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Follow the Performance Metrics

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Nathan Favero
August 26, 2019

Investigators know that when it comes to solving crimes, they should follow the money.

Well, when it comes to understanding public organizations, we should follow the performance metrics.

We live in an age of trying to quantify everything. Standardized tests tell us how much our children are learning. Amazon reviews tell us how good a product is. And 5-point appraisal ratings tell us the performance of federal employees.

But creating good measures of performance in public organizations often turns out to be rather tricky.

First, it can be difficult just to agree on exactly what the goals of an organization are and how to prioritize them. For example, law enforcement agencies are supposed to keep us safe, but many also expect them to respect civil liberties, steward public resources efficiently, provide the public with accurate and timely information and submit to democratic accountability and transparency. Different stakeholders tend to pull organizations in different directions, and there is often no consensus on how the organization should prioritize various competing goals.

Second, it’s often difficult to clearly assign responsibility for positive outcomes to specific actors. Sure, we can measure the crime rate. Or the employment rate. Or the mortality rate. But many factors beyond the control of an organization affect each of these outcomes. What we really want is a measure of how much an organization or an individual did to improve a given outcome, but this is extremely difficult to know. Maybe the police department was doing an excellent job, but crime rates went up anyway because something about the community changed and led to higher levels of violence. Maybe the teachers did a poor job this year but standardized test scores improved because this year’s students were especially talented.

Another challenge when measuring performance is that some metrics are subject to manipulation. At one extreme are people who break rules or lie in order to change their numbers. For example, teachers in various school systems have been caught changing student answers on standardized exams. Much more common, though, is the problem of rule-abiding teachers who, “Teach to the test.” Such behavior is just one example of public employees doing something that improves their performance numbers but doesn’t actually further the organization’s mission. If managers overemphasize quantity of output when assessing employees’ productivity, employees can grow disillusioned and let the quality of their work slide since high quality goes unrecognized.

Managers and employees are not the only ones who look at performance information. Many public organizations now receive formal performance assessments that are publicly released so that ordinary residents can learn more about these organizations. Consumer-oriented websites where people can easily compare the performance ratings of various organizations are becoming common in areas like education or healthcare where residents can often choose among multiple service providers.

As formal performance metrics grow in prominence, it is more important than ever to seriously consider concerns about the quality of these metrics. The more that people rely on metrics to make decisions, the stronger incentives become for people to manipulate them. If potential clients start choosing nursing homes based on performance ratings, nursing homes will be motivated to raise their performance scores. With a high-quality measure, this is a great things since a nursing home will have to improve its quality of service in order to raise its score. If, on the other hand, the performance metric can be easily manipulated, the nursing home can just adopt cheap workarounds that improve its score without ever improving client experiences.

In other words, how we measure performance really matters. Whatever we reward with our performance metrics is what we are likely to get more of.

As mentioned earlier, there is often disagreement among stakeholders about prioritization of various organizational goals. Whoever wins the battle over how to measure performance will likely win the battle over the direction of the organization.

So if you think equity is important, make sure there are performance measures that indicate how equitable the organization is. If you think the organization needs to focus on long-term objectives, make sure performance measures somehow reflect activities that will build toward long-term goals. If collaboration among employees is important, make sure that measures of employee performance reward collaborative behaviors.

When it comes to providing information about performance to the public, which goals should be emphasized? One approach is to let members of the public make their own decisions about what is important. Organizations can collect and disseminate multiple performance metrics that each reflect different organizational goals or priorities. This empowers ordinary residents to focus on whatever metrics they care about most. Just as important as the quality and variety of data is providing information in a way that is easy to access and understand.

Just as an investigator knows the value of a financial statement, the public administrator knows the importance of a performance metric. After all, it is often the mundane and obscure details that reveal the true story behind what’s happening. So if you really want to know what’s going on in government, be sure to follow the performance metrics!

Author: Nathan Favero is an assistant professor in the School of Public Affairs at American University. His research focuses on topic related to public management, education policy, social equity, and research methods.

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