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Performance management is the systematic process by which an agency involves its employ- ees, as individuals and members of a group, in improving organizational effectiveness in order to accomplish agency goals based on performance data analysis. Over the last two decades, state DOTs have become more adept at using performance management to help meet important orga- nizational goals like keeping bridges safer, reducing highway deaths, and taming congestion. This report offers insights from leading state DOT practitioners on how to get the most from per- formance management. 1.0 Benefits of Performance Management Proponents of performance management say it helps their agencies make difficult decisions about setting long-term policy priorities (âdoing the right thingsâ) as well as where and how to apply day-to-day staff and capital resources, (âdoing the right things wellâ) and it helps them become more accountable to external stakeholders. The following are benefits of performance management: â¢ Performance management helps agency leaders set a strategic agenda and motivate staff. Good leaders keep their organizations focused on the highest business priorities. Nuanced and objective performance data help them understand challenges and set appropriate policy pri- orities. At a transportation agency, for example, analysis of data can reveal where performance is inadequate in key focus areas like pavement condition, fatalities, congestion, project deliv- ery, or maintenance, and this information can be used to set a strategic agenda. Armed with a performance-driven strategic direction, leaders can confidently energize staff and focus resources around key policy prioritiesâsuch as reducing fatalities or alleviating congestionâ to maximum effect. â¢ Performance management helps agency managers improve business processes. Strong performance emerges when day-to-day business processes are aligned with well-thought-out agencywide strategic priorities. In large public bureaucracies, business practices that have neu- tral or even adverse impacts on performance can easily become routine. Careful scrutiny of lag- ging and leading performance indicators reveal new insights on how to perform tasks and help agency managers make better day-to-day decisions about how to direct staff and resources to achieve outcomes that are more closely aligned with the agencyâs overall strategic agenda for achieving improved performance. At a transportation agency, for example, annual pavement survey data in combination with predictions about future performance can be used to assess the validity of alternate approaches to managing asset conditions such as the use of thinner overlays or new materials formulations. In Kansas, greater scrutiny of maintenance quality data has revealed new ways to address maintenance in a more cost-effective manner. 9 C H A P T E R 1 Introduction
â¢ Performance management helps improve accountability to external stakeholders. Account- ability is a fact of life for public agencies. Transportation agencies that ignore the expectations of elected officials, advocacy organizations, or the public run the risk of stimulating adversar- ial relationships that drive up the risk of negative policy mandates and reductions in funding. But agencies that are able to provide stakeholders with timely and compelling performance- based information about important issues can increase credibility and ensure a positive envi- ronment for setting policy and funding direction. Performance management provides data and analysis that helps improve the transparency of decision-making. In this report, transportation practitioners share their insights on how to implement a per- formance management program that can achieve these kinds of benefits. 1.1 Purpose of the Guidebook Several recent NCHRP-sponsored research reports provide guidance to transportation agen- cies on either starting performance measurement programs or important functional topics, such as performance measurement practices for asset preservation, congestion relief, safety, and context- sensitive solutions as well as others. These reports offer many valuable insights on challenges such as selecting appropriate measures, organizing for performance, and setting performance targets. But transportation agencies that have mastered the basics of choosing performance measures and organizing themselves to monitor results sometimes struggle to translate performance data into meaningful actions that enable business process improvements. This Guidebook builds on the existing body of knowledge to provide a source for sensible tips and ideasâgathered from leading state DOTs in the field of performance managementâon how to transform a basic performance measurement initiative into an effective performance manage- ment system that helps improve organizational effectiveness in accomplishing agency goals. Readers of the Guidebook are likely to work for transportation agencies that already use basic performance measures to analyze the condition of their transportation network but are seeking to learn more about how their peers use performance information to manage business process improvement and enhance accountability. Those seeking general guidance on how to start a basic agencywide performance measurement initiative are encouraged to first consult the listing of publications described in Exhibit 1.1. 10 Transportation Performance Management: Insight from Practitioners Strategic Performance Measures for State DOTsâA Handbook for CEOs and Executives, American transportation.org/Quality-CEOHandbook.pdf. Association of State Highway and Transportation Officials, Washington, D.C., 2003. http://downloads. Effective Organization for Performance Measurement , Transportation Research Board of the NCHRP%208-36%2847%29%20Final%20Report.doc. National Academies, Washington, D.C., 2006. http://www.transportation.org/sites/planning/docs/ NCHRP Report 446: A Guidebook for Performance-Based Transportation Planning , Transportation Research Board of the National Academies, Washington, D.C., 2000. Managing for Results: Enhancing Agency Use of Performance Information for Management Decisions ; Government Accountability Office, Washington, D.C., 2005. http ://www.gao.gov/new.items/d05927.pdf. NCHRP Synthesis 326: Strategic Planning and Decision-Making in State Departm ents of Transportation, Transportation Research Board of the National Academies, Washington, D.C., 2004. http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_sy n_326.pdf. Poister, T., D. Margolis, and D. Zimmerman, Strategic Management at the Pennsylvania Department of Transportation: A Results-Driven Approach, Transportation Research Record 1885, Transportation Research Board of the National Academies, Washington, D.C., 2004. http://trb.metapress.com/content/k0v0nn40x7x3l371/. Exhibit 1.1. Selected resources on DOT performance management practices.
1.2 Guidebook Development The information presented in this Guidebook was gathered via the following three-step process, including a basic review of the literature on performance measures, detailed interviews with six case study transportation agencies, and in-person practitioner reviews of the draft final Guidebook with four agencies: â¢ Performance management literature review. Considerable research has been produced on how to choose transportation-related performance measures. This section summarizes a small number of studies that focused on using performance measures in transportation decision- making. The literature review completed for this project covered the following general areas: â A limited review of Federal government agency-level performance measurement-related research reports, focused particularly on work by the U.S. DOT and its modal administrations; â A full review of state transportation agency-level performance measurement-related research undertaken by the National Cooperative Highway Research Program, the Transit Cooper- ative Research Program, university transportation centers, as well as research by individual state departments of transportation; â A limited review of performance measurement-related research work performed by state and local nontransportation agencies, private-sector organizations, transit agencies, metropolitan planning organizations, local governments, and nonprofit agencies; and â A limited review of performance measurement research work performed by non-U.S. transportation organizations. â¢ Performance management case studies. The six case studies used to develop this Guidebook were selected from a list of over 30 organizations known to be using a mix of established and emerging performance management practices. The list included details about a large number of state DOTs, several transit agencies and metropolitan planning organizations, local govern- ments, and some non-transportation organizations for which information was readily avail- able. Final case study candidates were selected from the listing based on input from the projectâs panel members and according to the following criteria: â Focus on states with an emphasis on accountability-driven performance management, which is generally considered to be more sophisticated than basic performance tracking efforts; â Highlight unique practices and applications of performance management that are consid- ered the state-of-the-art in performance management; â Examine state DOTs that have not been highlighted by previous research efforts because they provide new perspectives on performance management; and â Include non-DOT organizations in order to provide an outside perspective on how agencies can use performance management to improve their practices. â¢ The six case studies are shown in Table 1.1. Each case study included initial background research, personal interviews with selected staff, and preparation of a final write-up. Complete write-ups for the case studies are available as part of the final report for this project. Background research was used to develop an interview guide tailored to each state that focused on a limited number of areas where the case study agency offered the greatest poten- tial for lessons learned. Interviews were conducted by telephone or in person with selected agency managers. Several individuals were contacted for each case study to ensure multiple perspectives were considered. Questions focused on types of decisions made by the agency; types of measures crucial for decision-making; links between measures and decisions; challenges and barriers in using measures in decision-making; and successful uses of measures in decision- making. Interviewees were given an opportunity to review and comment on the write-ups. â¢ Performance management guidebook practitioner review. A draft version of the Guidebook was reviewed in four practitioner review sessions at state DOTs that were not directly involved in the research effort. Each review session involved several members at the DOT; sessions were structured as a two-way exercise that included a presentation from the research team on the Introduction 11
Guidebook and presentations by the DOT on the current state of their performance manage- ment efforts. Feedback from the practitioner review sessions was incorporated into the final Guidebook. Practitioner review sessions were conducted at the Georgia, Indiana, Kansas, and New Jersey DOTs. 1.3 Guidebook Structure The remainder of the Guidebook discusses ways to implement performance management in core business functions relevant to DOTs: â¢ Chapter 2 addresses the basic structure of a performance management system and how it fits within the overall management structure of a transportation agency; â¢ Chapters 3 through 6 provide insights from practitioners for linking performance measures to decision-making and provides examples from the case studies conducted for this research effort; and â¢ Chapter 7 offers some lessons learned and discusses challenges to implementation of perfor- mance management programs. 12 Transportation Performance Management: Insight from Practitioners Accountability Focus Advanced Practices New Experiences Non- DOT Florida DOT Yes Aligning goals and measures throughout organization Frequently cited No Missouri DOT Yes Pay for performance Infrequently cited No Ohio DOT Yes Linking organizational measures to personnel reviews; asset management Infrequently cited No PACE Suburban Bus Yes Performance-based route selection Not cited Yes Virginia DOT Yes Dashboard; project tracking; managing internal operations Frequently cited No Washington DOT Yes Reporting; project tracking; maintenance; congestion evaluation Frequently cited No Table 1.1. In-depth case studies.