The Model

2.1 PERFORMANCE BASED MANGEMENT SUMMARY

Performance based management is management that defines and measures program success through the achievement of desired changes in the behaviors or conditions of clients served, at an acceptable cost.

Performance based management ties management program and treatment functions directly to client outcomesthe only meaningful criterion for program success. Indicators of program activities/services are only useful to they extent that they are tied to results.

2.1.1 Performance based Management Model

The steps in performance based management:

Step 1: Identify the people to be served and problems and needs to be addressed.

Step 2: Identify the community or organizational outcomes to be achieved.

Step 3: Identify the program level outputs that can be directly related to the community or organizational outcomes.

Step 4: Define the program activities likely to produce each desired program outcome.

Step 5: Acquire, allocate and manage resources to accomplish critical agency activities.

Step 6: Monitor key agency, client and organizational performance indicators.

Step 7: Evaluate client outcomes and measure program impact on those outcomes.

2.1.2 Building a Performance Based Management System

The quality of any human service delivery system can be assessed on two major criteria. One of these is a measure of efficiency or the ability of the system to deliver services to the greatest number of persons at the lowest cost. Utilizing this approach, measures of the processes or activities performed by an agency such as the number of persons served or the number of units of service provided are collected and examined in relation to the costs associated with the delivery of program activities. Until recently, human services have largely been managed to optimize efficiency. Thus, management information or reporting systems have collected data in order to report on the quantity of services offered and use of those services by eligible people in the community.

A second way in which we can assess the quality of the service is through measures of effectiveness. With this approach, measures of the outcomes that are generated by program activities or the results achieved by those who have received assistance are collected. Thus, effectiveness based management strategies are designed to promote knowledge, attitudes, or behavior that reflect significant changes on the part of people who are served such that program success is defined by these results rather than by the processes that produce them. This management approach is referred to as "results oriented management" or "performance based management".

The implications of program transitions from efficiency or process measures of performance to effectiveness or outcome measures of performance are significant. There is increasing pressure being placed on human services agencies of all types to be able to prove that they truly make a difference in the lives of those they are serving, not just that they are busy providing activities which cannot be demonstrated to have proven results. Funding agencies, including the Department of Defense, are increasingly skeptical of activity based measures of performance and need to see evidence that their investments in personnel, training, equipment, and space are paying off in the changed lives of those who are being served. This has resulted in a dramatic push to develop outcome based indicators and performance based management systems both within and outside of the Department of Defense.

The University of North Carolina at Chapel Hill December, 1996

The focus of a performance based program is on the outcomes to be achieved rather than the activities to be developed and provided. Everything that is done and every resource that is dedicated is devoted to accomplishing clear-cut outcome goals that can be measured and demonstrated. Thus, in this context, indicators of program activity are only useful to the extent that they are tied to results. While this sounds obvious on the surface, it is a very significant change in the way in which most human service programs operate. We often think in terms of the outcomes that are generated by our activities rather than the activities that are necessary to produce outcomes. The focus in a performance management system is on the outcomes; activities are only means to ends not ends in themselves.

There are several major steps necessary in order to develop and implement a performance driven service system. These start with identifying the key client or customer groups that are to be served and their specific needs. Then a shift is made to identify as clearly as possible the organizational (i.e. Army) and client outcomes that must be achieved as a reflection of needs being met and organizational objectives being addressed. Outcomes are chosen because they are highly valued, desired by the community and reflect an area in which an agency can have an impact. Having identified these outcomes, then it is important to identify the types of activities that can be directly related to the specified outcomes. In this type of system the focus is shifted from activity based accountability to accountability for outcomes.

The first step is to clearly specify who the people are that a program is targeted toward and their specific problems or needs that justify a potential service program or intervention. While a primary prevention program may target the entire community, it is best to acknowledge that there are specific people in the community who are at the greatest risk for having a particular problem or challenge in their lives and that these at-risk people are the ones that are most likely to be of concern. Ask yourself: who are the people most likely to have a particular problem? Who are the people most likely to either self refer or be referred by others because they need help in a particular part of their lives? What are some of the prevailing conditions in their lives that make it likely that they will be at risk for some condition that may require intervention? If you have limited resources, from whom are you most likely to get the "biggest bang for the buck"? What are the specific needs that previous research or other evidence suggest these individuals or families have?

Step 2: Identify the community or organizational outcomes to be achieved

This step is a significant leap forward in thinking about the kinds of system level results that should be achieved if the problems and needs of the client population are addressed. In other words, how would the organization or community be different if peoples' needs are truly addressed or the problems that are characteristic of their lives are significantly reduced? What benefits would the system itself find so desirable so that it's willing to invest significantly in interventions that will achieve the outcomes that it can value and support? In a public environment, what kinds of outcomes would taxpayers be willing to invest more resources in, in order to assure that these outcomes can be derived? In a military context, what benefits or outcomes will accrue if the needs and problems of soldiers and families are more effectively addressed in the areas for which our program might be responsible?

It is important that these outcomes are carefully defined and defensible. Organizational or community level outcomes are often influenced by many factors but the outcomes to be achieved should be logical consequences of the agencies efforts to solve the problems and needs of the potential client population. The desired outcomes should also be few in number, stated in non-technical terms, and easily understood inside and outside the agency responsible for program activities.

These program outputs are the ones for which the agency is primarily responsible and they should have clear ties to the outcomes or benefits the organization wants to achieve for its people. Program outputs are referred to in Total Quality Management as "critical success variables" or "critical success factors". These are the agency or program outcomes that if achieved will have the greatest chance of assuring that the individual, family or community outcomes will occur. Identification of critical program outputs sends a very clear message about how program performance will be measured.

There are many potential outcomes that program activities might generate but these critical outputs are the ones that programs acknowledge they want to be directed toward and measured against. Usually, program outputs like these are based on a careful review of research evidence or program evaluation results or, in the absence of scientific evidence, clear logic that can be used as a basis for directed program activities and subsequent evaluation evidence. Ultimately, good program output indicators should be few in number, easily understood, related directly to agency activities, and worded in such a way that the service population is the group for whom the results are to be achieved.

Program activities are designed to produce outcomes instead of responding directly to client needs. In performance based management, activities are oriented forward toward results rather than backward toward either client or program needs. Only those activities which can be clearly defined in terms of their probable impact on results can be supported in this type of performance management model. All to often, programs develop shotgun-type activities that attempt to "be everything to everybody". When this happens, the scope of activities ranges from those that are effective to ineffective, and often the overall results are at best mixed or worse, completely unknown.

Activity measures in a performance system are directly related to specific program outcomes and the responsible agency is now the "actor" in the information system. But only those agency activities are measured which can be directly related to program outcomes. For example, simple counts of people served are to be avoided in favor of the percentage of the target population that is reached. The latter is a much better indicator of whether the program is likely to produce outcomes for the target population than the former. The focus here is on activities which are specifically targeted towards program outcomes and only a limited number of measures of activity are necessary to gauge performance in relationship to intended results.

This step refers to program planning, fiscal management and budget allocation and analysis. If accomplished under performance management criteria, all resources should be able to be measured in terms of their direct or indirect contribution to those activities which are designed to support specific program outcomes. In management terms this is referred to as the ABC model of "Activity Based Costing". The proportional contribution of activities to outcomes should be able to be measured and the cost effectiveness of each activity can then be defined. The overall model allows for a "return on investment" analysis in which outcomes or benefits can then be attributed to specific activities and costs, thereby justifying the intervention within a formal accountability structure.

The system just described establishes a set of key indicators at multiple levels that can be used to assess program and agency performance. The data
that is derived can include quantitative and qualitative reports. But all of the indicators will be capable of being measured in a way that clearly justifies program operations. The types of outcome indicators that are likely to be needed include the following:

• Knowledge: these indicate improvements in the level of knowledge that is necessary in order to be able to operate effectively in the area of concern for the agency.
• Attitudes: these include perceptions or beliefs that are considered important to achieving desired outcomes or reflect outcomes that the agency or organization considers necessary for optimum performance.
• Behavior: these are specific behaviors or activities that should occur if the program has been effective or that the community deems necessary on the part of some portion of its people.
• Cost effectiveness: these results should indicate that the benefits derived from the intervention are worth the costs or investments made in the delivery of those benefits.

Step 7: Evaluate client outcomes and measure program impact on those outcomes.

The final step in building a performance based management system is the periodic and comprehensive assessment of the extent to which client and organizational outcomes are being achieved by the program activities that are delivered. All too often, this step is ignored and the results of interventions are unknown. Without evaluation, human service agencies are often " shooting in the dark" with no real data to determine how well they are meeting their mark and achieving the intended results for which they are funded.

Evaluation needs to be considered an ongoing activity that is part of any intervention. Agencies should continually focus on improving the outcomes they intend in terms of knowledge, attitudes, behavior and cost effectiveness. Without evaluation, there is no way to tell if one intervention is better than another or if one works better with one target population compared to another. Furthermore, lack of good and ongoing evaluations leads to public and organizational mistrust of human services and the over reliance on anecdotal or exceptional case data as justification for program operations. When funds are not short, this type of justification is sometimes adequate but when tight times come, impressionistic data is usually insufficient to support continuation of program resources. Unfortunately, this means that programs that do not have good performance indicators and outcomes suffer in the competition for scarce dollars.

Conclusion

This performance based management strategy should result in a more defensible and accountable program and agency practice. It should also result in services designed to produce relevant community and organizational outcomes and provide a set of indicators that will keep program activities accountable to those outcomes. Another potential benefit is that the indicators selected to monitor program performance will be directly related to measures of program effectiveness providing the kind of ongoing justification needed to support continued funding during an era of scarce and competitive resources. Program managers should also see this type of system as promoting more effective linkages to other agencies and as leading to a more cooperative spirit as agencies work together to accomplish outcomes for which they have joint responsibility.

Program Output

Program/Activity

Customer Needs

Definition:

Performance Based Program-- Program Outputs: The results achieved by the intervention program at the termination of service that can be directly tied to program interventions.

Owned by the intervention program

Necessary precursor to outcomes

Strong evidence to support

Able to be measured

"Critical success variable"

The interventions employed by the agency or agencies to achieve specific program outputs that are designed to affect needed outcomes.

Necessary to produce program outputs

Clearly tied to needed outcomes

Balance in primary, secondary and tertiary prevention and crisis response

Management information driven

The specific needs of individuals, families, communities or organizations that are required to enhance the development or achievement of critical objectives.

Defined needs assessed

Customer input required

Needs monitored in terms of outcomes

Target groups carefully developed