A Best Practice from the Government Finance Officers Association: Performance Measures

GFOA recommends all organizations identify, track and communicate performance measures to monitor financial and budgetary status, service delivery, program outcomes and community conditions.

When identifying performance measurements, governments should focus on making sure that measures meet the following conditions:

• Useful — measures should provide information that is helpful to decision-making, understanding or accountability efforts.
• Relevant — measures can be clearly linked to the service delivery/program outcomes they are intended to measure, are appropriate for the outcome being measured and are readily understandable.
• Reliable — collection methods and measure definitions need to be understood so stakeholders can rely on the information. 
• Adequate — an appropriate variety of measures are used to measure performance and the measures do not incentivize behavior that adversely affects  the measures such as a quantity versus quality scenario. There is often not a single measure that can provide sufficient context and understanding.
• Collectible — measures are readily available and do not involve excessive time/effort to collect.
• Consistent — measures can be regularly collected to track outcomes over time and avoid need to continuously identify new measures.
• Environment — measures include variables related to external factors that impact service delivery and program performance.
• Responsibility — clearly identify responsibilities for collection, storage and dissemination of the data
• Systems — existing data collection capacities are leveraged appropriately or new systems are identified to ease the burden of data collection.
• When communicating performance measures internally ensure the following:
• Expectations — clearly communicate how performance measures will be utilized in decision-making and across all levels of the organization.
• Purpose — emphasize that performance measures are used to inform decisions and facilitate improvement and understanding. Governments should be careful to avoid performance measures that are collected to simply show achievement for the purpose of soliciting recognition or rewards.
• Similarly, less than favorable outcomes should be evaluated to understand the root cause of the issue and avoid quick punitive actions as this will make accurate data collection efforts more difficult in the future.
• Clarity — clearly articulate the performance measures, including both expected results or targets and actual results.
• Data Integrity — the source of the data and how the data is interpreted or used to draw conclusions should be clearly and fairly articulated.
• Context — provide background on why these particular performance measures were chosen, such as cost, timeliness, availability, etc.
• Production — reference sources of performance measures and how the measures were collected.
• Dissemination — ensure performance measures are distributed throughout all levels of the organization and are made readily available.
• When communicating performance measures externally, the following items should be addressed to ensure measures are readily available and accessible:
• Delivery — how and where will the performance measures be communicated?
• Audience — identify who the primary audience will be.
• Format — what is the best way to present the information?
• Frequency — how often will the performance measures be communicated/updated?
• Clarity — explain the exact source of the data, how the calculations were conducted and why, what the performance measures show, both expected results and actual results.
• Context — provide background on why these particular performance measures were chosen, why, if any target measures were set and why, and what the results mean to operations, service levels, or community outcomes.