Using Performance Measurement for Process Improvement

Performance measurement can be used to assess how well the agency or program is performing, or to set priorities for resource allocation, or to publicize that your program is indeed delivering something of value to the public (especially important in times of program review and budget cut-backs.)

But performance measurement for process improvement purposes is often an over-looked but important aspect. In fact, driving process and program improvement should be the key purpose of performance measurement. PRS has done a number of performance improvement projects where performance measurement played a key role.

With that in mind, here's a mini case study illustrating how and when and where to use performance measurement for process improvement purposes.

The Setup

A government agency we worked with had responsibility for administering a moderately complex tax credit program. The complexity arose from the somewhat arcane set of rules and guidelines for qualifying for the tax credit. The learning curve was steep for new personnel; at the same time, the 'old hands', once they mastered the rules, occasionally found the work less than satisfying.

At the time we were engaged, agency personnel (or rather their clients) were suffering from an 18-month backlog in processing tax credit applications. Client satisfaction with the process was low. However, we quickly realized there was a more important metric for process improvement purposes; that was, the number of files processed per day for each program officer. At the time, throughput stood at an average of 2 files per week per officer.

Throughput was a better metric to measure improvement because feedback would be immediate. We would be able to tell quite quickly whether or not our proposed changes would actually result in improvement. Throughput might also be considered a 'leading indicator'; that is, improving throughput might reasonably be expected to have a positive impact on the backlog and on customer satisfaction.

The Methodology

We followed a structured approach to develop a new process model. In general, any new model must:

  • Address one or more of the current process deficiencies;

  • Yield tangible, measurable benefit ; and

  • Have no negative impact on customer service or customer workload;

The methodology adapted for this process is as follows:

Examine process linkages for opportunities to increase coordination or integration – may include resequencing of tasks, shifting the responsibility for work and consolidation of interfaces and information/work flow. Opportunities may be identified by the fact that interfaces often result in queues; that is, work waiting to be done.

Redefine Alternatives – a process may encompass many ‘special cases’; there may be opportunity to segregate special cases in a separate process, resulting in two or more simpler processes replacing a complex one.

Relocate or Retime Controls – look for opportunities to integrate checks and controls into the ‘value-added’ tasks of the process i.e. find opportunities to replace error detection with error avoidance.

The Outcome

Rather than a simple 'first-in / first-out' process, we redesigned the process flow to create two 'streams' of applications. This triage decision was performed by an experienced officer. The cases that clearly qualified were streamed one way, while the more complex cases followed a different path.

New officers could learn in the 'simple' stream, aided and supported by the triage officer. The more complex cases went to the more experienced officers. They could also help out with the easier cases as workload allowed.

As a result, throughput went from 2 files per week per officer to 4 files per day, with no loss of quality or increased burden on the clients. A training path was created to more easily bring new officers up to speed. And the experienced officers got to apply their knowledge to more challenging cases that kept them more interested in the job.

Note that this simple process change resulted in a throughput increase of about 1000%; the backlog quickly declined. This indicates we chose an appropriate approach to performance measurement for process improvement in this case.

The Lesson

Different performance measures will be appropriate for different purposes. For example, performance measurement for process improvement purposes probably wouldn't help with resource allocation i.e. budgeting. This means before you decide on measures, you need to understand the purpose of the measure.

See Also:

Free Performance Measurement Guide

Best Practices in Performance Measurement

Why performance measurement fails

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