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Volume II: Guide for Performance Measure Identification and Target Setting · As the practical expression of policy objectives that reflect customer expectations and realistic funding levels; · As a framework for evaluating options in planning, prioritizing projects in programming, guid- ing tradeoff analyses in resource allocation, and influencing priorities in delivery of projects and services; · As a method to provide feedback on the effectiveness of expenditures to decision-makers involved in policy formulation and target setting; and · As the basis for monitoring to obtain indications of system performance over time. 2.4 Characteristics of Performance Measures to Support Asset Management The following guidelines can be used as a checklist by agencies wishing to assess and improve their use of performance measurement in support of asset management best practices. These guidelines are organized according to key principles of asset management from the Guide. Principle: There are clear links between policy goals and objectives and decisions at all levels. 1. Performance measures should be selected to cover established goals and objectives. 2. Performance measures should be consistent with the criteria used to make resource allocation decisions. Principle: Connections are made between proposed investments and expected results. 3. Predictive models or methods for relating investment levels to future performance should be available for each performance measure selected. 4. Performance measures should have appropriate sensitivity to show impacts of decisions about resource allocation across program areas, geographic areas, and subnetworks. Principle: Project selections are linked to an understanding of program-level impacts. 5. Performance measures used for initial resource allocation and program development should also be used to assist in determining program adjustments. Principle: Project selection and program resource allocation options and tradeoffs are analyzed based on their technical merits. 6. Performance measures used to guide project selection and resource allocation at the program level should include cost-effectiveness and benefit/cost measures, which (where feasible and appropriate) incorporate user costs or benefits. 5
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Volume II: Guide for Performance Measure Identification and Target Setting Principle: A long-term view of asset performance is held. 7. Performance measures used to evaluate investment tradeoffs should reflect life-cycle benefits and costs, not just immediate impacts. 8. Performance monitoring needs to include tracking of asset condition over time at a sufficient level of detail and rigor to support development of performance curves. This is needed to pro- vide the basis for credible prediction tools that analyze investments versus performance. Principle: Decisions are supported by good information. 9. Performance measures should describe not only physical asset condition but also how assets are serving their intended functions with respect to comfort, convenience, safety, and service. 10. Monitoring of outcome- and output-oriented performance measures needs to be accompanied by tracking of actual activity costs in order to provide the basis for credible prediction tools that analyze investments versus performance. 11. Performance measures should be selected with consideration of the cost of data collection and available methods for maximizing efficiencies. 12. Performance measures are needed that can serve as the basis for target setting with respect to what various programs will accomplish. Because actual monitored performance may depend on factors other than agency actions, the target setting and monitoring processes must account for the fact that many performance measures reflect not only results of actions taken by an agency, but external factors as well (e.g., traffic volumes and environmental conditions). Principle: There is a feedback loop from observed performance into planning and programming decisions. 13. Performance measures should be useful for signaling when changes to strategies and priori- ties are warranted--in long-range plan updates and in development of capital, maintenance, and operations program budgets. Principle: Decisions at different levels of the organization are made based on consistent criteria and data. 14. Performance measures reflecting asset condition and performance should be used consistently across different functional units and at different levels of the organization. This implies that performance measures should be amenable to "roll-up" and "drill-down" capabilities to allow them to be viewed at systemwide, district, corridor, subarea, subnetwork, or location-specific levels. This roll-up capability may include the need to calculate summary statistics (e.g., "per- cent poor lane-miles") from more detailed, location-specific condition measurements. Principle: Clear accountability is provided. 15. To the maximum extent possible, performance measures should be understandable and mean- ingful to political leaders and the general public. 6