Local Government Outcome Based Performance Measures and Customer Service Standards: Has Their Time Come?

TL;DR: In the private sector, Lammert and Ehrsam as mentioned in this paper show that when management measurements of performance are restructured to focus on throughput, utilization of plant capacity, customer delivery, inventory levels and total product costs, a significant turnaround occurs.

Abstract: Outcome-based performance measures are an increasingly critical management tool. Speaking of the private sector experience, Lammert and Ehrsam note: "(When management measurements of performance are restructured to focus on through-put, utilization of plant capacity, customer delivery, inventory levels and total product costs, a significant turnaround occurs. Total plant costs decrease and customer satisfaction improves." Performance measures gauge an organization's activities. They fall into four broad categories: Inputs, Outputs, Outcomes and Efficiency Outcome-based measures focus on the last two categories. The outcome-based performance measures emphasized by the private sector are: On-time Delivery, Production Cycle Time, Defect Levels and Customer Satisfaction. The importance of such measures, as a marketing and competitive position device, can be seen in local banks. Most now post the time it takes to receive approval on a loan application. Moreover, the author frequents a branch that has a clock above the tellers with a sign, "Five Minutes or $5." If you have to stand in line more than five minutes, you get $5. (The longest I have had to wait is four minutes.) The private sector is not alone in aggressively emphasizing performance measures. Both the Chief Financial Officers (CFO) Act of 1990 and the Government Performance and Results Act (GPRA) of 1993 deal with performance measures. The 1990 act requires that CFOs provide systematic performance measures and report the results in financial reports. GPRA requires all federal agencies to develop outcome oriented performance measures, monitor results and publicly post key performance measures. In addition, Executive Order 12862 "Setting Customer Service Standards," issued September 11, 1993, requires Service Standards, issuederal agencies to be customer driven with "best in the federal agencies to be customer driven with "be standards. Customer service standards are customer service stant outcome measures. Customer service order to establish these standards, federal agencies customer-relevant outcome measures. In a identify to establish these standards, federal agencies must: ident survey their customers to ascertain the kind and quality of survey customers to ascertain the kind and the level of satisfaction with existing services desired and the level of satisfaction with post the agency's service standards; * measure performance against the agency's service standards; and measure performance against the results of the standards; and report the results of the outcome-based performance measures Examples of the outcome based per development in various federal agencies currently under development in various federal agencies Social Security Administration-When you make an appointment with us, we'll serve you within 10 minutes of the scheduled time. Department of Agriculture Food Stamp Program -We promise to let you know if you're eligible for food stamps as soon as possible, but no later than 30 days after you file your application. U.S. Postal Service-Your first class mail will be delivered anywhere in the United States within three days. Your local first class mail will be delivered overnight. The Department of the Interior's Information Access Centers' customer service standards are: You will be greeted and your request will be acknowledged within five minutes of your arrival. You will receive the most current and accurate information about the public land that we have available to the public. You will receive available information within 30 minutes of your in-person request. We will respond to your telephone or written inquiries within five business days. The development of performance measures has been instructive and, in some cases, embarrassing. For instance, the U.S. Postal Service found that 82 percent of the time, on-time delivery standards are met. However, in a number of cities, the on-time delivery rate is 60 percent or less. …