PERFORMANCE MANAGEMENT PRINCIPLES & PRACTICES

Key Concepts In Performance Management

Systems Thinking

A continual focus on ‘systems thinking’ is the backbone of the City’s performance management framework. Systems thinking is a holistic way of problem solving that examines relationships in a process, system, or organization, rather than just the individual components. This approach is particularly relevant for the City, where addressing even a ‘simple’ problem can involve multiple departments, affect other areas of operation, and have impacts both near- and long-term.  

A systems-thinking approach challenges City leaders to address complexity in their work, with an acknowledgement that understanding a problem requires understanding the context it exists in and how it connects to every other part within that context.

The City’s performance management principles and practices are based on this concept that outcomes and results are not produced in isolation or driven solely by any one person's successes or failures. Instead, they arise from interconnected relationships and systems that shape all outcomes, both positive and negative. By building the performance framework on this foundation, the City can better equip its employees and leaders to make operational changes that have an actual and lasting positive impact.

Performance Management & Performance Measurement

Two closely related and important concepts mentioned throughout this report are performance management and performance measurement. We define performance measurement as the process of defining, collecting, analyzing, and reporting data about programs and services, operations, outputs, outcomes, and conditions. Performance management is the use of that information to guide decisions, improve programs and services, allocate resources, and strengthen accountability.  

In other words, performance measurement helps the organization see what is happening, and performance management helps the organization understand what it means and what should happen next.  

This distinction between the two is important because a performance system that only produces metrics or reports can become passive, focused on turning out numbers rather than the more difficult task of managing the systems and process that produce those results.  A true, high-quality performance management system creates a regular practice of learning, decision-making, and improvement.

Measures, Metrics & Key Performance Indicators

Measures, metrics, key performance indicators - there is no shortage of terms that all refer to the same thing: a desire to measure our efforts or their impacts. Though these terms are used almost interchangeably, how each is used and applied has notable implications for the City’s performance management practices.  

It follows that all KPIs are metrics, and all metrics are measures, but the reverse is not true. The distinction between a KPI and a metric is particularly important. Performance data used to understand a process or to detect changes serves a different purpose than evaluating whether that process is effective at delivering what it was designed to do. In short, processes and systems are designed to perfectly deliver the results they deliver. Whether or not those are the results that should be delivered raises a different question altogether.

Both metrics and KPIs can and should prompt decisions and actions from staff. Because of this, process and system managers must be mindful of what behavioral incentives are created with the use of performance targets. Continual improvement, in terms of both effectiveness and efficiency, is a core part of managing City performance for the public good. It’s not to say that because they create behavioral incentives that the use of performance targets or goals should be avoided, but rather it emphasizes the importance of understanding outcomes at a system level, so that no single metric or indicator creates undue or disproportional influence on staff.  

Performance metrics and indicators are best interpreted in context, with mindfulness given to the relevant factors that may also impact how a program or service delivers results. This concept is reflected in the performance principles and practices with a strong emphasis on thoroughness and intentionality when developing metrics. The addition of guardrails can also prevent an overreliance on metrics and indicators outside their intended use.  

Types of Measures

The City and its departments have made a concerted effort to develop performance measures that are consistent with their missions, goals, and objectives. These measures state what is going to be accomplished, the outcome or impact to customers, and/or what it is going to cost. Accordingly, the City uses the following definitions to indicate what question the measure is intended to answer:  

Each of these measures can be classified as internal or external.

Lastly, these measures may also be further described as leading or lagging. The definitions below are adapted from ICMA, Getting Started: Performance Management for Local Government, 2nd Ed., 2019.