Models of Performance-Measurement Use in Local Governments: Understanding Budgeting, Communication, and Lasting Effects

Abstract

While attention has been paid to a few cities and counties exhibiting effective performancemeasurement systems, most U.S. local governments have been active in the development and use of performance measurement for several decades. This research examines the effects of performance-measurement information on budgetary decision making, communication, and other operations of U.S. local governments. Data are drawn from a national survey of city and county administrators and budgeters that included nearly 300 governments. Findings indicate the use of performance measurement by local departments is pervasive, although survey respondents are less enthusiastic about measurement effectiveness. Study results show subtle distinctions between city and county officials in their use of performance measurement for budgetary purposes and processes. Research findings indicate the consistent, active integration of measures throughout the budget process is important in determining real budget and communication effects in local governments.The distinctions within and across levels of government in the United States and their success with regard to performance-measurement implementation are many. At the federal level, for example, agencies are scrutinized regarding their adherence to the Government Performance and Results Act of 1993, as well as to recent governmentwide and program-specific performance-related initiatives of the President's Management Agenda. The Government Performance and Results Act holds agencies accountable for performance and results reporting within a performance-budgeting process. The Bush management agenda calls for more substantive attention to performance measurement and its integration with budgeting decisions: a more realistic and long-term perspective of what government agencies do, how to measure what they do, and how to attribute costs to specific results. Today's federal agencies are held to higher standards as far as the level of transparency of performance information they afford internally and to the public, as well as how this information contributes to program results and eventually the community at large (Ellig 2000).Selected state and local governments are often cited for their advanced practices related to results-oriented systems. 1 While most governments at these levels have adopted some sort of application of performance measurement, successful or effective implementation of a performancebased system has been recognized as much less comprehensive. This research examines the perceptions of local administrators and budgeters about performance-measurement effectiveness and its applicability to management and budgeting practices in their governments. Our study is based on the premise that performance-measurement apJulia Melkers is an associate professor of public administration at the University of Illinois-Chicago, where she teaches and conducts research on performance measurement and public management. She has worked with numerous governments on the development and use of performance measures...

The Big Question for Performance Management: Why Do Managers Use Performance Information?

“…It is also possible that time in organization might have a negative effect on performance information use since employees may become jaded. Melkers and Willoughby (2005) find that organizational tenure is negatively related to one of their three measures of performance information use. We did test the effects of organizational tenure in an alternative specification of the model and did not find it to have a significant linear or curvilinear relationship.…”

“…There is some research support for this view. Various measures that track the availability of performance information have been found to be positively associated with use ( Melkers and Willoughby (2005) find that the availability of measures in budget documents actually reduces the influence of these measures in the budget process and suggest that this may be the result of information overload. Ammons and Rivenbark (2008) point out that it is not only the existence of measures but also the ability to tie these measures to management systems that fosters use.…”

“…Bourdeaux and Chikoto (2008) examined the role of the governor, the legislature, and the state political context. Melkers and Willoughby (2005) categorized variables in terms of community characteristics, respondent characteristics, organizational culture, and performance measurement characteristics. Moynihan and Ingraham (2004) and Dull (2009) both placed the role of leadership as central.…”

“…The following variables have been found to be positively associated with performance information use: administrative stability (Askim, Johnsen, and Christophersen 2008); internal requirements and lower levels of government (de Lancer Julnes and Holzer 2001); inclusion of organizational members in performance management processes (Melkers and Willoughby 2005); and chief executive power (Bourdeaux and Chikoto 2008). Factors that have been negatively associated with performance information use include efforts by the central agency to control the policy agenda (Moynihan and Ingraham 2004) and measurement challenges (Dull 2009).…”

“…It is important to note that there is evidence that leaders, including elected officials, can inspire performance information use among managers. But much of this research suggests that this influence comes not from the direct use of information, but by communicating credible commitment to performance systems, through symbols, the allocation of resources, and leadership attention (Askim, Johnsen, and Christophersen 2008;Bourdeaux and Chikoto 2008;Dull 2009;Ho 2006;Melkers and Willoughby 2005;Moynihan and Ingraham 2004). It may be possible for generalist leaders to encourage performance information use even as they do not follow their own advice.…”