Linking Budget to Performance
“Using Scorecard Measures To Reward Good
Performance”
Thomas Tolley
September 28, 2004
GSA/PBS’s Measures Program
¾ President’s Management Agenda
¾ President’s Scorecard
¾ OMB Program Assessment Rating Tool (PART)
¾ GPRA – Performance Plan/Budget
¾ General Performance Review Process (GSA)
¾ Linking Budget to Performance (PBS)
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Performance Measures
Linking Budget to Performance
Program is PBS’s “home grown”
measurement program.
We call it LB2P!
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LB2P – What and Why
¾ What is LB2P?
– Allocation of budget dollars to our PBS regions
based on performance
¾ Why do we use it?
– Measures increase attention to customer
satisfaction and program efficiency
– Emphasis on the areas PBS can and should do
better
– Encourage more consistent outcomes
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LB2P – What and Why
¾LB2P was put in place to:
•Help Regions focus on performance
•Instill accountability for performance
•Foster financial discipline
•Establish clear links between resource
allocation and performance
¾Measure Selection
•Key measures that drive our business
•Measures that need special attention
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Benefits of LB2P
Has Yielded “First Year” Income
and Savings of Over $850
Million!
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$850 Million Equates to...
Boston Courthouse
Denver Courthouse
Tucson Courthouse
Oakland FB & Courthouse
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How the Program Works
¾ PBS associates seek to meet or exceed
performance goals on 9 measures
¾ Regions are awarded with increased
budget; individuals with cash
¾ “Good/Best Practice” sharing
¾ Continual reinforcement of twin
messages: Innovation Matters &
Performance Pays!
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Keys to the 2004 Program
¾Allocation pool of $53 million
¾Concentrate on a few key measures
¾Emphasis on the areas PBS can and
should do better
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The “Big 9” Measures
Performance Measure
Weight
Target
Focus
Tenant Satisfaction Survey
10.0%
Regional
Customer
Customer Mission Index
15.0%
National
Customer
Customer Relations Index
15.0%
National
Customer
Data Accuracy
15.0%
Regional
Customer & Financial
Construction, On-Schedule
7.5%
Regional
Financial
Construction, On-Budget
7.5%
Regional
Financial
Funds from Operations
15.0%
Regional
Financial
Vacant Space
7.5%
Regional
Financial
Repairs and Alterations
7.5%
Regional
Financial
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Space in the PBS Inventory
Producing No Revenue
45,000 Sep 98 Total 335.6 Mil RSF
Sep 98 NRPS 43.4 Mil RSF
12.9%
35,000
30,000
Sept 03 Total 340,4 Mil RSF
Sept 03 NRPS 23.4 Mil RSF
7.9%
25,000
20,000
Se
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ar
Ju 99
nSe 99
p
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c
M -99
ar
Ju 00
nSe 00
pD 00
ec
M -00
ar
Ju 01
nSe 01
pD e 01
cM 01
ar
Ju 02
nSe 02
pD 02
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M -02
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Ju 03
nSe 03
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Thousands RSF
40,000
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Funds From Operations
PBS Total Inventory
$1,500
$1,408
$1,478
$1,337
Millions
$1,188
$1,000
$840
$1,163
$861
$500
$0
FY97
FY98
FY99
FY00
FY01
FY02
FY 2003
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Customer Satisfaction Scores
100%
Customers Satisfied
95%
89%
90%
85%
80%
74%
75%
70%
65%
60%
55%
50%
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
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Direct Impact on People
¾ Our associates know what is expected
¾ Every one knows, up front, what their
performance targets are and what it means
¾ They know where their performance stands
¾ They know who is doing better / who to ask
for best practices
¾ They see a direct link between effort &
organizational success
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The Bonus Pool
¾Money that a region doesn’t earn, goes into
a bonus pool
¾Regions whose performance in a measure
exceeds a national goal earn some of the
bonus pool.
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Linking Budget “Real World”
Lessons:
¾ Measurement systems designed to drive
behavior are more human motivation
programs than “metrics” programs
¾ Perceived Fairness > Statistical Significance
¾ Understandable > Precision
¾ The best motivational measures are those
founded solidly in 5th grade math.
¾ Our worst motivational measures were often
our most comprehensive, elegant and
technically superior measures
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Linking Budget “Real World”
Lessons:
¾ The perfect is the enemy of the good
¾ The people/organizations measured, should
be as involved as possible in the
development and targeting of a measure
¾ The best use of contractors is to provide
research, facilitate and support measure
develop by your associates
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Linking Budget “Real World”
Lessons:
¾ Set aside enough $$ to get people’s
attention
¾ But don’t set aside so much that
customers in any of the regions are
short-changed
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Linking Budget “Real World”
Lessons:
¾ Establish the measures you need to effectively
manage by, and then get the data you need
¾ Don’t avoid a measure just because the data
you need is not easily available
¾ Always look for a better way to measure: No
change takes you backwards and only
change can take you forward
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Linking Budget “Real World”
Lessons:
¾Set internal targets aggressively to
ensure that some real effort needs to
be made to reach them
¾Don’t set targets so aggressively that
a region gives up on a measure
before they try
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Linking Budget “Real World”
Lessons:
¾Customize targets for your business
units so that they are viewed as fair
and reasonable by all
¾Primary competition should be
against self, not others
¾Change measures as
¾ business needs change
¾ performance improves towards
optimum levels
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What Gets Measured Gets Done
if…
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