Workbook 13

Workbook 13

Performance measures and indicators 

Measures

eg. an exact cost of a service or project

such measures need to be SMART

• Specific - a clear definition, including where the data comes from
• Measurable - data must be available to measure progress
• Achievable - in terms of available resource, costs and practicality
• Relevant - measures should relate to what is being measured
• Time bound - there should be a deadline

They also need to be

• Understandable
• Defendable
• Traceable
• Reported

Indicators

Key point: Performance indicators are different from performance measures in two aspects:

• Performance indicators do not have to be exact.
• They look at performance in context (and often, in relation to others).

eg. a smoking cessation programme ran by a health body.

Performance measure- actual amount spent in a year (eg £350k)

Performance indicator- spend per 1000 population in an area serviced by that health body eg £500 per 1000population. These can be compared to performance of other health bodies. This is average rather than exact spend. However tend to be preffered by PSOs because they provide context.

Examples of KPI- A&E waiting times (4hrs target), cancer treatment times, infection instances

However don't always full explain the context as they tend to focus on outputs and inputs rather than outcomes.

Setting budgets and measuring performance

The most used financial measure in public services organisations is adherence to planned expenditure (budgeting).

Any budget or financial plan needs to be carefully planned with robust justifications for planned spending.

Considerations will include:

• funding provided and/or resources available (‘how’)
• what services, products or programmes are required to be provided (‘what’)
• anticipated / forecasted demand for services (‘how much’)
• how that spending is built up (i.e. subjective analysis) (‘what exactly’).
• overspend it is true can show financial performance is not well managed but the same with an underspend have you invested enough in services
• as a financial measure budgets can be flawed tool if the budget is not set accurately
• much better to look at measures such as unit cost

Leading and lagging indicators

Most performance indicators can be categorised as leading or lagging.

Key point A ‘lagging’ indicator is one which typically focuses on outputs, and will normally be:

• easy to measure
• but hard to influence and hard to improve
• Lagging indicators are backward-focused or ‘trailing’—they measure performance data already captured.
• They are measures which focus on results at the end of a time period.

A ‘leading’ indicator is one which typically focuses on inputs, and will normally be:

• much harder to measure
• but - easier to influence
• They are measures that ‘drive’ or lead to the performance of lag measures; normally measuring intermediate processes and activities.
• They tend to change quickly and come before a trend.

When considering indicators you should:

• identify what you are already measuring and determine if it provides value to your organisation in your backward and forward thinking.
• identify the indicators that will tell you whether you have achieved your desired outcome(s) (lagging), as well as the indicators that…