An Overview of Performance Management

Richard J. Fischer

There is a profound feeling in the country that government has not been doing its job--not just that tax dollars are wasted, but that government cannot be counted on to help improve the nation's future or to support the current aspirations of ordinary Americans. This leads to the obvious question of whether the present government organization can operate effectively these days.... The public demands we do more.

Senator John Glenn (1993), during hearings on legislation to require performance standards in federal agencies

The senator was citing the federal government. But no part of the public sector is immune from being perceived as unresponsive, gridlocked, and overly bureaucratic. Citizen surveys, for instance, consistently report that Americans believe that some 40 percent of public funds are either wasted or spent unnecessarily (Bowsher 1993). Citizens' trust in government and in government's ability to make a difference, keeps heading south. Something must be done.

One way to get more "bang for the buck" is through a practice known as benchmarking. Local governments--always looking for better ways to do business and to cut costs--routinely tout it, as do many corporations and state governments. The reds are close behind. The need to "work smarter," recent state and federal legislation, the desire to show results for money spent, and increasing public pressure for accountability help explain some of benchmarking's recent popularity. So does the "bandwagon effect."

The June 1994 issue of Governing magazine cites the benchmarking craze: "Governments that used to pay no attention to their own performance now seem obsessed with trying to measure everything in sight." Increased productivity, lower costs, and greater responsiveness--each of these phrases has a nice ring. But while "benchmarking" is a new buzzword, less than one-quarter

or so of those with benchmarking programs--public- and private-sector users--are actually doing it well enough to yield something useful. The rest either are getting limited results or are spinning their wheels, wasting time, and achieving nothing (Biesada 1991).

Benchmarking is not a panacea, but it is one means of improving program or service performance when properly used. Biesada (1991) describes the process as comparing the performance of your own organization with that of others with out standing performance to find fresh approaches and new ideas:

Benchmarking [is] originally a surveying term for a point of reference. While there are many definitions ..., they all boil down to finding and implementing best practices.... A best practice is the method used by a company that excels at doing a particular activity.

Through a series of performance measures--standards known as "benchmarks"--a person can identify the best in a class among those doing a particular task Then, the best practices are analyzed and adapted for use by others wanting to improve their own way(s) of doing things. Benchmarkers hope to become more responsive to customers, and thus more competitive, by finding and using what works best. Of course, the process also identifies those below the standards as needing to improve.

While some observers privately wonder when the feeding frenzy will fade in favor of a new trend, there is no question that the practice can improve performance and efficiency. This article provides an overview of benchmarking practice. The following piece will focus on "how-to," on the methods and techniques of performance measurement and benchmarking. Subsequent articles will discuss particular aspects of the practices, including utility, applications, and case studies, and will tell how to get your own program in place to assess the performance of any or all of your public services.

A Short History of the Quest to Measure and Improve Government's Performance

Assessing service performance is not new. Back in 1938, ICMA issued Measuring Municipal Activities, suggesting various types of information that local governments might use to monitor various local services and to assess how well these services were being delivered. Less than 10 years later, Japan began benchmarking as the cornerstone of its rebuilding after World War II. There was no need to reinvent the wheel: a lot of companies were doing good things. Finding and adapting dantotsu ("best of the best") gave the Japanese a nice headstart.

In his work with Japan through the 1950s, the late "quality guru" W. Edwards Deming pitched statistics as the basic means of finding out what any system can do and then designing improvements, as indicated, to help the system become more productive (Dobyns 1990). Some 50 years ago, at the federal level, the Commissions on Organization of the Executive Branch of Government, also known as the Hoover Commissions, worked successfully to streamline a federal government grown too large and too disorganized because of the Great Depression and then World War II. Today, we have the Gore Commission, best known for its work on Reinventing Government, along with a series of legislative initiatives at the federal and state levels to streamline the respective governments to work better.

ICMA again entered the picture in 1973 by cosponsoring and providing technical assistance on survey and national measurement issues on an 18-month pilot project of the National Science Foundation that sought to assess the effectiveness of public services delivery. The resulting publications (1977, 1974) gave readers:

... an overview of various aspects of local government effectiveness measurement, including criteria for the selection of measures, uses for such

measurement, identification of measures for [several service areas]..., and early findings on implementation. The [later] report detailed specific measures and data collection ... [and was] intended to supplement, rather than supersede, the 1974 report.

Also for the National Science Foundation, ICMA (1977) issued a separate joint publication to provide a way to measure the overall performance of fire protection delivery systems. The National Fire Protection Association (1974), one of ICMA's 1977 coauthors, previously had released material on the utility of measuring fire protection productivity. (Readers interested in a more detailed history should refer to Hatry's 1989 article.)

Benchmarking traditionally has been associated with cost analysis, focusing on what competitors do and on what it costs them to do it, including machines, materials, and manpower, as well as nonproduction costs such as distribution. Performance-based budgeting became popular after World War II, with an emphasis on efficiency measures as expressed by the cost or number of hours per unit of output (Hatry 1989). In fact, most performance measurement to date in the public sector has centered on financial indicators. As benchmarking's utility has been realized, methods have been generalized easily to apply to nonfinancial services.

Today, the practice of standard setting is everywhere. The U.S. Departments of Labor and Education both have massive projects--Workforce 2000 and the National Educational Goals Panel, respectively--to establish national standards for industry and technical occupations, as well as for education that develops job competencies for use as benchmarks. Independently, the U.S. Office of Management and Budget continues to work with federal agencies to develop standard, nonfinancial benchmarks common to the work of several agencies.

National associations such as the Government Standards Accounting Board, the National Academy of Public Administration, and the American Society for Public Administration have passed resolutions calling for the public sector to use performance measurement and reporting systems. And several states have enacted financial performance reporting standards for state agencies. Others are sure to follow.

One reason for the push is the 1993 Government Results and Performance Act. The new law mandates creation and support of inspectors general and chief financial officers to fight waste in selected federal agencies and to improve accountability for financial and general management. Strategic plans must be set, performance goals established, and an annual report filed with Congress on actual performance as compared with goals. Select federal agencies now must show results before new appropriations are made; no more automatic refundings will occur just because a program was running last year. In exchange for greater accountability, these agencies have been given more flexibility to waive administrative controls to get things done. All of these changes were made so that government could manage for results, not just cite rules and regulations as a defense against action.

What Are Performance Measurement and Benchmarking?

Where do we stand in relation to others' delivering a particular program or service? Who is doing something out there better than we are? What are they doing that we are not, and how can we change to mirror their performance?

Getting quantitative answers to these questions is the essence of performance measurement the determination of how effectively and efficiently (at the .p lowest cost) your jurisdiction is delivering the public service of interest. The process is designed to yield information so that decisionmakers can tell how effectively a program or service has used its allocated resources (Grifel 1993), in

comparison with other service providers. If the answer is "not well enough," you now have that information, along with the basic tools to do something about it.

To measure something--IQ, height or weight, attitude, miles per gallon, personality, an employee's annual performance rating, or whatever--means to quantify it using a defined set of rules. To assess height, for instance, you compare the item with a measurement device (a ruler) to obtain height data. To assess an applicant's potential to do a job, you administer a valid ability test. Some things obviously are more difficult to measure because they cannot be observed directly. But the basic process of quantifying something via defined rules remains the same. Only the particular means for measurement will differ among different variables.

Finding the Best. Whether the category is colleges, restaurants, doctors, or local services, some are simply better than others. Certain colleges, for instance, generally are recognized as best and so attract many applicants. Many doctors who are identified as being the best must turn away new patients, while many parents move to jurisdiction Y just because it has a good school district. And often, you cannot get near a good restaurant around dinnertime.

If a service provider or institution is better, then something makes it better. Performance measurement is the process of finding out what that something is (why is college X better than college Y?). The first step involves identifying performance indicators (what underlies performance?), "operationally defining" each criterion, then quantifying the criteria through measurement. The criteria are the performance benchmarks.

Benchmarking, the next step, refers to comparing several competitors on the same benchmarks to see who is best, finding out why that one competitor is best, and then using the best practices as a means of achieving better performance in your own program or service.

A so-called operational definition is one that defines a variable for the purpose of measurement. Then, you can measure the variable according to that definition, thus ensuring a standard basis for comparison. For instance, "response time" can be defined in several ways; each respondent must know how this benchmark is being defined and must gather data only according to the operational definition that has been established. All users must "start the response-time clock" at the time that a call is received by dispatch--if that is how response time is being defined--or when dispatch relays the call to the units that will respond--if that is the definition. Operationally defining "intelligence" as "score on an intelligence test" means that someone scoring a 130 is more intelligent by definition than someone who scored a 95 on the same test.

Note that performance measurement and benchmarking are not exactly the same, though some people use the terms interchangeably. The initial work done to specify and gather data on the criteria that account for the performance of a program or service is known as "performance measurement." Knowing the factors that are important in effectively performing a particular service or function is the foundation of benchmarking practice. Benchmarking per se is the next step, which is taken to discover what those identified as having best practices are doing that you are not doing.

A Needed Baseline. A performance measure is thus a baseline, standard, norm, or criterion (all of these terms essentially mean the same thing) against which users can assess their own performance in a program or service. Each performance indicator, or benchmark, is one criterion underlying successful program or service performance; services can have many benchmarks on which you can make comparisons, as long as each benchmark is shown to be a valid component of performance.

No single benchmark or range of values possibly can account for the total performance of any program or service. Certainly, some indicators are more

important than others. But putting together a series of valid benchmarks is necessary to gain a good idea of what is needed to improve service effectiveness.

One goal of benchmarking, naturally, is to permit comparisons among benchmarks developed through performance measurements. Although two localities may have similar populations, so many other variables exist that you must question the extent to which direct comparisons really mean anything. Such questions as the following arise: What makes jurisdictions comparable? And to what extent do comparisons with an established benchmark make sense for my own particular jurisdiction? Taking it a step further, what level of performance is considered to be significantly different from the established benchmark?

Issues like these underscore the importance of making performance measurements and of obtaining accurate data on valid benchmarks. ICMA's Performance Measurement Consortium will not simply use members' averages on particular criteria as benchmarks. A range of values will be published, not a single criterion. Physicians, for instance, have learned not to give one ideal weight for any individual but to give a range that the healthy person should fall within. This practice prevents some of the interpretation problems encountered when comparing individual measures against a single value. (The ideal weight for my height is 172, and I weigh 180. Does a difference of eight pounds mean that I must lose a few pounds or endanger my health?). Even some good, valid data are not exact.

Remember that regardless of the quality of data or validity of benchmarks: (1) no data are ever perfect; (2) direct comparisons among competitors (or comparisons of yourself against an absolute standard) should be done only to find red flags; and (3) small differences must not be taken as meaningful.

Also, never expect to make perfect direct comparisons. Either you will come away disappointed, or you will be misled by numbers that you assume are

highly accurate performance indicators of particular services in unique jurisdictions. As CORE (1993) nicely summarizes:

... cities are caught in a bind. On the one hand, they each have unique combinations of economic, demographic, and environmental characteristics that make them difficult to compare [directly]. On the other hand, city officials and citizens want to know if they are being "efficient." To evaluate efficiency, however, requires comparisons.

Performance measurement lets you quantify whatever variables are selected as underlying the performance of a particular service. On the other hand, benchmarking per se is a general means of comparison, the starting point for finding where changes are needed or not needed. The practice is not an end in itself, nor is it an exact science. At best, both performance measurement and benchmarking are rough guides with which to begin the improvement process. What you do to improve may be more important than what you do to find where improvement is indicated.

Defining Performance Measures

Finding good performance indicators is not as simple as it seems at first. Think about what constitutes a good lawyer. "Percent of cases won" is a cloudy indicator because some attorneys take hopeless cases. Annual income is a possible benchmark but what about those routinely working with poorer clients, providing pro bono services, or--as most agree that a good lawyer should do--trying to settle for a lower fee in exchange for not going to trial? How about the criteria that accounts for a reliable plumber, a good doctor, or a safe driver? Because choosing criteria is difficult, achieving agreement that each suggested criterion is important to service performance is an essential step.

It should be emphasized that while a benchmark is a standard, it is not a measure of quality. Nor is it the lowest common denominator among those

delivering a service. One of my favorite moot benchmarks is the one used by the Defense Department's procurement staff as a criterion of performance: number of contracts awarded annually. The more contracts they issued, the better Department of Defense's procurement people were rated at doing their jobs. The performance benchmark of number of patients seen by a certain HMO is just as meaningless, as is the number of letters processed by the U.S. Postal Service. What if 20 percent of the mail is lost or mis-delivered in a particular region? Most times, quantity measures are independent of the quality of services being provided.

Benchmarking 101. Developing performance measures--the heart of benchmarking--begins with a dear statement of the program's mission. Benchmarks flow out of objectives and mission statements, once the latter have been accepted by all parties. Ask your team, What does our program or service do; who are its customers; and what do those customers expect from the program or service? It is first necessary to get agreement on just what it is you do. Else, there can be no benchmarks with which to measure or compare performance.

A mission is the reason why the provider exists, while goals are the results that support the mission. Objectives are what must be accomplished to achieve a goal. For instance, the Bureau of Potholes within the public works department might state as part of its mission "to maintain all city roadways." A goal written in support of the mission, then, would be "to ensure that every city road is clear, passable, and free of potholes and other obstructions." An objective to attain the goal might be "to repair 90 percent of the potholes found within city limits within 72 hours."

One of Edwards Deming's 14 points is "consistency of purpose"; you should decide what business you are in, what your products and/or services are, who your customers are, and how you can stay in business. Buggy-whip makers

may have thought they were in the buggy-whip business when actually they were in the transportation business. Specifically, they were in the field of vehicle acceleration. Even making the best-quality buggy whips was not enough, for consistency of purpose means staying ahead of the customer to meet present needs, as well as planning for the future (Dobyns 1990).

To stay ahead and to plan, you may have to look at your program or service in a new way. IBM did this and moved from being the leader in typewriters to the major player in computing. Because it realized that its mission was communications, not typewriters or machines, it was able to change when the technology used to fulfill its mission changed. Thus, because benchmarking must be a continuous process in order to work well, benchmarks need not remain the same from year to year. They should reflect new information, a revised mission, and organizational changes, among other factors. As such, missions, goals, and objectives must change, with new criteria of success being established.

The next step is measurement, or gathering data to quantify each benchmark. As Deming said with respect to standardization, "Whatever number you get depends on how you count." Einstein put it this way: "Not everything that can be measured is important, and not everything that is important can be measured." Hence the notion of validity, or the degree to which you are measuring the right things the right way. In other words, are you measuring the main criteria that really underlie service delivery and performance? If so, then improving a particular criterion will improve overall performance of the service.

Two other aspects to consider are the reliability and meaningfulness of your data. Reliability is a measure of stability or replicability. A ballplayer who gets six hits in 20 at-bats during the season has hit the magic .300, but so has someone who finishes the season going 180 for 600. Most people would prefer the latter hitter in a critical situation because more at-bats suggests a more stable

batting average, which means there is more reason to expect the latter hitter to hit .300 next season. In the same sense, you should not regard small differences as significant. For instance, while an average response time of 5:25 is better than one of 5:35, you would be hard pressed to show that 10 seconds is meaningful in terms of improved performance.

Performance Measurement Only Gathers Data

But just measuring something does not improve it. Performance measurement is a planning tool. The next step is benchmarking, which is an improvement (i.e., management) tool. At this point, you are comparing your performance with others' work on each benchmark to identify who is performing best on particular benchmarks (best practices) and who is falling behind. The next steps are to analyze what the best practitioners are doing that you are not, and to reengineer best practices for importing, once you have identified these practices. Analysis and reengineering are important because trying to import or replicate a best practice as-is from one jurisdiction to another generally will not work.

Not only can entire organizations use benchmarking to compare themselves against other, similar organizations, but also departments or services within an organization can study the methods of similar units in other places. By the same token, to find a best practice, you need not benchmark the same service across all jurisdictions--or throughout your own industry.

Realizing that services are made up of individual tasks or methods that can be generalized across different fields, Florida Power and Light visited a Japanese utility company, learning, among other things, how to protect power against failures caused by lightning strikes. Motorola routinely looks at processes of firms that are not direct competitors but that do tasks similar to those done by Motorola. This way, the latter learns from these other firms about order processing, billing, and other accounting practices.

Looking for better ways to handle long lines, First Chicago Bank benchmarked airlines; retailer L.L. Bean looked to Xerox for better ways of warehousing and managing materials. And Motorola benchmarked Domino's Pizza for pointers on improving service and delivery times on cellular telephones. (Motorola had learned about benchmarking from Xerox, then applied the concept so well that it won the Baldridge Quality Award before Xerox did.) General Motors recently used the process to design new and innovative, L-shaped assembly lines so that components can be assembled closer to where they are machined. Alcoa, a benchmarking leader, routinely benchmarks other companies on benchmarking (Biesada 1991).

Benchmarking Pointers: Some Final Words

First, do not make a commitment to benchmarking, TQM, or anything similar. Make a commitment to improving. Otherwise, most likely you will become a statistic, one of the 75 percent of organizations simply going through the motions of benchmarking. Basic human nature makes you want to keep doing something in the same way you have been doing it. This may be comfortable, but it is not necessarily the best practice. Staying the same improves nothing.

For proof, visit any driving range. It is a fact that nearly two-thirds of all golf strokes are taken within 100 yards of each hole. But by far the majority of practice time spent by golfers involves shots longer than 100 yards. Most courses do have practice greens for sinking a few putts before teeing off, but when will someone introduce a "short-game range"?

Not surprisingly, research suggests that the least effective people are those who spend the most time doing tasks that they feel most comfortable doing. Golf metaphors can be stretched to cover service delivery. Long and straight driving really looks good, especially on the first hole in front of other golfers waiting to tee off, or at a range. But improving driving will have a minor effect on overall golf performance. It is thus important to focus efforts where they

will do the most good. Users are continually reminded to prioritize: Benchmark first those programs or services with the highest costs, those that bring in the most revenue, or those in which you suspect performance shortfalls (e.g., those that show an excess of citizen complaints or a decrease in revenues). Benchmarking a lunchroom, mailroom, or employees' activity fund probably will not yield the best return on your investment (Swain 1993) when there are so many other choices out there.

Remember that benchmarking focuses on results and improvement, not on creating a public report card. Summarizing the delivery of respective programs or services with a single letter grade may be a quick and dirty means of assessment, but it is not what benchmarking is about. This is not an easy lesson to learn in the real world of councils, where so many managers are in transition. Managers, agency heads, and councils, however, must all understand that the goal is to improve, not to place the blame for any sub-par performances. Identifying a problem and taking steps to resolve it is certainly preferable to not knowing something is wrong, keeping your head in the proverbial sand, or maintaining an inefficient status quo.

Of course, when comparing jurisdictions on benchmarks, even those services found to be above the norm can still improve. Deming preached constant improvement: Top performers should never be content to rest on their laurels. Improving quality, he wrote, automatically increases productivity; the more quality that is built into a product or service, the less it costs to make or deliver. Quality is designed in, rather than inspected in later on (Dobyns 1990). Failing to meet requirements the first time around can take as much as 30 percent from an operating budget or can mean 30 percent in lost sales revenue.

Finally, to obtain real benefits from benchmarking, all users must be ready to accept change and to make a commitment to follow through. An organization's environment and culture must be receptive to change. Successfully implementing

a quality process depends upon, and naturally causes, a change in organizational culture and in traditional ways of doing things. Employees will be doing things differently from in the past. They will be thinking differently, with emphases on responsiveness, customer satisfaction, and doing it right the first time. At Florida Power and Light, for instance, managers and supervisors fill the roles of leaders, coaches, and trainers. In 1989, FPL was the first group outside of Japan to take home the Deming Prize for outstanding achievement in quality management. As Swain (1993) concludes:

Benchmarking will only be a success if the information showing where you fit In against the best competitors can get translated into direct action.... That is the whole point: to change the company into one that is so efficient and so profitable that your competitors start benchmarking themselves against you.

References

Biesada, Alexandria. "Benchmarking." Financial World, September 17, 1991.

Bowsher, Charles W. "Improving Government Performance and Organization." Testimony before the United States Senate Committee on Governmental Affairs, March 11, 1993. Washington, D.C.: U.S. Government Printing Office, 1994.

[State of Minnesota] Commission on Reform and Efficiency (CORE). Local Services Funding. Part I: Comparing City Expenditures. Final report. St. Paul, Minnesota: CORE, November 1993.

Dobyns, Lloyd. "Ed Deming Wants Changes and He Wants Them Fast." Smithsonian, August 1990.

Glenn, John. Part of the senator's opening statements made on behalf of legislation on "Improving Government Performance and Organization," United States Senate Committee on Governmental Affairs, March 11 and May 5, 1993. Washington, D.C.: U.S. Government Printing Office, 1994.

Grifel, Stuart S. "Performance Measurement and Budgetary Decisions." Public Productivity and Management Review, 16(4) (1993), 403-407.

Hatry, Harry P. "Determining the Effectiveness of Government Services." In Handbook of Public Administration, James L. Perry, editor. San Francisco: Jossey-Bass, 1989.

Hatry, H., Blair, L., Fisk, D., Griener, J., Hall, J., and Schaenman, P. How Effective are Your Community Services? Washington, D.C.: The Urban Institute and ICMA, 1977.

Measuring the Effectiveness of Basic Municipal Services: Initial Report. Washington, D.C.: The Urban Institute and ICMA, 1974.

Municipal Fire Service Workbook. Washington, D.C.: ICMA and the Research Triangle Institute and the National Fire Protection Association, May 1977.

Ridley, C., and Simon, H. Measuring Municipal Activities: A Survey of Suggested Criteria for Appraising Administration. Washington, D.C.: ICMA, 1938.

Schaenman, Philip, and Swartz, Joe. Measuring Fire Protection Productivity in Local Government. Boston: National Fire Protection Association, 1974.

Swain, Clark. "Besting the Best: Conversation with Clark Swain." Solutions (the executive magazine of Unisys Corporation), Fall 1993.

Walters, Jonathan. "The Benchmarking Craze." Governing, April, 1994.

Some Common Types of Benchmarks

Benchmarks are everywhere, though most people probably never think of them as such. When buying a stock, for instance, analysts make recommendations based on performance indicators such as earnings ratio, percent of debt, expected profit, and past performance. These are standardized

and validated benchmarks against which most stocks can be compared. On a golf course, par is the benchmark against which golfers are judged--on each hole and on total performance in the round.

And anyone who has ever mailed a letter that took a week to get across town and assumes that this should not happen is comparing observed performance (or lack thereof) with a personal standard. In this case, our benchmark suggests that a letter should not take a week or more to go through a fully automated organization that is charged with moving the mail to travel less than 10 miles.

In fact, the U.S. Postal Service has established as its delivery standard that 95 percent of all first-class mail sent within 500 miles will arrive in one business day. Letters traveling 501 to 2,500 miles must arrive in two days, while coast-to-coast mail (over 2,500 miles) will get there in three days. These absolute standards, empirically developed based on postal surveys of what customers consider to be good mail service, are the same for rating post offices across the country.

As a more common example, consider the baseball batting average. It is the single best measure of any batter's performance. As such, you would have more confidence in a .343 hitter and lower expectations for someone batting .165, just because you know each player's average. A batting average, then, is a benchmark on which comparisons among players at the same level can be made, judging the best (and worst) hitters. Based his batting on average, a .165 hitter, well below the hitting standard, would not be allowed up in an important situation; such an average in the middle of the season strongly suggests that this player needs some work to improve. (In 1992, the major league average for all hitters, not including pitchers, was .269.)

Benchmarking Applications

The obvious purposes of benchmarking are three: to establish the criteria that underlie performance, to identify problem areas within respective services, and to improve service delivery by importing best practices. Of course, effective performance measurement is the key. But the practice of benchmarking has a number of other practical applications, in and out of public administration.

A city or county could use benchmarking to assess its own financial condition. By developing such performance criteria ratios as total revenue/population, debt service/total revenue, and operating expenditures/total expenditures (Brown 1993), the locality can determine objectively its financial condition; then it can compare itself with similarly sized places. Each financial ratio is an indicator underlying financial performance.

Further, indicators can help determine whether the council-manager form of local government is the most effective one. Many observers believe that the council-manager form is better became these jurisdictions are run by experienced professionals--an element that is lacking in the strong mayor system. Benchmarking can provide documentation that services provided by similarly sized council-manager governments are more or less effective than those provided by strong mayor governments.

For international development, benchmarks can be established as performance goals, which also can be used to facilitate development by bringing in the best ways to do things, much as the Japanese did after World War II. As the Labor and Education Departments currently are demonstrating, the establishment of benchmarks as goals to shoot for can assist in planning and development efforts. You know where you want to be at a certain time in the future, so you take the requisite action to get there. Certification and licensure also are types of benchmarks. Here, states are trying to protect the public by requiring those entering certain professions to show that they have the requisite knowledge.

The U.S. military is applying the practice to better management of military bases; not surprisingly, the base commander has many parallels to a local manager. Like a local government, military installations provide their residents and customers with a variety of services, albeit sometimes different ones from those received by civilians. These range from direct support of tactical combat units (air, sea, and ground) to dependent housing, public works, and recreation.

The Navy, for instance, is working to develop Navy-wide base management and quality standards, in an effort to improve the efficiency and effectiveness of base management. Naval bases must provide high-quality services to fleet units worldwide at a level necessary to sustain both personnel morale and combat readiness. To ensure that the requisite levels of service are provided, measurable Navy-wide performance standards for key services are being developed.

Benchmarking also might help in landing a sports franchise. It is common knowledge that potential investors use a series of weighted criteria to evaluate the potential of a locality to support a team, especially an expansion team. What do sports magnates and leagues look for when evaluating the extent to which a city will support a team, and what can be done to make your locale look better to the league? Among the many considerations are financial backing (commitments from investors, advance season-ticket sales, a strong public-private partnership, proposed tax breaks, etc.), population, the proximity of another team in the same sport to the candidate city, and the seating capacity of the local stadium.

A city can (1) find out how well it stacks up on each benchmark, (2) determine how well competing cities perform on each, and (3) be in a position to compare its performance on individual benchmarks against those of other cities also competing for a team. In this way, a jurisdiction can best assess its competitive advantages while also seeing where it might be lacking. Taking steps

to improve an important benchmark can only help a locality to become more competitive in the race to land a franchise.

The process also may cause you to rethink your strategy and pursue a team in another major sport in which you would have a better chance (maybe minor-league baseball). Or perhaps, you may elect to fold your tent and save the additional cost, knowing that it probably would not be a good investment--depending on how heavily the criterion/criteria on which you are found wanting is/are being weighted.

Reference

Brown, Ken, W. "The 10-Point Test of Financial Condition: Toward an Easy-to-Use Assessment Tool for Smaller Cities." Government Finance Review, Vol. 9, No. 6 (1993): pages 21-26.

Do Not Be Ruled by Numbers

Unlike the U.S. Postal Service, local services have no standardized, objective, and accepted service delivery benchmarks. Because many benchmarks are simply averages, several statistical limitations arise, besides, of course, the immediate difficulties of trying to compare New York with a small town in Iowa on the same criteria. (It will not work.)

First off, the average is the descriptive statistic most sensitive to extreme data, which means that outlying data can skew it. This might be a function of benchmarkers collecting the same data in different ways or of basing the avenge on incorrect information. By the same token, if the sample from which the average has been drawn was not random--i.e., if those included chose to be included--there will be no way to know which data values have been omitted and how the data is biased, if at all.

Most important, the average may in reality be too high or too low, even though it is accepted as the standard. For instance, let us assume that through extensive research, a fire service group has shown that when a fire department arrives on the scene within six minutes, lives are saved and property damage is significantly reduced. Arriving in 6:30 means significantly more loss than if the trucks had rolled up in 6:00 or less. Six minutes becomes the benchmark of response time.

If, after reading this feature box, a fictitious (but motivated) group of 40 comparable localities was to develop benchmarks on fire service performance, gather data on each, and rank each jurisdiction on the series of benchmarks. The average response time--one of many performance indicators--is found to be 4:30, with the bottom performers coming in at 5:25, 5:28, 5:48, and 5:55. Assume that everyone measures response time in the same way and that all data collected are accurate.

Results indicate that the latter four jurisdictions are below avenge on response time, which does not look good to citizens or councils. Note that all are below the established national standard. But someone has to be last in any group, even though the localities that ranked lowest are being penalized for being in an exceptional sample.

The moral of the story is not to be ruled by numbers without injecting a bit of thought into the process. By definition, benchmarking is norm-referenced, which means that performance criteria have meaning for individual jurisdictions only when used to compare a jurisdiction with others with similar demographics. Ideally, each service would have a series of objective, absolute, and accepted standards from which objective comparisons can be made. This is one goal of ICMA's Performance Measurement Consortium.

To Contract or Not to Contract

When budgets get tight (and when are they not?), the first thought is to cut people and/or services. Another option is to reassess whether some public services should continue to be provided directly by a local government. Cutting staff is one option, contracting another. The old cost- benefits trade-off crops up: the savings gained in cutting versus the possible negative impact and constituent reaction. If you cut trash collection, how much will the corresponding dollar savings be worth in light of possible decreases in service? Local services are visible signs of tax dollars at work. Most communities would react just as strongly to layoffs of police officers as if library hours had been cut, park hours scaled back, or golf scratched on Mondays at the municipal courses.

Privatization--the idea that the private sector can do better in managing parts of government--is no longer pitched only by conservatives. Can private industry, perceived as being devoid of bureaucracy and regulations, really do it better?

As reported by the Washington Post (1994), Fairfax County, Virginia, has contracted out $11 million worth of fleet maintenance, while Montgomery County, Maryland, evaluates for possible external contracting all planned, new, or expanding programs. Indianapolis has approved an $87 million deal to privatize two wastewater treatment plants; Minneapolis has left the education business by hiring contractors to run the city's 75 schools and $220 million annual school budget; and, at the state level, Massachusetts is transferring the responsibility for specific health care programs, highway maintenance projects, and other initiatives from state agencies to private firms.

The goal is cost savings, but which criteria determine whether contracting out would be beneficial in terms of cost-benefits? Privatization may be cheaper in the long term but may mean a possible trade-off of poorer service delivery, and the need to lay off entire departments. The same Fairfax County previously contracted out vehicle maintenance for its fleet of 1,000 cars and schoolbuses.

Shortly there after, 48 mechanics lost their jobs, and maintenance fell sharply behind schedule. "We lost money and compromised safety," a county supervisor complained, "and privatized despite the fact there would be little or no savings."

Richard J. Fischer is director of ICMA's National Public Service Accreditation Board, Washington, D.C.

COPYRIGHT 1994 International City-County Management Association

This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group.