Since the passage of the Government Performance and Results Act (GPRA) in 1993, the federal government has gradually expanded the use of performance management techniques, culminating with the GPRA Modernization Act of 2010.
For any administration that is serious about improving federal government performance, the act provides a workable framework. The primary management challenge faced by the White House will not be to establish a new reform agenda. Instead, it will be to create the conditions necessary for the success of the Modernization Act.
The New Federal Performance Management System
The Modernization Act includes many new requirements that the president should use. More detail can be found in Part 6 of the Office of Management and Budget's (OMB's) recently revised Circular A-11.
Key Actions in First 100 Days
The president will need to appoint the following key officials quickly to effectively implement the many time-critical requirements in the Modernization Act.
- The deputy director for management in OMB has a critical role in the act's implementation and in the leadership of the entire performance system.
- The deputy secretaries typically serve as their departments' chief operating officers. Put managers, not policy experts, in these roles.
- Agencies must designate performance improvement officers. They are the chief operating officer's right hand. These officials can be appointees or career executives, but if an appointee is selected they should have a career backup.
- Agencies already have in place more than 100 "priority goals." By law, each must have a designated goal leader. These officials are responsible for overseeing the achievement of a specific goal, and leading discussion on these goals in quarterly reviews. There are also 14 cross-agency priority goals. Each must have a designated "senior accountable official" identified by OMB.
For all of these positions that will be filled by a political appointee, the Office of Presidential Personnel must put a new emphasis on performance management and analytical skills: goal setting, measurement, analysis, and evaluation. For the Modernization Act to succeed, these appointees and other key career officials will need to meet a series of important expectations, which are detailed later in this article.
Key Actions in the First Year
The new law has a number of requirements that must be completed by the end of the administration's first year. Among them:
- Agencies must develop a four-year strategic plan and an annual performance plan with specific indicators. Under the new law, these plans are now co-terminus with presidential terms. This provides a mechanism for a president to define and measure progress toward broad policy goals. Agencies also must consult with Congress on the content of their plans—this will require acting sooner rather than later.
- Agencies must report performance data on a quarterly basis, and hold data-driven quarterly reviews of agency priority goals. Each agency already has a small number of designated agency priority goals. These goals seek improvement on key items within a 24-month timeframe. Pay careful attention to this set of goals.
- OMB must produce the first-ever federal government performance plan featuring cross-agency priority goals and targets for improved government performance, reported annually with quarterly reviews.
- OMB is expected to identify goals agencies failed to achieve, and to require remedial action. Use this authority to focus greater agency attention on strategic reviews. This administration will be the first to develop the decision-making process for judging the progress of agency strategic goals. Unmet goals, by law, are subject to a graduated response from OMB. When agencies know that they must face annual OMB attention to progress on strategic goals, this should encourage them to undertake more serious strategic reviews.
Expectations for Performance Leaders
The formal requirements of the Modernization Act can be implemented either in a pro forma way, or as a real tool to change the way government operates. The latter will require a fundamental shift in beliefs and practices across government, which must be led by your team of government-wide "performance leaders": OMB staff, led by the deputy director for management, agency chief operating officers, performance improvement officers, and goal leaders. Hold them to these key expectations:
- Improve performance by increasing the use of performance data. In pursuing the changes noted above it is important to define a realistic measure for success. While the ultimate goal of performance systems is to improve governmental performance, the federal government generally undertakes complex tasks where it is difficult to isolate the relative impact of government itself on these outcomes—far less the role of a performance management system.
- An intermediate measure of success is whether federal actors are making systematic use of performance data. Ultimately, success will be reflected in a widespread ethos of performance improvement, which can be measured by use of performance data, evaluations, and other evidence to shape decisions. Within the executive branch, this means that federal managers are using data in budget and implementation decisions, to motivate and manage their employees, and to redesign processes to improve outcomes. Surveys undertaken by the Government Accountability Office and the Office of Personnel Management can help to track whether this is happening.
- Use administrative flexibilities to reduce burdens on state and local governments and encourage innovation. In addition to the Modernization Act, the Obama administration released guidance on expanding administrative flexibility as a mechanism to identify and reduce burdens on state and local governments. The use of such flexibilities can further performance improvement goals. The federal government can play a role in encouraging state innovation, ensuring the collection of comparable statistics, and identifying evidence-based practices that work well.
- Develop mechanisms and strategies to improve collaboration across agencies. The emphasis that the Modernization Act places on cross-cutting goals underlines the fact that many federal government tasks require coordination across multiple agencies. Calls for greater collaboration across bureaucratic stove-pipes are not new, but the cross-cutting goal mechanism provides a stronger means to foster such collaboration than ever before.
To coordinate multiple agencies working toward overlapping goals requires treating these collaborations as inter-organizational networks. Networks such as these need basic governance mechanisms to determine how information is exchanged, and how decisions are made. The administration should seek examples of where collaborations between multiple agencies are working well.
- Make data-driven reviews a signature management initiative. By requiring quarterly review of goals, the Act creates a routine of data use within agencies for monitoring achievement on programmatic goals. Together with the annual strategic reviews OMB will conduct with agencies, these reviews are the most powerful revision to management practice provided by the Modernization Act.
- Demonstrate leadership commitment to performance. One of the clearest research findings about performance management is that such systems are more likely to succeed when they have the widely-perceived support of agency leaders. Leadership commitment means more than talking about performance. Employees will notice if words are not accompanied by the commitment of leadership time and organizational resources to performance management efforts. Without such commitment, employees will not commit either.
- Build a results-oriented learning culture. Leaders not only commit to performance management processes, they also set the cultural tone for how such processes are used. Leaders should primarily pursue a learning approach to the use of performance measures, which calls for employees to acknowledge problems, question basic assumptions, and invest their ingenuity to solve problems. If performance measures are seen as a punitive tool to target poor performance, employees will respond defensively and limit their cooperation. The data-driven reviews will be key venues where the cultural tone of the performance management system will be established.
- Use benchmarking to foster improvement. Benchmarking means identifying best-in-class in an industry or function, and comparing key performance metrics against these high performers. It has been underutilized in the federal government. If agencies use it well, it will encourage greater use of performance data to define stretch targets, learn what factors create success, and motivate employees. Reflecting a learning culture, the goal should be to look for positive outliers and best practices that can inform the efforts of others.
- Strengthen and integrate analytical capacity across the government. The performance challenges facing the federal government demand both a new set of skills among employees, as well as a better integration of existing skills.
Especially important is an ability to communicate performance information well and to think about how it will be used. Communication includes the ability to understand the needs and interests of different audiences, and to select and explain data of interest to them. Those who are appointed to be goal leaders will need to be able to convene and facilitate discussions about the meaning of performance, and convert that dialogue into process improvements or policy suggestions. OPM should prioritize such skills in hiring new managers.
Better integration of existing skills will facilitate organizational learning. Agencies employ talented program evaluators and policy analysts who can improve understanding of how to prioritize competing goals or how to improve performance. These employees should be integrated into the quarterly reviews and elsewhere.
Another spur to improve performance is to pursue evidence-based funding. This could be funding to provide grants for promising but unproven innovations; resources to scale-up innovations where there has been significant evidence of its success; or the use of evidence to adjust formulas in federal grants.
Congress Must Play a Greater Role
Congress has a paradoxical relationship with the federal performance management system. On the one hand, it has been the primary designer of this system and holds a unique capacity to convene a public dialogue about federal performance through its oversight and budgeting functions. But Congress has been ambivalent in engaging with performance management. This is problematic because goal clarity is central to mission achievement. When the White House and Congress direct agencies to achieve contrary goals, the ultimate goal of performance management will be undercut.
- The White House should encourage agencies and OMB to proactively consult with Congress early in the goal-setting process, and demonstrate a willingness to reflect congressional priorities. The Modernization Act requires agencies and OMB to actively consult with Congress and stakeholders in setting all type of performance goals. Agencies are required by law to reach out to Congress on the agency priority goals, and the administration is required to do the same on the federal priority goals.
- The White House should set an expectation of its performance leaders to make performance information more useful to Congress. Congressional members and staff are used to receiving information that has been carefully designed to meet their interests. This is generally not their experience with performance data produced by the executive branch. Agency chief operating officers should be expected to proactively reach out to their congressional committees to find out what performance information is of particular interest to them. These may be goals that reflect constituent interests, but committees also may be engaged by consideration of high-priority goals, or of non-mission-based goals that reflect congressional directives (for example, Freedom of Information Act requests that capture transparency goals).
- Congress has a responsibility to engage. While the executive branch can do more, the ultimate responsibility remains with Congress to engage on performance issues in a systematic way. Congressional leadership should articulate a priority that it will use performance information as it carries out legislative responsibilities. Congress is not a monolithic entity, but at the very least appropriations, authorization, and oversight committees should consider relevant performance data.
Relevant committees should meet with agencies when they reach out to discuss their goals. Agency officials should come to congressional hearings expecting to be queried about performance data.
Congress also can create incentives to improve innovation by offering the executive branch flexibility to move funding around programs where these programs share a set of goals. Such flexibility should be conditioned on clear and agreed-upon goals, frequent reporting, and the use of evidence-based strategies.