I attended a two day session put on by The Performance Institute and Association of Government Accountants this week on the subject of performance management in government. It was a great session ( and I managed to knock out 14 CPEs) with some interesting insights on measuring performance in Federal, State and Local agencies. We heard from David Walker (former Comptroller General), Mark Reger (Acting Comptroller at OMB), Lisa Danzig (Associate Director for Personnel and Performance at OMB) and a host of other performance gurus. I came away thinking that although there has been a lot of progress made in measuring performance of agencies, we probably still have along way to go.
So what performance is being measured? Is it the performance of the organization or the performance of its people. I suppose one could say it’s both. Most of the conference was focused on the performance of the organization as far as I could tell. As you might think, some organizations are more easily measured than others. Take US Patent and Trademark Office for example. It’s fairly easy to put into place metrics that not only are easily measured, but reflect the actual performance of the organization…..number of patents issued, length of time to issue, etc. But other organizations are not so easy.. Take DoD for example. So what do we measure to evaluate the performance of the Defense Department? Here’s a possible list:
- Number of wars won
- Casualty exchange rates
- Ratio of of wars deterred/wars fought
- Number of Humanitarian Responses and lives saved
- Number of successful defenses of the Homeland
- Numbers of allies gained vs. lost
- Number of states which have a military base
The list could go on and on. The problem is none of these things can be easily measured. So the Department must use metrics which are all about input, not output.
- Topline Budget number
- Amount of allocated budget spent
- Numbers of ships, airplanes, vehicles purchased
- Number of people
- Number of audited financial statements
- Amount of money allocated to anything
In the Navy, we were pretty good at the input part. I had all sorts of models to help me figure out how much money I needed to ask for…Flying Hour Model, Steaming Day Model, Installation Service Level Model, etc. But none of the models actually reflected reality. We never went back to check and see if we modeled for 26 flying hours per month per pilot, that they actually flew 26 hours per month. In fact, we discovered that instead of relying on a hugely complex flying hour model for the budget, in the end it’s just as simple as multiplying the number of airplanes in the inventory by average flight hour per model the previous year. In the end it didn’t matter how many pilots we had, you could only get so many hours with a fixed number of airplanes. The Chief of Naval Operations frequently uses number of ships deployed, number of sailors deployed and percentage of the fleet deployed as a metric. Here’s a link to the current data.
A few years back, then Secretary Rumsfeld tried to put a pay for performance-based personnel evaluation system in place….the National Security Personnel System. In the end, it failed because we were horrible at trying to link what Pentagon workers did to measurable performance criteria. This turned out to be an impossible task. How do you measure the performance of a budget analyst, for example? Do you link the funding level given by Congress to the analyst’s work? If his or her particular program is cancelled does that mean they failed? The truth is most in the Pentagon work their tails off, but on things over which they have little or no control. I remember the classic example of why the system was flawed. The dialogue went something like this:
Boss: Joe, you just won a performance bonus of $10,000. Tell us what you did to earn it.
Joe: I was in charge of XYZ grants to the field. The goal was to deliver grants to the field elements by July 1st. In the last 6 years the best we have ever been able to do is get them out by July 15th. I set a goal this year to get them out by June 15th. In fact, we got them out on June 10th, not only 5 days earlier that the goal, but almost a month better than we’ve ever been able to do. For that I got the big bonus.
Boss: That’s great work. What did you do that made the difference.
Joe: Nothing, In fact, the dates we get the grants out is solely dependent on when the Congress gives us the money. This year we got it early! Thanks for the bonus!
The moral of this story is make sure that your people have clear goals and that they are measured on things that they can control. NSPS was a good idea. Who can criticize paying people for performance? The problem is in figuring out exactly what people do and how to measure it. Performance management is a great tool, but only to the extent that you can measure performance. Think about the people who work for you. What do they do all day? Who uses their outputs? Where do they really make a difference? Set up your metrics around those questions and you will be well on the way to having an effective performance management system.
One Final Thought
Don’t let your infatuation with metrics become so great that you lose sight of your outputs or mission. In the case of the VA it appears that people were so focused on making the metrics look good that they forgot why they exist…..to serve Veterans. People do funny and unpredictable things when they perceive their jobs are at risk. In this case, people were tweaking something over which they had no control. They would have been heroes had they pointed out that wait times at VA hospitals are not meeting the metrics, instead they are zeros for putting self above service to our Veterans. Time for a change at VA!