
• Focuses and aligns agency
  activities and efforts
• Tests cause-and-effect relationships
  among the program’s activities
• Family of measurement types reduces risk of not
  meeting “bottom line” measures
• Links performance measures to decision making




                                                    7
   Ideal Framework is Mission-Focused
              Helping Alice Get Out of
              Wonderland
              Your Mission Guides Your Actions…
“Would you tell me, please, which way I ought to go from
here?”
“That depends a good deal on where you want to get to,”
said the Cat.
“I don’t much care where --,” said Alice.
“Then it doesn’t matter which way you go,” said the Cat.
“So long as I get somewhere,” Alice added as an
explanation.
“Oh, you’re sure to do that,” said the Cat, “if you only walk
long enough.”
                                                            8
Balanced Scorecard
    Framework



                     9
          Balanced Scorecard Framework
The Balanced Scorecard is a
performance management approach
that focuses on various overall key
performance indicators, including
customer perspective, internal-
business processes, learning and growth and
financials, to monitor progress toward organization's
strategic goals.
Each major unit throughout the organization often
establishes its own scorecard which, in turn, is
integrated with the scorecards of other units to
achieve the scorecard of the overall organization.


                                                        10
                            Balanced Scorecard Framework
                                                MISSION




                                                                                                Value, Benefit
Value, Benefit




                 FINANCIAL PERSPECTIVE                 CUSTOMER PERSPECTIVE
                 If we succeed, how will we look to    To achieve our mission, how
                 Congress and the public?              must we satisfy our customers?


                         INTERNAL PROCESSES PERSPECTIVE
                         To satisfy our customers, Congress, the public, and
                         mission, what businesses processes must we excel at?


                         LEARNING AND GROWTH
                         To achieve our mission, how must our people learn,
                         communicate, and work together?
           Source: Public sector Balanced Scorecard from the Balanced Scorecard Collaborative
                                                                                                            11
          Why Use Different Perspectives?
Perspectives          Objectives          Measures

• Perspectives are key organizational strategies
• Aid to system and operations management
• Help in diagnosing and troubleshooting
• Prioritizing
• An aid to planning
• Understand improvement
• Tracking performance              To be successful, the
                                   drivers of performance
• External accountability             must be identified



                                                            12
Use a Strategy Map to Develop Objectives

 Perspectives       Objectives        Measures
• Identify strategic themes and group them under the
  appropriate perspective
• Create a strategy map to visualize the interaction of
  individual activities in the larger system
• For each identified strategic theme, identify what
  you are trying to achieve and the obstacles you face
• Develop measurable objectives that specify
  numeric target levels, where appropriate
• Limit objectives to major program elements


                                                     13
   Develop Measures for the Objectives

Perspectives       Objectives       Measures

Each measure should answer one of the
following questions:
• How well did we succeed at providing
  customer value?
• How well do we do the things which
  support creating customer value?




                                               14
               Uses of Performance Measures
Perspectives        Objectives   Measures
• Compare
• Learn
• Motivate
• Reward and celebrate
• Promote and explain




                                            15
                    The Importance of Alignment

     Strategies Should be Aligned at Different
               Organizational Levels

         Perspectives   Objectives      Measures

Agency


Department

 Team/
 Individual




                                                   16
            Chase’s Law on Measurement

Wherever the product of a public organization has
not been monitored in a way that ties performance
to reward, the introduction of an effective
monitoring system will yield a fifty percent
improvement in the product in the short run.


        In other words…
  What gets measured gets done


                                                    17
          Linking Strategy to Measurement
Customer Perspective Example
Initiative: Implement an expanded supportive services
strategy to increase the percent of program completers
from the current rate of 83%
Rationale: Successful completions highly correlated with
increased employment and earnings




                                                           18
Freeware for Creating Strategy Maps
      This is an Example and not an Endorsement by ETA.




                                                     19
 Illustration Using the BSC
           Approach
Increasing the Efficiency and Profitability
         of a Commercial Airline




                                              20
21
Corporate Performance
    Management
An Extension of the BSC Approach




                                   22
                                       CPM Framework
Corporate Performance Management is defined as
the processes, methodologies, metrics and systems
needed to measure and manage business
performance. In the five years since CPM was
introduced, this approach to management has been
credited with many success stories and turnarounds.
CPM builds on the core features of the BSC.

                   Mission             CPM includes
         Refine              Define/
                                       the whole set
                              Plan     of management
                  CPM                  processes that
                                       starts with the
        Review/               Align/
        Analyze              Execute   mission of the
                  Measure/             organization.
                  Monitor


                                                         23
                        Elements of CPM
   Mission        • Organization’s purpose
                  • Vision
  Define/Plan
                  • Value drivers

 Align/Execute
                  • Used to align all activities
                    in an organization
Measure/Monitor


Review/Analyze


    Refine


                                                   24
                        Elements of CPM
   Mission        • Feedback from
                    implementation of current
  Define/Plan
                    strategy
                  • Refine organization’s
 Align/Execute
                    corporate strategy model
                    –   Strategic objectives
                    –   Key performance measures
Measure/Monitor
                    –   Targets
                    –   Strategic initiatives
Review/Analyze    • Communicate strategy to
                    all organizational levels
    Refine


                                                25
                        Elements of CPM
   Mission        • Organizational divisions
                    and units align strategies
  Define/Plan
                    to corporate strategy
                    –   Strategic objectives
                    –   Key performance measures
 Align/Execute
                    –   Targets
                    –   Operational plans
Measure/Monitor
                  • Execute operational plans

Review/Analyze


    Refine


                                                 26
                       Elements of CPM
   Mission        • Continuous monitoring
                  • Track progress on key
  Define/Plan       performance measures
                  • Requires the collection
 Align/Execute      and reporting of timely,
                    accurate, and accessible
                    data
Measure/Monitor
                  • Create and use
                    performance scorecard to
Review/Analyze      see the entire organization

    Refine


                                              27
                       Elements of CPM
   Mission        • Analyze performance
                    gaps on key performance
  Define/Plan
                    measures
                  • Use performance data
 Align/Execute
                    and create a learning
                    feedback loop to educate
                    all levels
Measure/Monitor     – Business insights on
                      performance
Review/Analyze      – Use these insights to
                      understand

    Refine


                                               28
                       Elements of CPM
   Mission        • Decision makers
                    collaborate, sharing
  Define/Plan
                    different viewpoints and
                    ideas
 Align/Execute
                  • Generate integrated
                    insights from
                    Review/Analyze step
Measure/Monitor
                  • Refine corporate strategy
                    and execution plan
Review/Analyze


    Refine


                                                29
                       Key Features of CPM
• Comprehensive and structured
  planning
• Disciplined execution and
  review
• Information-based decision making
• Integrated management processes
• Agile management structure




                                         30
  Core Components of a
Performance Management
        System



                         31
Performance Management System Defined
A Performance
Management
System is the
continuous use of
four practices (see
diagram) that are fully
integrated into an
organization’s core
business
operations.
Source: Turning Point, From Silos to Systems: Using Performance
Management to Improve the Public’s Health, 2003

                                                                  32
                                    Important Concepts
Performance Standards are objective
standards or guidelines that are used to
assess an organization’s performance (e.g.,
80 percent entered employment rate).
Standards may be set based on national,
state, or scientific guidelines; by bench-
marking against similar organizations; based on the
public’s or leaders’ expectations; or other methods.




Source: Turning Point, From Silos to Systems: Using Performance
Management to Improve the Public’s Health, 2003

                                                                  33
                                    Important Concepts
Performance Indicators summarize the focus (e.g.,
talent development, customer service) of performance
goals and measures, often used for communication
purposes and preceding the development of specific
measures.

Performance Measures are quantitative measures of
capacities, processes, or outcomes relevant to the
assessment of a performance indicator.



Source: Turning Point, From Silos to Systems: Using Performance
Management to Improve the Public’s Health, 2003

                                                                  34
                                    Important Concepts
Performance Targets set specific and measurable
goals related to agency or system performance.
Where a relevant performance standard is available,
the target may be the same as, exceed, or be an
intermediate step toward that standard.




Source: Turning Point, From Silos to Systems: Using Performance
Management to Improve the Public’s Health, 2003

                                                                  35
      Review of Critical Success Factors
BSC and CPM Emphasize the Performance
Management System Should…
• Align to the corporate mission and strategy
• Develop meaningful key performance
  measures
• Increase data availability
• Maximize data quality
• Enhance performance reporting
• Improve analysis
• Achieve performance integration
• Drive decision making
                                                36
Questions?




         37

				
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