Measuring program performance for federal agencies : issues and options for performance indicators

federal agencies and assesses their implications for program performance indicators efforts by the GAO and Congress. After first defining "program performance," the paper considers different levels of performance in relation to organizational structure and hierarchies of objectives, articulating the use of objective trees as analytical tools. This provides a basis for identifying types of indicators for different levels of performance, including direct indicators of results (inputs, outputs, outcomes, impact, and significance) and relational indicators that measure "how well" results are being achieved (efficiency, effectiveness, relevance, and sustainability). Other key elements in a performance indicators typology are also discussed, including performance indicators for different kinds of programs (service delivery, regulatory/oversight, intergovernmental, grants, and defense) and different ways of measuring program performance (direct measures, indirect measures, intermediate indicators, leading indicators, quantitative and qualitative measures, and measurement scope). Performance indicator options are then considered in relationship to management needs at different organizational levels. While lower level managers generally require information on operational performance (inputs, outputs, and outcomes), senior managers are primarily concerned with program impact and significance, relying on summary statistics and "management by exception" in monitoring routine operations. Effective management by top executives requires not only clear "vision" and "values," and but also a dear delineation of strategic objectives that both define core programs and suggest how the performance of these programs should be measured. Few government agencies appear to have well defined performance objectives at this strategic level. Congress could play an important role by requiring such objectives and by working with top agency executives to clarify and confirm them. In so doing, Congress would, essentially, be defining performance "contracts" for which such agencies could then be held accountable. This would provide a better basis for managing for results, reducing the need for "micro-management," while also providing Congress with more relevant and targeted program and policy information. Such a performance management focus also has important implications for the GAO. Nearly all of the GAO"s General Management Reviews have identified substantial agency performance information deficiencies. By helping to delineate clearer program objectives and performance criteria, GAO could define a continuing strategic framework better linking its financial audit, evaluation, and General Management Review (GMR) activities in an agency over time. (Author abstract)