Why Should We Measure Performance?

Introduction
Federal agencies, states, businesses, and foreign governments are increasingly relying on performance measurement information to help chart progress in increasingly frugal times.

Performance measurement involves determining what to measure, identifying data collection methods, and collecting the data. Evaluation involves assessing progress toward achieving performance expectations, usually to explain the causal relationships that exist between program activities and outcomes. Performance measurement and evaluation are components of performance- based management, the systematic application of information generated by performance plans, measurement, and evaluation to strategic planning and budget formulation.

Why We Should Measure Performance
Performance measurement improves the management and delivery of products and services. A recent opinion poll asked a group of adults what they thought the Federal government's top priority should be. Almost half wanted emphasis put on better management. In a world of diminishing resources, improving management of programs and services is critical.

Performance measurement improves communications internally among employees, as well as externally between the organization and as customers and stakeholders. The emphasis on measuring and improving performance (i.e., "results- oriented management") has created a new climate, affecting all government agencies, and most private sector and nonprofit institutions as well. A results-oriented organization requires timely and accurate information on programs and supporting services, whether at Headquarters, Field Elements, or contractor locations. Collecting and processing accurate information depends on the effective communication of mission- critical activities.

Performance measurement helps justify programs and their costs. The public, Congress, and Office of Management and Budget are increasingly taking a more "results-oriented" look at government programs, and the cost-effectiveness of program expenditures is increasingly being called into question. In an era of shrinking Federal budgets, demonstration of good performance and sustainable public impacts with positive results help justify programs and their costs.

Performance measurement demonstrates the accountability of Federal stewardship of taxpayer resources. Federal employees and contractors want their day-to-day activities to contribute to a better society. Performance measurement can show that we are addressing the needs of society by making progress toward national goals.

Performance measurement is mandated by the Government Performance and Results Act (GPRA) of 1993 and is central to other legislation and Administration initiatives. In addition to holding Federal Agencies accountable for achieving program results, GPRA also promotes a focus on service quality and customer satisfaction, and seeks to improve executive and Congressional decision making by clarifying and stating organizational performance expectations, measures, and program costs "up front." The Government Management Reform Act of 1994 gives additional impetus to improve management of government performance by requiring, among other things, annual audited financial statements. Agencies must include performance information programmatic and financial) in the overview to their financial statements.

How We Use Performance Measurement
Your organization may use performance measurement for three basic purposes:

Providing measurable results so the Department of Energy (DOE) can demonstrate progress towards goals and objectives. This is done by providing specific measurement results that aggregate to DOE-wide measures.
Determining the effectiveness of your part of the Department. Your organization needs to determine how well it is meeting its mission, vision, and goals. Developing and using a system of performance measures enables you to identify areas needing attention and opportunities for improvement.
Characterizing the performance of a work process can support improvement of that process. Process improvement teams often analyze work processes by breaking them down into related project activities and tasks to improve quality, timeliness, and efficiency.

It is important to note, however, that performance measurement cannot be undertaken in isolation. It is only one step in a continuous improvement process that includes assessment, strategic planning, program and budget formulation, performance measurement, and program evaluation.

Where We Are
The Department began the process of becoming more "results-oriented," with the Departmental Strategic Plan, the Strategic Alignment Initiative, Performance Agreements with the President, and the Strategic Management System that links strategic planning, budget formulation, program execution, and program evaluation. These initiatives stress the communication of results throughout the DOE complex and with our stakeholders.

There are many other performance measurement underway in the Department in various stages of implementation: six pilot projects under GPRA; business management oversight pilots; the contract reform initiative; and the PBM SIG.

Where We Want To Go
The vision is that all organizations within the Department have performance measurement systems to support their own planning and evaluation activities. These measurement systems are part of the Department's Strategic Management System, which addresses appropriate linkages. Through this systems view, duplication of effort will be eliminated by team work and collaboration.

To achieve this vision, organizations that do not yet have a performance measurement system are encouraged to develop one to support their own planning and evaluation needs. Coordination of measures among organizations and reducing burden is the responsibility of every individual in the Department. We must actively work together to develop valid and useful measures and to minimize unnecessary work.