Policy and Performance Orientation Seminars

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• Policy and Performance Orientation Seminars
• April 2008

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Objectives of Seminar

• Look at role of policy and performance in
  programme budgeting system
• Part 1 Overview of policy development in
  context of PRSP and Budget process (integrated
  management cycle)
• Part 2 Overview of non-financial performanceand
  key aspects of performance specification and
  reporting

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PART 1 OVERVIEW OF POLICY DEVELOPMENT
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The integrated (annual) management cycle
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A Well-Integrated Policy System
Broad Political Goals and Priorities Articulated
through MTEF, PRSP, Government Activities
Program, etc Are translated into
Ministry Plans, Budgets, Performance Targets and
Measures Which are used to establish
Various Policy Products and Services The results
of which may be used to modify future broad
political goals and priorities and future
implementation of Ministry plans, budgets,
performance targets measures
A Ministry Policy Agenda Which is used to set
priorities and timelines for preparations of
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Concurrent GoA Performance Planning Activities
Poverty Reduction Strategy Paper
Government Activities Plan
Medium Term Expenditure Framework

• Describes broad policy intentions of the GoA,
  often expressed as legislative agenda
• Is prepared based on submissions from Ministries
  reflecting annual operational plan
• Does not currently focus on performance quality
  of Ministries
• Execution reports from Ministries are intended
  to describe accomplishments based on GAP
• Relatively little citizen and stakeholder
  engagement

• Establishes broad and comprehensive poverty
  reduction actions
• Ministries to reflect PRSP actions in their
  activities plans
• Actions are mix of macro and micro.
• Monitoring and reporting process being developed
  by MFE
• Link between desired societal outcomes and GoA
  service performance remains undeveloped
• High degree of citizen and stakeholder engagement

• Used to establish programme budget allocations
  
• Intention is review spending proposals against
  past financial and operational performance
• MTEF process needs to be strengthened in regard
  to description of performance goals, indicators
  and targets for programmes
• Outcome should be more transparent budget
  performance to citizens and stakeholders

• Three key issues are
• Strengthening linkages between these processes
  to avoid duplication, overlap or gaps.
• Harmonizing processes to establish proper
  sequencing and clarify objectives of each
  process/product.
• Examining roles and responsibilities at Ministry
  level for preparation and coordination.

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Steps in Policy Development Implementation
Cycle
Policy Needs and Pressures (may arise from
external or internal sources)
Issues Identification (should focus on core
questions and context/background)
Implementation and Monitoring (which may include
more formal evaluation)
Policy development and implementation is a
cyclical activity
Analysis (may include consultation)
Political Decision-making and Direction (some
direction will require further analysis or
programme design before approval of
implementation)
Identification of Options and Implications (may
involve more than 1 level of options)
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Group Task 1 Examples of Current Policy

• Identify a policy issue your SBA is currently
  involved in.
• Pick a specific issue not a broad one.
• Promote economic development (no -- too broad!!)
  
• Development of an SME loan guarantee programme
  (yes very clear and specific)
• Use an example of something new a possible
  future action or activity.
• Is the primary pressure or need external or
  internal?
• Identify if the policy activity is identified in
  GAP and/or PRSP.

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Policy Leads To One or More of the Following

• A position of a Minister or government on any
  issue.
• New or amended legislation, decrees or
  regulations (not necessarily administered by the
  Ministry).
• New programs or services delivered by the
  Ministry or by third parties (may not need ii).
• Guidelines, practices that interpret ii or iii
  for implementation purposes.
• Directives or advice to an individual or class of
  third party organizations in regard to
  performance of a statutory or delegated function.
  
• Analysis that may be provided in written or
  verbal form to a Minister, other senior official
  or external body such as a national assembly
  commission.

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Group Task 2 Examples of Current Policy

• From your groups policy examples in Task 1,
  pick one example.
• Identify the list on slide 9 two examples of what
  the policy might lead to.
• Name one additional government body that would
  need to be involved in the development of the
  policy.
• Name one non-government organisation that would
  be affected by implementation of the policy when
  final.

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Steps in Policy Development Implementation
Cycle
Policy Needs and Pressures (may arise from
external or internal sources)
Issues Identification (should focus on core
questions and context/background)
Implementation and Monitoring (which may include
more formal evaluation)
Policy development and implementation is a
cyclical activity
Analysis (may include consultation)
Political Decision-making and Direction (some
direction will require further analysis or
programme design before approval of
implementation)
Identification of Options and Implications (may
involve more than 1 level of options)
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Policy Analysis Activities

• Several activities (and skills) form the basic
  techniques involved in policy analysis
• Determining information needs and sources
• Identifying possible approaches and tools for
  sorting or comparing approaches
• Assessing fiscal or financial implications
• Identifying the internal and external key
  stakeholders (looking from the outside in)
• Obtaining stakeholder views gathered through
  various forms of consultation
• Identifying how other jurisdictions have
  approached (or intend to approach) the same
  problem

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Characteristics of Policy That Affect
Implementation

• Easy Policies Likely Have These Characteristics
• Simple technical features
• Would result in a marginal change from the status
  quo
• Have a single-actor as the target
• Have a single policy goal and few objectives
• Have clearly stated policy goals
• Implementation that would occur over a short
  period of time

• Difficult Policies Likely Have These
  Characteristics
• Complex technical features
• Would involve a comprehensive change from status
  quo
• Have multi-actor targets
• Have multiple goals and objectives
• Have ambiguous or unclearly stated goals and
  objectives
• Would involve implementation over a long period
  of time.

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Group Task 3 Easy and Difficult Policies

• Using one of the policy examples from Task 1
• Identify its easy/difficult characteristics using
  the scale provided.

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Analyzing Cost and Benefits

• Ideally, cost analysis will clarify whether the
  benefits of a policy option will exceed the
  costs.
• Not all policy proposals necessarily involve a
  cost to government -- some may involve potential
  costs for third parties (e.g. private sector
  employers, individuals, etc.)
• Some policy options are easier to assess costs or
  potential benefits than others Example Where
  benefits are diffused across a population and are
  difficult to place a value on (e.g. installation
  of ramps and disabled-friendly doors in public
  and commercial venues)
• Data on costs and benefits can be very useful in
  comparing policy options although the
  preferred option may not necessarily be the one
  with the lowest cost or even the highest
  benefit.
• Other non-economic factors may influence a final
  policy recommendation or options.

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Consultation -- An Important Feature of Policy
Development

• Presence of Consultation Can
• Improve the quality of analysis.
• Expose ideas, options, approaches or alternatives
  that might otherwise be overlooked.
• Identify problems and barriers to implementation
  that might otherwise be missed.
• Broaden support and build a sense of ownership by
  stakeholders and investment in the success of the
  policy.
• Provide time for reflection and second thoughts.

• Absence of Consultation Can
• Reduce scope for conflict among stakeholders.
• Signal political seriousness and willingness to
  make hard decisions and provide leadership.
• Save time and avoid delays in approval and/or
  implementation.
• Reduce burden/cost on government and on some
  stakeholders.
• Avoid consultation fatigue among stakeholders

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Steps in Policy Development Implementation
Cycle
Policy Needs and Pressures (may arise from
external or internal sources)
Issues Identification (should focus on core
questions and context/background)
Implementation and Monitoring (which may include
more formal evaluation)
Policy development and implementation is a
cyclical activity
Analysis (may include consultation)
Political Decision-making and Direction (some
policy decisions will require further analysis or
programme design before approval of
implementation)
Summarizing Options and Implications (may involve
more than one level of options)
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Policy Options and Policy Implications

• Options describe the key choices associated
  with a policy decision based on policy analysis.
• For example Options for introduction of
  programme budgeting in government are
• Option1 Evolutionary approach, progressively
  including SBAs over a 6 year period with periodic
  changes in budget instruction, templates, etc.
• Option 2 Revolutionary approach, implementing
  in all SBAs in a 2-3 year period.

• Implications reveal the potential effects or
  consequences associated with each policy option.
• It involves synthesizing and presenting a
  combination of factual information and opinion
  (sometimes uninformed opinion).
• The most common approach to summarizing policy
  implications uses pros and cons or
  advantages and disadvantages

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Appraising policy options

• Suitability - Will the option address the key
  issues and will it be able to deliver desired
  outcomes?
• Rationale - is there a clear case for government
  action?
• Proportionality - is the (cost of the) policy
  option proportionate to the (cost of the)
  problem?
• Effectiveness - how well will the option address
  the issue or problem?
• Impact - are there any unintended consequences?
  Are costs and benefits equitably distributed?
• Feasibility - Is the option a realistic and
  practical possibility?
• Capability - will it be possible to implement and
  manage the option?
• Accountability - can clear accountabilities be
  established and aligned with incentives?
• Affordability - is there the money, and is it
  value for money against alternatives?
• Risk - can risks be identified and either
  mitigated or allocated and managed?
• Control - are there clear success measures and
  mechanisms for prompt feedback and learning?
• Acceptability - Is the option supported by those
  with the authority and influence to legitimise
  action?
• Participation - has there been sufficient public
  participation and consultation in policy design?
• Buy-in - is there sufficient support from both
  internal and external stakeholders?

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Group Task 4 Options and Implications

• Choose one of policy examples from Task 1
• Identify at least two (maximum three) options
  that could be presented in relation to that
  policy.
• Pick one option and list two pros and to cons
  associated with that option.

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PART 2 OVERVIEW OF PERFORMANCE SPECIFICATION
AND REPORTING
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This Section Will Cover

• Some common performance terms used in programme
  budgeting and internationally in regard to public
  sector performance.
• Simple steps involved in managing performance.
• Kinds of performance indicators or measures.
• A group exercise to assist in understanding the
  relationship among the kinds of performance
  indicators.
• Challenges faced by most governments in measuring
  performance.
• A group exercise to demonstrate that everyone has
  some inherent skill in measuring performance.

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Performance Involves Three Steps
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Performance Concepts
Objectives or outcomes What the government
wants to implement for the public
Outputs Services provided or bought for the
external beneficiaries by the SBA
Activities - the processes that are implemented
during delivering the outputs (and for delivery
of outputs )
Inputs the resources, which are used for the
provision of outputs
Costs the resources, which are used for input
financing
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Programme Budgeting Is Concerned With Three
Aspects of Performance
e.g improving the average level of educational
achievement, improving the health status of the
population
e.g provision of general education in schools,
provision of primary health care
e.g teachers or doctors/nurse salaries, school
books or medical drugs, school or health
buildings
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Use of Indicators to Measure Performance

• Input Indicators
• Resources going into a service, programme or
  activity.
• Usually expressed as a quantity of people, money
  or time allocated.
• Do not indicate effectiveness or efficiency.
• Output Indicators
• Measures of the services delivered (eg indicate
  efficiency).
• Consist of several types
• Quantity - Usually expressed as service volume
  (e.g. of patients served monthly in each
  hospital, rate of applications handled per day)
• Quality relate to standards of delivery or
  client evaluation (eg of clients rating service
  satisfactory)
• Timeliness eg service delivery to deadline.
  Note that timeliness can also be a measure of
  quality (eg average waiting time for surgical
  procedure)
• Cost usually budget , but can be other cost
  indicators (eg cost per application processed)
• Outcome Indicators
• Changes in the environment/community directly or
  indirectly attributed to programmes (eg labour
  market absorption following implementation of
  training schemes).
• Some indicators are population level (e.g.
  reduction in infant mortality rates).
• Some assess impacts of services (e.g. successful
  job placement rate of trainees or disease rate of
  infants vaccinated).

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Group Task 5 Test Your Performance Indicator
Quotient

• In groups, place the letter next to each
  performance indicator, which best describes the
  type of performance measure it is.
• Input Indicator
• Output Indicator
• Outcome Indicator (organisational or
  intermediate)
• Outcome Indicator (community or population)
• Some outcome indicators may relate to results
  achieved by an organization or service.
• Other outcomes may relate to effects at the level
  of the population as a whole.

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Test Your Performance Indicator Quotient

• ____Percentage of social benefits applications
  processed and disbursed to applicants within 30
  business days of application.
• ____Number of institutional or program audits
  completed each year.
• ____Percentage of NGOs involved in social care
  activities licensed and accredited by government.
  
• ____Percentage of working hours spent by social
  care workers in court proceedings.
• ____Percentage of child abuse cases resulting in
  successful prosecution.
• ____Number of reported sexual abuse victims per
  100,000 female population.
• ____Percentage of staff completing training in
  targeted municipalities.
• ____Percentage of children in temporary
  institutional care successfully returned to
  family care in calendar year.
• ____Cost of institutional care per client/day.
• ____Number of children in social care as a
  percentage of youth population (by age cohort).

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Some of the Challenges Measuring Performance

• Reliance on the use of output indicators alone,
  without development of outcome indicators.
• Over-reliance on rules, norms or standards as
  indicators of performance.
• Too many indicators or measuring too many things.
  
• Measuring performance from the users point of
  view -- this means shifting governments
  viewpoint from inside out to outside in
  taking the citizens view of services when
  selecting indicators and deciding how to report
  on them.
• Maintaining commitment to consistent and
  transparent performance reporting.

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Possible Performance Indicators Euro Pizza

• of customers who complete surveys with a
  satisfactory or above score.
• Reduce average service cost per customer by 5
• Increase average spend per customer by 10
• of customer orders served within 15 minutes of
  order placement.
• growth of repeat customers per week
• of customers who rate quality of food and
  value for money as very good or excellent
  in weekly surveys.
• Return on capital
• Profit margin ( of revenue over total operating
  costs)

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Dimensions of Performance

• What is different about the last two performance
  indicators on the previous slide, compared to the
  rest?
• Which indicators or performance would a customer
  of Euro Pizza be interested in?
• Which indicators of performance would the owners
  of Euro Pizza be interested in?
• Are these different types of performance
  indicators relevant for public services delivered
  by government agencies?

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Group Task 6 Everyone Has Experience in
Measuring Performance!

• Tasks
• Group 1 -- the car company group -- will
  develop examples of performance indicators useful
  in assessing performance of a car manufacturer
  from the point of view of consumers as well as
  current and potential investors.
• Group 2 -- the airline group will develop
  examples performance indicators for an airline
  useful from the point of view of travelers and
  government regulators.
• Timeframe 30 minutes in groups and 20 minutes
  for presentation/discussion

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Performance Management and Reporting Involves

• Tools and processes
• Performance planning format
• Reporting process and templates
• System for agreement targets to be set in
  relation to each indicator and,
• Reporting results against established targets
  during and following implementation.
• Reporting performance serves two purposes
• Internal accountability and performance
  management (enabling senior officials and
  executives to monitor programme efficiency and
  effectiveness)
• External accountability (enabling elected
  officials, key stakeholders and the public to
  monitor performance of government bodies).

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Ideal Attributes of Performance Indicators and
Targets

• Clear -- as simple as possible avoiding terms
  that the average person would not understand.
• Cost Effective -- data should be worth
  collecting with little incremental cost to the
  organization.
• Relevant -- measures should logically relate to
  the organization, programme or activities and
  help determine whether the programme or service
  objective/targets are being met.
• Consistent -- the same indicators should be used
  over time so that data can be compared from
  fiscal year to fiscal year.
• Practical -- performance data should be
  managerially useful and mutually accepted where
  an indicator is developed to assess
  accountability of a third party.
• Verifiable -- data for should be accurate,
  recorded and auditable.
• Honest -- data should be reported even it does
  not look good.
• Linked to Budget -- Should include at least some
  financial information wherever possible. Unit
  cost or measures of cost effectiveness can be a
  very important measure in arguing future budget
  allocations.

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Levels of Performance Measurement

• Performance measurement can occur at various
  levels
• Government-wide or population level which are
  usually concerned with policy outcomes.
• Ministry level where typically the
  target/measurement is an indicator that of how a
  Ministry is fulfilling its mandate or business
  plan.
• The organizational unit level within a Ministry
  where performance measurement focuses on more
  specific tasks and activities unique to each
  unit.
• The individual level usually in the form of
  performance agreements or contracts assessing the
  results of an individuals work and is most often
  used at the senior management level.
• The agency level where an independent agency
  may perform services devolved or delegated by a
  Ministry.

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Group Task 7 Government Performance
Specification

• Using one policy option from Task 4
• Identify 3 performance indicators that could be
  used to monitor how effectively the policy is
  being implemented.
• 2 performance indicators should deal with
  outputs
• 1 performance indicator should deal with
  outcomes.

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ANNEX 1 ADDITIONAL POLICY MATERIALS
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Steps in Policy Development Implementation
Cycle
Policy Needs and Pressures (may arise from
external or internal sources)
Issues Identification (should focus on core
questions and context/background)
Implementation and Monitoring (which may include
more formal evaluation)
Policy development and implementation is a
cyclical activity
Analysis (may include consultation)
Political Decision-making and Direction (some
direction will require further analysis or
programme design before approval of
implementation)
Identification of Options and Implications (may
involve more than 1 level of options)
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Policy Needs and Pressures

• External needs/pressures are outside the direct
  control of government and have many sources
  including, but not limited to the economy
  environment legal/constitutional events
  stakeholder or political advocacy international
  events, etc.
• Internal needs/pressures also have many possible
  sources, although are somewhat more directly
  controlled by government. Major examples are
  revenue and budget performance or effectiveness
  of current government policies or programmes
  results of planning and priority setting
  exercises electoral commitments etc.
• Understanding the drivers behind a policy need is
  important in order to determine the extent to
  which the options and alternatives being
  developed will address the needs and pressures
  facing the government.

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Issues Identification

• Issues identification is an early and crucial
  step in the policy process. It is essentially
  about focusing attention and effort on the right
  questions and laying out an approach to work.
• Four steps are typical
• Identifying the core questions the policy
  activity should seek to answer
• Identifying the audience of and participants in
  the policy work
• Determining the product or products needed (there
  may be several and sometimes a critical path and
  work plan are useful)
• Understanding and describing the context and
  background.

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Methodology considerations
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KEY ASPECTS OF THE PROCESS
THE POLICY ISSUE
THE POLICY CONTEXT
RESEARCH
REPORTING/ ADVICE
ANALYSIS
ASSESSMENT
THE POLICY IN EFEECT
THE POLICY OPTIONS
CONSULTATION
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What Do Costs Potentially Involve?

• State Budget/Public Funds and Private
• e.g. a new pension policies which may have a
  public expense (to the state government as
  employer) and private expense on all non-state
  employers.
• Direct and Indirect
• direct costs are clearly attributed to an
  activity (e.g. new staff) indirect costs are
  less clearly attributed (e.g. shared overhead or
  administrative expenditures).
• Explicit and Implicit
• explicit costs are expenditures associated with
  a new Ministry programme implicit costs appear
  if the Ministry forgoes use of funds for other
  alternative programmes.
• Initial and Recurring Expenses
• initial costs are expenditures (especially
  capital) associated with setting up (or
  start-up) of a new programme recurring costs
  are those which appear in future years as ongoing
  operational expenditures.
• Fixed and Variable
• fixed costs are expenditures that are constant
  (e.g. staff salaries for a hospital) variable
  costs are expenditures which fluctuate based on
  service levels (e.g. drugs, food).

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What Do Benefits Potentially Involve?

• Direct and Indirect
• direct benefits (e.g. lower unemployment
  benefit payments to trainees who have found
  jobs) indirect benefits (e.g. increases in
  tax revenue or GDP as a result of employment
  growth).
• One-time and Continuous
• one-time benefits occur at a specific point in
  time such (e.g. construction jobs associated with
  a new hospital) continuous benefits are on
  going (e.g. increase in available health services
  or of beds).
• Intended and Unintended
• intended benefits related to the targeted
  beneficiary (e.g. the unemployed in a training
  programme who are subsequently placed in
  full-time jobs an unintended benefit could be
  an increase in employment opportunities for
  special groups such as women, youth or the
  disabled if none of these groups were explicitly
  targeted by the programme.
• Tangible and Intangible/Financial and
  Non-financial
• tangible benefits are those which are
  quantifiable such as more tax revenue or less
  unemployment benefit payments non-tangible
  benefits are less easily measured such as
  improvements in the social environment in Armenia
  if more people are working.
• Positive and Negative
• a positive benefit such as improvements in
  pension benefits through an increase in social
  tax can be offset by a negative benefit (e.g.
  shadow economic activities if employers try to
  hide wages to offset higher tax payments).

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Difficulties and Constraints

• Not all benefits are easily quantifiable the
  goal during the policy analysis stage is to
  enable comparison of choices and shed light on
  effects.
• Incomplete or unreliable statistics can lead to
  policy decisions that are based on incorrect
  analysis, leading to implementation problems
  and/or unintended outcomes.
• Comprehensiveness of cost analysis varies based
  on the issue, type of policy product, time
  available, degree to which methodology is worth
  the investment in time and money.
• Capacity and tools -- Staff require training to
  properly use most economic and financial analysis
  tools. Some tools require in depth or independent
  research, increasing the time and costs involved.

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Framing Policy Options

• Options describe the key choices available to
  Ministers based on analysis and illustrate the
  distinctions and consequences of each choice.
• Sometimes more than one level or layer of options
  will be required (called nested options). For
  example, selection of Option A (e.g. increase
  the minimum wage by x), may require further
  choices among A1, A2 etc (e.g. whether to
  approve variations in wages or specific
  exemptions for youth, hospitality workers, etc,).
  
• In presenting policy options, many approaches are
  possible but the most common are
• Summarize each option and its associated
  implications, followed by a recommendation
• Present a recommendation and description of
  associated implications, followed by other
  options considered with associated implications
  for each
• Summarize options and implications only making
  no recommendation.
• There is no best approach and each requires the
  same accurate and clear presentation of facts and
  opinion.

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Summarizing Implications

• Options are about outlining political choices
  summarizing implications is about revealing the
  potential effects or consequences associated with
  each choice.
• Summarizing implications is challenging and
  extremely important it involves synthesizing
  and presenting a combination of factual
  information and opinion (sometimes uninformed
  opinion).
• Facts (e.g. costs, legal status, position of
  various stakeholders) are easy to present, but
  the trick is to select only those most relevant
  to the decision.
• Opinions are far more difficult to present
  because they can be highly subjective, if not
  speculative, and may involve presenting views not
  shared by the policy analyst.
• The two most common approaches to summarizing
  policy implications are
• Listing pros and cons or advantages and
  disadvantages
• Providing a narrative description that describes
  the above
• The former has some advantages over the latter
  information is easier to compare, which is useful
  when there are several options presented it is
  also better suited to presentation format which
  helps keep the number of words to a minimum.

48
Implementing Political Direction
1. A policy proposal is prepared by a Ministry,
which leads to . . .
3. That takes one (or more) of the following
forms . . .
A General Government Position on an Issue
Declaratory Legislation and Regulations/Decrees

Administrative Legislation and
Regulations/Decrees
2. A Government Policy Decision
A New Government Service or Programme
Changes to an Existing Government Service or
Programme
49
ANNEX 2 ADDITIONAL PERFORMANCE MATERIALS
50
Policy Delivery Involves Three Closely Related,
But Different, Elements

• Implementation of policy for example the
  introduction of a cancer screening service or a
  literacy programme
• Achievement of targets for example an objective
  for waiting lists or exam results
• Achievement of better outcomes for example
  lower mortality or better employability

51
Cost Indicators

• When costs are attributed to outputs then the
  cost (and potentially the comparative efficiency)
  of delivering the good or service is quite
  transparent. This can be true in terms of both
  total costs and unit costs.
• e.g. if the total cost of processing benefit
  applications is 400,000AMD and there are 20,000
  benefit applications being processed than the
  unit cost of each benefit application is 20AMD.
  However for this to be meaningful
• All of the costs of benefit processing must be
  attributed to the output.
• The non financial information (how many
  applications are being processed) must be
  available.
• The benefit applications being processed must be
  relatively homogeneous

52
Quantity Indicators

• Quantity is the fundamental measure of how much
  of the good or service is being purchased. In
  many cases this can be expressed as a simple
  arithmetic number. E.g.
• 25,000 benefit applications will be processed
  over the year ended 31 December 2005.
• At other situations (e.g. policy advice) it may
  be expressed as a requirement
• Policy advice will be provided as and when
  required by the Minister.
• In these latter situations the quality and
  timeliness dimensions are usually much more
  important than quantity.

53
Quality Indicators

• Quality is an important dimension of any output.
  We not only want to buy a good or service but we
  also want to get it to the requisite quality e.g.
  we would not want to buy a fridge that did not
  keep things cold! In public sector goods or
  services Quality can be expressed in a number of
  ways.
• In many processes such as benefit processing or
  tax processing it can be expressed as a measure
  of accuracy e.g. 90 of all tax returns processed
  will be correctly assessed for tax.
• In areas like policy or statistical analysis it
  can be expressed in terms of meeting standards
  for clarity, accuracy and coverage that will be
  set by the Minister.
• In cases where there are goods and services
  provided directly to the public it can be
  expressed as a percentage of the citizens who use
  the service who are satisfied with it (this can
  be measured by surveys/questionnaires).
• In items like infrastructural assets like bridges
  or roads it can be expressed in terms of meeting
  physical quality standards.

54
Quality Indicators

• However it is expressed quality is often one of
  the trade-offs against cost. While we may all
  want to produce goods and services to the best
  quality there may well be limits imposed by
  funding constraints. This can mean that quality
  standards need to revised so that the coat is
  cut to match the cloth
• We may accept a higher degree of first time error
  in processing applications say 80 being fully
  accurate instead of 90.
• We may set lower standards for the quality of
  analysis.
• We may accept that less of the public will be
  satisfied with the service.
• We may not meet all construction standards where
  this is not essential (although this is a very
  risky approach).
• However there are other tradeoffs too.
• We may have less of the good or service (reduce
  quantity)
• We may accept slower delivery (reduce
  timeliness).
• We may pay more. i.e. increase the funding of the
  relevant SBA programme.

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Quality - Timeliness

• Timeliness is another dimension of quality.
  Generally it is expressed as a period within
  which the good or service will be delivered. E.g.
  
• 95 of benefit applications will be processed
  within five working days of receipt.
• 5 of benefit applications will be processed
  within ten working days of receipt.
• OR it may be expressed as a single measure that
  will apply to all activities such as
• All benefit applications will be processed within
  fourteen working days of receipt.

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Possible Levels of Performance Indicators and
Targets

• Government-wide or Population
• Typically involves jurisdiction-wide policy
  targets and indicators such as a reduction in
  crime rates, an increase in household income or a
  lowering of unemployment, etc.
• Government-wide or population outcomes often
  involve cross-departmental activities (e.g. an
  increase in success rate of small business
  start-ups may depend on the actions of several
  different government departments).
• Local/municipal
• Typically involves a mix of policy and programme
  targets/indicators related exclusively to the
  activities of a specific local function (e.g.
  number of displaced families assisted, speed with
  which various applications are processed etc.)
• Output indicators are considerably easier to deal
  with than outcomes but may provide little or no
  information on the quality of programmes or
  services.

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Possible Levels of Performance Indicators and
Targets

• Organizational Unit
• Typically involves key performance targets and
  indicators within an organizational unit and may
  vary widely depending on the unit. For example,
  a finance or internal administration unit would
  have very different performance indicators and
  targets than a social care unit.
• Over-reliance on quantitative outputs, complex
  ratings and formulas or highly subjective
  criteria can easily obscure real performance.
• Individual
• Typically involves specific performance targets
  and indicators relevant to the key tasks and
  activities of a specific individual.
• Many governments focus on executive and
  management levels, tying results achieved with
  remuneration, bonuses or employment contract
  renewal.
• Complementary activities are needed for
  individual performance accountability to be
  effective, such as ongoing monitoring and
  oversight of implementation to ensure uniformity
  and consistency, training, effective leadership,
  coaching and mentoring, etc.

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Review of Performance Concepts
Objectives or outcomes What the government
wants to implement for the public
Outputs Services provided or bought for the
external beneficiaries by the SBA
Activities - the processes that are implemented
during delivering the outputs (and for delivery
of outputs )
Inputs the resources, which are used for the
provision of outputs
Costs the resources, which are used for input
financing