Two clear trends emerged from a recently completed Government Finance Officers Association (GFOA) research project on current practices in performance measurement and management (1) in North American local governments. First, more governments are practicing these techniques, and many more stakeholders are involved than ever before. In fact, whether it is done well or is merely a token effort, performance measurement--although not necessarily performance management--is now an expected part of a manager's job in most local governments. Second, rather than simply creating a set of measures and reporting them, state and local governments are increasingly using measurement to manage performance. The change from simply measuring to using measures to manage corresponds to a shift from using performance measures largely for accountability purposes to using measures for learning and improvement--a key concept in performance management practice.
Early efforts in performance measurement focused on types of measures, how to measure and what to measure, and on how to present information. As the practice of performance measurement among governments spread, many jurisdictions developed sets of measures--typically by department--and began including them in their budgets. Although some governments created excellent processes, in many cases the measures were static, not closely related to spending, and rarely used to manage, improve services, or make decisions. Until relatively recently, this described the state of the art of performance measurement and management in North America.
The GFOA has conducted research and offered training and informational resources on performance measurement and management practices for two decades. (2) In 2004, the GFOA conducted research into its members' resource needs and emerging practices in the field of performance measurement. A key conclusion was that governments needed access to information that went beyond the basic concepts of measurement. (3) Respondents to a survey that was part of the study identified leadership and strategic planning as the main issues in successful performance measurement efforts. Leadership was seen as an essential component of initiating and sustaining a performance measurement process. Several respondents noted that unless measures are tied to strategic planning, performance measurement is likely to be useless. After strategic planning and leadership, the next most important factor identified by survey respondents was the need for integrating performance management into management processes. Respondents viewed this integration as crucial. As one respondent noted, "Integration of performance measurement into the way the organization does its work is essential. Until this is recognized, performance measurement efforts are 'something extra' and subject to competition with the 'real' work of the organization." The GFOA's State and Local Government Performance Measurement Sourcebook project was an outgrowth of the needs assessment. Sourcebook research methodology is described below.
BROADER USE AND BROADER INVOLVEMENT
An increasing number of governments are using performance measurement and management practices, and performance measurement and management initiatives have broader stakeholder involvement than in the past. In the 2006 electronic survey conducted by the GFOA, 60 percent of jurisdictions reported using performance measurement, and follow-up surveys and interviews found that 40 percent had an organization-wide program or initiative. The steady growth in the number of GFOA members receiving special recognition for performance measurement in the GFOA Distinguished Budget Presentation Award program also reflects the growing use of performance measurement for management purposes. The number of governments receiving this special performance measures recognition grew from three in 2001, the first year the award was given, to 21 in 2006. …