Budgets and Performance Measurement in the Public Sector

If you're working in the Government of Canada, it's seems an appropriate time to talk about budgets and performance measurement. Specifically, how do we use performance measurement to document our results and defend our investments in activities and programs?

Good performance indicators provide useful information which will assist external users to assess: 1 – the effectiveness in achieving the desired outcomes of the department or agency; and, 2 - the efficiency with which the organisation has employed its resources to in conducting activities and producing outputs.

The savvy manager can use performance measurement to 'make the case' for a particular program, based on three criteria:

  1. We did what we said we would do (e.g. we carried out the plan)

  2. We did it in an efficient manner

  3. We had the impact we expected

So what do 'good' indicators look like? Here's a few clues. First, they have to be clearly relevant to the main business of the organisation. For example, if you are a regulatory agency, you better have some measures that reflect compliance or enforcement within your area of concern.

Second, they need to be appropriate to the task of assessing the degree of success of the organization in meeting its obligations. This might include such factors as:

  • The extent to which the agency has achieved a predetermined outcome or target;

  • The trend in this performance over time;

  • Organizational performance as compared to the performance of similar agencies; and/or

  • Organizational performance relative to predetermined benchmarks.

Thus, the link between budgets and performance measurement can be used to the advantage of the manager. If the manager can prove she did what she set out to do, in the most efficient way possible, and that these actions yielded the intended impacts, benefits and consequences, that manager can defend the investments - i.e. her budget - made to achieve those results.

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