The Need for a Balanced

Measurement SystemUsing Different Perspectives to Create Meaningful Measures

Bill Rabung and Brad SicklesU.S. Department of Labor

ETA Performance Accountability Team

The Mission of WIA…“…“…increase the employment, increase the employment,

retention, and earnings of retention, and earnings of participants, and, as a result, improve the quality of participants, and, as a result, improve the quality of the workforce, reduce welfare dependency, and the workforce, reduce welfare dependency, and enhance the productivity and competitiveness of enhance the productivity and competitiveness of the Nation" - Sec. 106the Nation" - Sec. 106

National Core and Customer Satisfaction Measures… 17 core and customer satisfaction measures Selection of measures driven by law The measures focus on program impacts, not on operations or strategies Apply separately to States and local WIBs Performance is assessed annually Performance levels are negotiatedIncentives and sanctions based on performance

The Need for a Balanced Measurement Approach to Manage Performance… The national measures focus on “bottom line” results, not the drivers of performance The need for timely results There is a need for measures that focus on program business operations and outputs Customer impact measures provide a limited picture of organizational health Customer impact measures alone are insufficient to assess continuous improvement

The Ideal Approach to Measuring Performance…Deploys the agency’s strategic

plan Focuses and aligns agency

activities and effortsTests cause-and-effect relationships among the

program’s activitiesFamily of measurement types reduces risk of not

meeting “bottom line” measuresLinks performance measures to decision making

A Different Framework for Measuring and Managing Performance…

MISSION

CUSTOMER PERSPECTIVETo achieve our mission, how must we satisfy our customers?

FINANCIAL PERSPECTIVEIf we succeed, how will we look to Congress and the public?

INTERNAL PROCESSES PERSPECTIVETo satisfy our customers, Congress, the public, and mission, what businesses processes must we excel at?

LEARNING AND GROWTHTo achieve our mission, how must our people learn, communicate, and work together?

Value, BenefitValu

e, B

enef

it

Source: Public sector Balanced Scorecard from the Balanced Scorecard Collaborative

Why Use Different Perspectives When Creating and Using Measures?

Aid to system and operations management Help in diagnosing and troubleshooting Prioritizing An aid to planning Understand improvement Tracking performance External accountability

To be successful, the drivers of performance

must be identified

Perspectives

Objectives Measures

Use a Strategy Map to Develop Objectives

Identify strategic themes and group them under the appropriate perspective Create a strategy map to visualize the interaction of individual activities in the larger systemFor each identified strategic theme, identify what you are trying to achieve and the obstacles you faceDevelop measurable objectives that specify numeric target levels, where appropriateLimit objectives to major program elements

Perspectives Objectives

Measures

Develop Measures for the Objectives…

How well did we succeed at providing customer value? How well do we do the things which support creating customer value?

Each measure should answer one of the following questions:

Perspectives Objectives Measures

Linking Strategy to Measurement…Customer Perspective ExampleInitiative: Create a strategy to increase the percent of successful program completers from the current rate of 75%.

Rationale: Successful completions highly correlated with increased employment and earnings.

Leadership Business Results

Strategic Planning

Customer Focus

HR Focus

Process Management

Information and Analysis

Relationship of Baldrige to the Balanced Scorecard

Malcolm Baldrige Malcolm Baldrige Systems ModelSystems Model

Balanced ScorecardBalanced Scorecard

CompareLearnMotivateReward and celebratePromote and explain

Perspectives Objectives Measures

Use of Performance Measures

Wherever the product of a public organization has not been monitored in a way that ties performance to reward, the introduction of an effective monitoring system will yield a fifty percent improvement in the product in the short run.

Chase’s Law on Measurement…

In other words…What gets measured gets

done

Small Group Exercise

Small Group Exercise…Initiative: Your organization created a strategy to increase the employment retention rate of older youth through enhanced training and job development efforts.

Task: Using the approach discussed today, develop short-term customer impact measures that will help your program manage activities to achieve an increased retention rate. Discuss and identify factors influenced by the program that lead to long-term employment (such as placement into jobs with paid benefits) Identify at least one objective (such as to increase the percentage of participants placed into jobs offering paid benefits) Create appropriate measures (such as the percent of participants placed into jobs with paid benefits) Identify potential data sources

For More Information…For More Information…

Balanced Scorecard CollaborativePhone: 781.259.3737www.bscol.com

Workforce Excellence NetworkPhone: 202.693.2990www.workforce-excellence.net