Performance Measurement

Why Measure Performance?

Governments seek to measure performance for a range of reasons—managerial, organizational, political, and for public accountability. They can measure performance on an ad hoc basis or as a part of a larger ongoing evaluation regime. Performance measures can be used to improve the internal management of organizations through the setting of benchmarks and indicators. They can generate the information necessary to assess whether an organization's goals and objectives are being obtained and the level of resources being consumed by an organization's activities. In particular, performance measures can inform managers about the resources used to deliver services, the quantity of services provided, and the achievement of goals and objectives.

Performance measurement can also improve lines of communication within individual organizations and between the various apparatuses of the state. In circumstances where actors are unlikely to share information or experiences, performance measures can be vital in facilitating dialogue and cooperation. Such cooperation can assist governments to overcome horizontal or whole-of-government service delivery problems, facilitate strategic planning, and encourage long-term policy making. Alternatively, performance ratings can facilitate competition between various providers and create behaviors that mirror the benefits of the market. Enhanced competitiveness can be a vital element in ensuring that public programs are delivered in the most efficient and cost effective manner.

In some instances, a dedicated proportion of appropriated budgets may be earmarked for mandated performance assessments that form the basis of future political decision making. Politicians have also embraced performance measures as a basis for decision making, as a way of demonstrating value for money and to enable them to assess the effectiveness and impact of public programs.

Finally, performance measurement addresses an external accountability function, providing transparency [Page 673]and allowing for programs to be evaluated. Results reporting plays a crucial role in informing constituents about the use of public resources and in providing an assessment of public activity. Furthermore, performance measurement can offer a more complete picture of program performance than can be achieved through traditional information provision (e.g., budgets or financial statements). In some countries, performance measurement is even mandated by legislation. For example, federal government organizations in the United States are legally bound by the Government Performance and Results Act of 1993 to provide Congress with performance information on an annual basis.

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