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Balancing Measures: An Evolving Process

Participants at the 1999 Strategic Compensation Conference had the opportunity to hear agency representatives describe how they used balanced measures of results to improve performance and achieve organizational goals. The speakers stressed the importance of using balanced measurements, including the achievement of organizational strategic goals, results of customer satisfaction surveys, and employee perceptions of workplace quality, including working conditions.

• Balanced Measures.
• Measuring Results.
• Measuring Customer and Employee Feedback.
• Measuring Employee Feedback.

Balanced Measures. Speakers emphasized that to have truly balanced measures requires continued dialogue with stakeholders, employees, and customers. Linking organizational goals with individual performance, identifying critical measures, and monitoring the outcomes demand a major cultural shift for organizations. This shift requires:

• flexibility,
• commitment to change,
• management involvement, and
• constant communication with employees, customers, and stakeholders.

Kathleen Monahan, project leader for the National Partnership for Reinventing Government's (NPR) latest report, "Balancing Measures: Best Practices in Performance Management," highlighted experiences from Federal, State, local, non-profit, and regulatory agencies. She stressed that the process of balancing customer, employee, and stakeholder needs is a "living" process and should remain flexible.

Measuring Results. Gloria Snowden and Michael Packard illustrated how the Office of the Associate Administrator for Research and Acquisitions (ARA) at the Federal Aviation Administration has adapted many of these NPR best practices into its performance management program. ARA's performance appraisal program links individual performance plans to organizational goals and specifies results-based measures. The 1,200 nonbargaining unit employees under this pass/fail program are linked to the overall organizational success by at least one critical results element. After 2 years under this program, Ms. Snowden reported that 46.8 percent of individual performance goals were directly linked to organizational goals, and that improved feedback and dialogue should improve this percentage. The new pay system in ARA establishes greater flexibility in pay and allows top contributors to receive additional base pay increases. The success of this change from entitlement to results helps to attract and keep talented staff with pay increases linked to superior contributions and increases overall organizational success.

Measuring Customer and Employee Feedback. Philip N. Diehl discussed his experience as the Director of the U.S. Mint in using ongoing feedback from both customers and employees as part of the Mint's balanced scorecard to completely revamp how it does business. By listening to customers' greatest concerns and partnering with its union, the American Federation of Government Employees, the Mint was able to shorten the time to fill numismatic customer orders from 8 weeks to 4. The use of an organizational assessment survey over 5 years caused the Mint to directly involve its employees in shaping a new culture: partnering with customers, the Federal Reserve, and Congress. As a result, the Mint now processes l.5 million dollars a week in Internet sales, has increased employee training to 2.5 million dollars a year, achieved a 23 million dollar surplus in numismatic sales in 1998, and for the first time in its history has involved the American public in the design of a series of new quarters. The Mint has led all Government agencies in customer satisfaction over the last 3 years. Above all, according to Mr. Diel, the Mint has combined "a public sector sense of service with a private sector insistence on outcomes."

Measuring Employee Feedback. For Jennifer Long, from the New York Regional Office (NYRO) of the Veterans Benefits Administration, the key to achieving results using balanced measures was changing the employee performance measures being used and linking them to organizational goals by aligning annual performance ratings with incentive pay. The NYRO selected five areas to measure: customer satisfaction, speed, accuracy, cost per claim, and employee development. An in-depth assessment organization, team, and individual–helped to create a new culture in which supervisors became coaches and awards and promotions were linked to balanced score-card goals. Team measures assess technical skills within the team and the stage of team development. Managers use a software assessment of individual technical skills to plan employee development. In addition, external stakeholders became part of the feedback loop, including veterans, their families, and taxpayers, thus ensuring accountability to their customers.

Continuing to balance results-based measures and listening to customers', employees', and stakeholders' needs takes time and commitment. As was clearly explained by these speakers, time and commitment really pay off. The process of establishing critical measures and tracking balanced results over time allows agencies to improve both individual performance and organizational outcomes.

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Originally published on October 1999.