Developing Performance Measures that Drive Organizational Goals

Catherine Givens, Director of Budget and Strategy, and Ronald Gomez, Financial Business Analyst, at City of Coral Springs, Florida hosted an engaging discussion for the ClearPoint community on how to develop performance measures that drive organizational goals. If you don’t have time to watch the talk, keep on reading for a recap!

Catherine kicked off the discussion with some background on Coral Springs, and how they’ve achieved developing performance measures to drive their organizational goals. Her first recommendation is to start with leadership – if they want to be a high-performing organization, then it will be easy for you to start developing these measures. Coral Spring’s business model also highly prioritizes citizen/stakeholder input when developing measures. You need to know what they value to know what you should be measuring and tracking, after all.

Define Organizational Goals

Ronald then posed the question: How exactly do we develop performance measures that drive organizational goals? Before you start thinking about performance measures, first you need to start by clearly defining where the organization must go. This might take the form, as it does in Coral Springs, of a five-year strategic plan with a mission, vision, values, and strategic goals all informed by customer needs and wants. Next, you must link and align these components of the plan within itself. Thus, every component of the plan must align with each other and with customer needs. This plan should be reviewed and updated to ensure all facets of the organization are pushing in the same direction. One way to make this the case is for every department to have an action plan.

Coral Spring’s strategic plan as implemented in ClearPoint

Develop Performance Measures

Once you have this framework in place, you can start to develop performance measures. Ronald talked about asking yourself “what, how, when, and why” of each intended measure. First up – “what” do you want your measure to do? In this case, it needs to directly track and support the successful achievement of strategic goals. “How” can a measure do this? Coral Springs categorizes their performance measures into one of the following perspectives: impact, demand, efficiency, effectiveness. Use these perspectives to guide the development of your performance measures.

“When” or how often should you report on the performance measures? Give each performance measure a reporting frequency, which determines how often you will gather data and report on its progress. Each performance measure is different, but keep in mind that the reporting frequency must allow for detailed trend analysis and reporting. Finally, “why” should you develop performance measures? To help monitor and achieve the strategic goals, of course. Otherwise, how will you know if your organization is making progress on its goals?

Set Targets

After answering these questions about performance measures, you should start to set targets. In order to do this, Ronald recommends using historical trends and staff knowledge to set the first round of targets. After that, use aggressive “stretch” targets to ensure continuous improvement. Targets should continue to become more challenging to hit over time, which will help your organization settle into a mindset of continuous improvement through the use of data. Supervisors should set fair yet aggressive performance measures for each employee that directly support the organization’s strategic goals. This can become integrated into the employee’s annual performance review, to ensure each employee is delivering on their part of achieving the strategic goals.

Establish Requirements

Next, you should establish data tracking and reporting requirements. Coral Springs requires departments to report and gather data using the most “frequent” reporting frequency available in order to identify and address any issues that may arise. Some reporting frequencies you might use include annual, biennial, quarterly, or monthly. Ronald notes that one size does not fit all – some measures need to be reported on more frequently than others as they require more details than others. Make these decisions on a case-by-case basis.

When it comes to readjusting direction, the more often you have scheduled times to discuss results, the more able you will be to make adjustments to your performance measures. These measures should be dynamic, not just in terms of the target but in every aspect. If a performance measure isn’t quite working or capturing progress on the strategic goal, don’t be afraid to adjust it! Coral Springs reviews performance management reports internally on a minimum on a monthly and quarterly basis. If a department does not meet the target for a performance measure, it is required to provide a write-up explaining why not on a quarterly basis. However, departments also have an opportunity to adjust direction during the budget process, at which time, together with the Budget & Strategy Department, they take time to review history to forecast and adjust direction accordingly.

Coral Springs’ performance measures report in ClearPoint, linked and aligned with strategic goals

To conclude, Ronald gave his best pieces of practical advice to those looking to develop performance measures: Prioritize transparency and alignment; link your mission all the way down through your strategy; and create a team environment to incentivize everyone to hit the targets of your performance measures and thus achieve your strategic goals.

Coral Springs Glossary of Terms

Policy: Policy is set by the City Commission and it identifies vital issues that must be addressed. Policy must align with the organization’s long-term Strategic Goals, which must also align with the Mission and Vision of the organization.

‍Operations: Allocate activities, resources, personnel, investments and time planned for the year to achieve the City’s Mission and Vision.

‍Link: All components on the Strategic Plan must support each other. For example, all initiative and/or KPIs must be aligned and linked to a Strategic Goal.

‍Align: Each initiative and KPI must support achieving the Strategic Goal it is linked to. For example, an initiative designed to “update the City’s Financial Policy to ensure staff members are fiscally responsible” might be better suited to be aligned with the “Responsible City Government” Strategic Goal vs. another strategic goal such as “Downtown becoming Vibrant”.

‍Business Plan: The Business Plan is an outgrowth of the Strategic Goals, capturing the City’s vision in a quantifiable form, improving decision-making and resource allocation.

‍Performance Indicators: The City of Coral Springs separated performance indicators into two groups:

1. Key Intended Outcomes: Quantifiable key performance indicators used to evaluate customer satisfaction and performance levels in key areas of high importance for the City. These performance indicators track performance at a high-level.
2. Departmental Performance Indicators: Quantifiable key performance indicators used to evaluate the operational performance of a department. These performance indicators have a direct impact on the performance of Key Intended Outcomes.