CHAPTER FOUR
Targeting Results: Clarifying Goals and Objectives

What are goals, objectives, service standards, and targets? How should agency or program goals and objectives be stated in order to facilitate results-oriented management and performance measurement? How are goals and objectives related to performance indicators? This chapter discusses the kinds of goals and objectives used in public and nonprofit organizations; it also explores how performance measures are often derived from statements of goals and objectives and how sometimes the measures themselves are used to further specify goals statements.

Mission, Goals, and Objectives

Usually the most meaningful performance measures are derived from the mission, goals, objectives, and, sometimes, service standards that have been established for a particular program. This is because goals and objectives, and to a lesser extent mission and service standards, define the desired results to be produced by an agency or program. Clear goals and objectives are intended to improve organizational performance by focusing employees' energy and efforts on desired results (Locke & Latham, 1990). Thus, there is usually a direct connection between goals and objectives on the one hand and outcomes or effectiveness measures on the other. While it is often very useful to develop logic models to fully understand all the performance dimensions of a public or nonprofit program, depending on the purpose of the measurement system it is sometimes sufficient to clarify goals and objectives and then define performance measures to track their accomplishment.

It should be understood that there are no universal distinctions among these terms in the public management literature, and there is often considerable overlap among them, but the definitions we use in this book are workable and not severely incompatible with the distinctions others have made. Mission refers to the basic purpose of an organization or a program, its reason for being, and the general means through which it accomplishes that purpose. Goals are general statements about the results to be produced by the program, and objectives are more specific milestones to be achieved in order to accomplish the goals. Whereas goals are often formulated as very general, often timeless, sometimes idealized outcomes, objectives should be specified in more tangible terms.

US Department of Health and Human Services

The US Department of Health and Human Services (DHHS) is a good example of a large federal department that has gone through the process of clarifying its mission, goals, objectives, and performance measures in compliance with the Government Performance and Results Act (GPRA) of 1993 and the more recent GPRA Modernization Act of 2010. DHHS, the federal government's principal agency for protecting the health of Americans and providing essential human services, manages more than three hundred programs through eleven operating agencies and an extended network of state, local, and other grantees in a wide variety of areas, such as medical and social science research, food and drug safety, financial assistance and health care for low-income individuals, child support enforcement, maternal and infant health, substance abuse treatment and prevention, health insurance, and services for older Americans. The department's formal mission statement is, “To enhance the health and well-being of Americans by providing for effective health and human services and by fostering strong, sustained advances in the sciences underlying medicine, public health, and social services.”

To pursue this mission, DHHS has identified the five following strategic goals, which are formulated in very broad statements:

1. Goal 1: Strengthen health care.
2. Goal 2: Advance scientific knowledge and innovation.
3. Goal 3: Advance the health, safety, and well-being of the American people.
4. Goal 4: Increase the efficiency, transparency and accountability of HHS programs.
5. Goal 5: Strengthen the nation's health and human services infrastructure and workforce.

For each of these strategic goals, DHHS (2012) has defined a number of supporting objectives that are somewhat more targeted and specific in terms of desired behaviors, conditions, or circumstances. With respect to goal 3, for example, to “advance the health, safety, and well-being of the American people,” the following objectives have been set:

1. Objective 3.A: Promote the safety, well-being, resilience and healthy development of children and youth. (p. 50)
2. Objective 3.B: Promote economic and social well-being for individuals, families, and communities. (p. 54)
3. Objective 3.C: Improve the accessibility and quality of supportive services for people with disabilities and older adults. (p. 58)
4. Objective 3.D: Promote prevention and wellness. (p. 62)
5. Objective 3.E: Reduce the occurrence of infectious disease. (p. 67)
6. Objective 3.F: Protect Americans' health and safety during emergencies and foster resilience in response to emergencies. (p. 71)

As will be seen in subsequent chapters, performance measurement is often a process of sequential specification from very general goals to specific indicators. The challenge is to ensure that the operational indicators that measure particular kinds of results in fact represent the kinds of outcomes intended by the general goals. The six objectives supporting goal 3 are still quite general statements of intended accomplishments, but they are clearly more focused indications of intended results that are tied directly to the goals.

In the next step in the sequence, each objective is fleshed out with multiple performance measures, as illustrated in table 4.1 for objective 3.A, promoting the safety, well-being, resilience, and healthy development of children and youth. Data sources are provided for each of the seven measures, along with a level of performance on that measure targeted for the year 2013 and the operating agency charged with lead responsibility for attaining it. For example, one measure that reflects the well-being and healthy development of children is the percentage of children who had been in foster care less than twelve months who exited foster care into a permanent arrangement with relatives, guardians, or adoptive parents. The Administration for Children and Families has lead responsibility for performance in this area, and the data to operationalize this measure will be taken from the adoption and foster care reporting system, while the target on this measure for FY 2013 is 92.5 percent or higher.

Table 4.1  Goals, Objectives and Performance Measures: US Department of Health and Human Services

Obviously each of these seven performance measures represents one slice, or dimension, of this particular objective, one perspective on what the results should look like. All seven indicators in this measure set are clearly aligned with the objective of promoting the safety, well-being, resilience, and healthy development of children and youth. Collectively this set of measures is intended to provide a balanced perspective on whether and the extent to which progress is made in accomplishing this objective over time.

Goals, Objectives, and Program Logic

While goals structures provide a different starting point as opposed to program logic models for identifying the aspects of performance that should be captured in a measurement system, the two are by no means incompatible. Indeed, in managing public and nonprofit programs, program managers and others frequently establish goals and objectives for their programs that are likely to focus on varying aspects of the program and its underlying logic. In general, managers are concerned with ensuring that programmatic activities are conducted efficiently and productively, that the quality of these activities and the outputs they produce are of high quality, that outputs are produced at the required levels, that the intended outcomes do in fact materialize, and that clients are satisfied with both the services they receive and the outcomes they experience. However, at any time, their goals and objectives are likely to focus in particular on those program components and performance criteria where improvement is most needed, and these focal points of interest are likely to change over time as conditions require.

As an example, consider a state government's vocational rehabilitation program (see the logic model in figure 3.3). Looking at the overall longer-term outcome, clients successfully employed, suppose that performance has been eroding in terms of appropriate fit between what clients have been prepared to do with the requirements of the jobs they are in, clients working productively in those jobs, clients remaining in those jobs for significant periods of time, clients' satisfaction with the jobs they are in, and employers' satisfaction with the clients' productivity and the quality of their work. Clearly, under these circumstances, management might establish a major goal of increasing the percentage of clients successfully employed on all the criteria noted.

Working back through the program logic, the data might indicate that the program is not doing a good job of preparing clients for viable occupations, an initial outcome in the logic model, and appropriate objectives might be set regarding better preparation of clients for such occupations, which might be different from the kinds of occupations the program has been focusing on. In turn, this might lead to a finding that the training programs conducted, a chief output of this program, and new objectives might well focus on strengthening those training programs. Alternatively, the program might be doing a good job of providing training programs and preparing clients for viable occupations, but the problem lies in the fact that staff has not been doing a good job of identifying good prospective jobs. Thus, clients often must settle for jobs that are not particularly well suited for them, and this is not working out well in the long run for either the clients or the employers. This would likely lead to new objectives to increase both the volume and quality of this particular output: suitable jobs identified. In addition, further investigation may find that staff are not producing useful on-the-job evaluations of clients in the initial jobs, allowing “misfits” to continue, and this might lead to clearer objectives regarding the production of more discerning assessments with more helpful recommendations, addressing another quality-of-output issue. The point here is that goals and objectives might well pertain to any or all of the elements in a program logic, and while they might shift over time as might a logic model itself, they often provide a good point of departure regarding those aspects of a program's performance that are important to measure.

“SMART” Objectives

It is often helpful for program objectives to specify milestones to be attained within certain time periods, but in practice, objective statements are often overly general, vague, and open-ended in terms of time. Poorly written objectives fail to convey any management commitment to achieve particular results, and they provide little guidance for defining meaningful measures to assess performance. However, specific goals tend to help focus energy and attention on producing desired results in specific amounts rather than being scattered across a range of necessary and unnecessary activities (Carroll & Tosi, 1973). Truly useful program objectives can be developed using the SMART convention, stating objectives that are Specific in terms of the results to be achieved: Measurable, Ambitious but Realistic, and Time-bound (Broom, Harris, Jackson, & Marshall, 1998). With respect to highway traffic safety programming, for example, the objective of reducing the reported number of crashes on the nation's highways to fewer than 3 per 100 million vehicle-miles driven and the number of highway accident fatalities down to no more than 10 per 100,000 US residents by the year 2020 would be a SMART objective.

SMART objectives clearly indicate the kind of result or improvement to be obtained within a specified time period. The measure to be used in determining whether an objective has been achieved at the end of that period should also be identified along with the SMART objective. For example, the measures to be used in conjunction with the highway safety objectives stated above will be the number of reported crashes per 100 million vehicle-miles operated and the number of highway accident–related fatalities per 100,000 US residents, both to be drawn from the Fatality Analysis Reporting System maintained by the National Highway and Transportation Administration. In addition, SMART objectives establish targets—levels on performance measures that programs or agencies have identified to be achieved within the specified time period. For the measure of reported crashes per 100 million vehicle miles traveled, the target identified above is 3 or lower, while the target for the number of highway accident fatalities per 100,000 population is 10 or lower.

Table 4.2 shows examples of possible SMART objectives for a variety of public and nonprofit programs. For example, a nonprofit firm providing residential services for persons with mental disabilities might target an average occupancy rate of 90 percent or higher in the facilities it operates, while a local police department might set an objective of reducing the number of reported burglaries within its jurisdiction by 10 percent next year as compared to the current year. Similarly, a local school system might aspire to achieve an 80 percent pass rate on a particular suite of standardized exams by the 2015–2016 school year, while a local Big Brothers/Big Sisters program might set an objective of increasing the number of youth who are active in mentoring relationships with adults who have completed prescribed training for this activity by 20 percent over the next two years.

Table 4.2  SMART Objectives with Targets

Program	SMART Objective
Residential services for persons with mental disabilities	Increase the occupancy rate in community living arrangements to 90 percent by fiscal 2015
Local crime control	Reduce the number of reported burglaries by 10 percent next year compared to the current year
Big Brothers/Big Sisters	Increase by 20 percent over the next two years the number of youth who are active in mentoring relationships with adults who have completed the prescribed training
Public transit service	Increase revenue-generating passenger trips by 25 percent over the next five years
Vocational rehabilitation	Increase the number of clients placed in suitable jobs by an additional 800 placements next year over the current year
Public schools	Achieve an 80 percent pass rate on the Criterion-Referenced Competency Tests in reading, English, and math in all schools by 2016
Aviation safety	Reduce the number of dangerous incidents on airport runways to below 300 next year
Smoking cessation	Reduce the percentage of adults smoking cigarettes to 12 percent by the year 2020
Foster care	Increase the percentage of children exiting foster care in less than 24 months who exit into permanent living arrangements to 93 percent

The idea underlying SMART objectives is that the targets should be set at levels that are both ambitious and yet realistic. While some targets call for maintaining current or minimally improving performance levels, in the context of results-oriented management and the drive to improved performance, it is desirable to set targets that are relatively ambitious “stretch objectives” designed to challenge the program or organization to find ways to make meaningful improvement in performance. Very modest targets are not likely to encourage people to work harder and smarter to strengthen performance significantly. More ambitious targets, particularly when there is clearly strong commitment to them from higher levels of authority, can have a galvanizing effect on people and motivate program managers and employees to “stretch the envelope” in a quest to really make a difference.

Yet the targets established by SMART objectives must also be realistic and achievable in order to be productive. Overly aggressive targets that are out of reach or beyond the grasp of a program to achieve within the time period specified can be counterproductive because by definition, they amount to programming failure. Such targets are highly likely to backfire and create disincentives for working toward improved performance in the long run. Thus, finding a happy medium in establishing targets often requires careful assessment and sound judgment.

Performance Standards: Child Support Enforcement

The term performance standard is often used interchangeably with targets, particularly when they refer to outcomes and reflect performance expectations that are fairly constant over time. Consider the child support enforcement program operated by a state's department of human resources or social services. The mission of this program is to help families rise or remain out of poverty, and reduce their potential dependency on public assistance, through the systematic enforcement of noncustodial parents' responsibility to provide financial support for their children. Figure 4.1 presents the logic model for this program, working through three basic components designed to obligate support payments by absentee parents, collect payments that are obligated, and assist absentee parents, if necessary, to secure employment so that they are financially able to make support payments. The logic moves through locating absentee parents, establishing paternity when necessary, and obtaining court orders to obligate support payments, as well as helping absentee parents to earn wages, but the bottom line is collecting payments and disbursing them to custodial parents to ensure that children receive adequate financial support.

Figure 4.1  Child Support Enforcement Program Logic Model

The following performance standards have been established for this program, each with clear targets:

1. Establishing paternity for at least 80 percent of the children in the program's caseload who were born out of wedlock
2. Obligating support payments for at least 50 percent of the total number of cases
3. Keeping the cases that are in arrears in making payments to less than 50 percent
4. Collecting at least 40 percent of all the support that has been obligated

All four of these performance standards tie directly to initial, intermediate, or longer-term outcomes as specified in the program logic model. Although these standards might appear to be quite modest to the uninitiated, they might be considered to be fairly ambitious by this particular agency, given current performance levels and the difficulties in tracking down some absentee parents, establishing paternity, securing court orders, and collecting payments.

In any case, these standards, along with the program logic model, suggest that the following kinds of performance measures should be monitored over time:

Output measures

• Absentee parent searches conducted
• Paternity investigations completed
• Court orders sought
• Training programs completed
• Employment identified

Productivity measures

• Cost per noncustodial searches per locator
• Active cases maintained per agent
• Training programs conducted per training staff member

Efficiency measures

• Cost per paternity investigation completed
• Cost per account established
• Cost per noncustodial parent completing training program

Service quality and customer service measures

• The percentage of inquiries from custodial parents responded to within twenty-four hours

Outcome measures

• Percentage of children in caseload born out of wedlock with paternity established
• Percentage of noncustodial parents earning wages
• Percentage of cases in arrears
• Percentage of obligated support collected

Cost-effectiveness measures

• Cost per case of paternity established
• Cost per absentee parent employed through fatherhood initiative
• Total support collected per $1 on program expenditure

Customer/client satisfaction

• Percentage of custodial parents reporting they are satisfied with service received from their primary agents

The most salient output measures are the number of absentee parent searches conducted, the number of paternity investigations completed, and the number of court orders sought. The productivity measures are the number of noncustodial searches conducted per locator and the number of training programs conducted per training staff member, as well as the number of active cases maintained per child support enforcement agent, although the latter might well be considered to be more of a workload measure. The efficiency measures represent unit costs of such outputs as paternity investigations conducted, accounts established, and training programs completed. The one service quality indicator shown is actually a customer service indicator: the percentage of custodial parents who report being satisfied with the assistance they have received.

The most relevant outcome measures directly represent the performance standards shown earlier, including the percentage of caseload children born out of wedlock who have paternity established, the percentage with support payments obligated, the percentage of cases in arrears on making payments, and the percentage of all obligated support that is collected. The percentage of noncustodial parents who are earning wages tracks the effectiveness of the fatherhood initiative. Two of the cost-effectiveness measures, the cost per case of paternity established and the cost per absentee parent employed through fatherhood initiative, relate critical initial outcomes to the cost of realizing them. And since the bottom line in terms of outcomes is measured by the dollar value of support payments collected, the most comprehensive measure of cost-effectiveness is the value of total collections per one dollar in program expenditure. Depending on assessments of the actual performance of this program based on ongoing performance monitoring, the agency might well decide to set goals for improvement and possible SMART objectives as well on some or all of these kinds of indicators.

Setting Targets

Although many performance measurement systems establish SMART objectives with targets to be achieved on each indicator, other systems purposefully do not do so. Whether to set targets depends on the purpose of the measurement system and the management philosophy in the organization. For example, many state transportation departments have been in the forefront of the performance management movement (Transportation Research Board, 2001) and the majority of them incorporate targets in the measures they track.

In contrast, the New Mexico State Highway and Transportation Department took a different approach with respect to the approximately eighty indicators of performance in seventeen key result areas covered in its Compass system, which became the driving force of management and decision making in the department in the early part of the past decade (Poister, 2004). In keeping with the continuous improvement philosophy underlying the department's quality improvement program, from which the Compass evolved, the department preferred not to establish targets on these measures. This policy was based on the belief that targets can have ceiling effects and actually inhibit improvement rather than provide incentives to strengthen performance. Thus, the implicit objective is to continuously improve performance on these measures over time.

Nevertheless, the dominant approach in public and nonprofit organizations is to set targets and then measure performance in accomplishing them. How, then, are such targets established? How do managers arrive at targets of a 25 percent increase in transit ridership, a 10 percent decrease in burglaries, or a 20 percent increase in mentoring relationships with at-risk youth? There are at least five ways of approaching the issue:

1. Past trends approach.  The most common approach is to look at current performance levels on the indicators of interest, along with the past trends leading up to these current levels, and then set targets that represent some reasonable degree of improvement over current performance. Current performance levels often provide an appropriate point of departure, but in a less-than-stellar agency, they may underrepresent the possibilities, so the question to ask is, “To what degree should we be able to improve above where we are now?”
2. Forecasting approach.  Extrapolating on past trends, an agency might develop forecasting models for projecting future performance levels based on a continuation of past trends and assumptions regarding future values of key driving forces incorporated in the model, including both external, contextual factors and program delivery. The performance levels predicted by the model for future years, assuming a constant cause system, can then be used as a point of departure in setting targets representing incremental or perhaps more dramatic improvement in performance levels that the agency aspires to achieve going forward.
3. Production function approach.  This approach analyzes the service delivery process, assesses the production possibilities, and determines what level of performance can reasonably be expected, given constraints on the system. The analysis, which might be performed for subunits and then rolled up to the agency or program as a whole, should take into account any changes in resource levels, intervention strategies, treatments, program design, service delivery arrangements, or operations that might be expected to have an impact on overall productivity. This production function approach works particularly well for setting output targets to be achieved by a production process. It may be less helpful in setting appropriate targets for real outcomes when precise relationships between outputs and outcomes are not clearly understood.
4. Subunits approach.  This approach is based on analyses of differences in performance among organizational or programmatic subunits delivering the same set of services. Often there may be significant or even widespread variation in performance among regional or district offices delivering a state agency program or neighborhood units or policy precincts in a local government jurisdiction. Sometimes a “better than the best” strategy is used based on the philosophy that “if region 1 can produce results at the 95 percent level, we should be able to expect all our regions to perform at levels that equal or exceed that.” This approach, however, may result in targets that are overly ambitious for some or many of these operating units. If the analysis is able to sort out the extent to which the leading performers are more successful because they are managing the program more effectively as opposed to simply because they are working in a more benign operating environment, the agency may be able to set differential targets for the subunits that are still ambitious but more realistic.
5. Benchmarking approach.  Finally, setting appropriate targets may be informed by comparative performance data on other similar agencies or programs. Benchmarking performance against other entities, as discussed in chapter 14, can help identify norms for public service industries as well as star performers in the field, which can be helpful in setting targets for a particular program or agency. A program that finds itself performing considerably lower than other similar programs, for example, might first set targets for itself based on other programs that are somewhat higher in the rankings but not necessarily at the top, while an agency that is already in the top quartile might set targets that approximate the performance of the leading performers in the field. A major challenge in using the benchmarking approach is to find truly comparable programs or agencies in the first place, or to make adjustments for differences in operating conditions in interpreting the performance of other entities as the basis for setting targets for a particular program or agency.

Whichever approach is used in developing SMART objectives, the intent should be to set targets that are both ambitious and realistic. Thus, agencies might be well advised to set moderately challenging targets that will motivate managers and employees to find ways to improve performance but refrain from going over the top in setting targets that are unrealistically high, in which case they would be preordaining failure. Perhaps more important, as they set targets for moderate performance improvements and then attain those target levels, they can continue to set incrementally higher targets and ratchet up meaningful performance improvements over time. Again, target setting may be partially an analytical exercise, but to do it well also requires sound judgment of the possibilities and constraints involved.

Increasingly, public and nonprofit agencies are setting target levels for desirable outcomes identified through their strategic planning processes. Particularly when an agency has a wide variety of programs to manage, summarizing expected results and associated targets helps to provide a strategic view of its portfolio of activities. Focusing on five global results areas in its strategic planning process, the United Way of Metropolitan Atlanta established five major goals concerning healthy babies, access to primary health care, financial self-sufficiency, education, and homelessness for 2014 with targets identified for each as follows:

• Increase the number of babies that are born healthy by 10 percent.
• Reduce the number of preventable emergency room visits by eighty-four thousand.
• Improve the income and financial self-sufficiency of ninety-five thousand families.
• Increase the number of adults with college degrees or comparable credentialing by 5 percent.
• To reduce the homeless population by 4,700 individuals.

Setting these proportional targets was based in part on making incremental improvements in baseline conditions in these areas in addition to assessments of the extent to which the United Way would be able to mobilize community-wide resources to combat these problems. The United Way developed sets of strategies for accomplishing each of the five goals, along with both output and outcome measures to monitor progress in advancing the strategies and achieving the goals, as discussed further in chapter 8.

Service Standards

Complicating the lexicon surrounding goals, objectives, and targets is the term standards. The term standards is often used interchangeably with targets, but to some people, standards refer to more routine performance expectations that are fairly constant over time, whereas targets may be changed more frequently as actual and potential trends change over time. Performance standards, then, tend to relate to programmatic or agency outcomes, whereas service standards refer more often to service delivery processes.

Service standards are specific performance criteria intended to be attained on an ongoing basis. They usually refer to characteristics of the service delivery process, service quality, or productivity in producing outputs. In some cases, service standards are distinct from a program's objectives, but probably more often, service standards and objectives are synonymous or closely related. In any case, if there is not a clear sense about what a program's mission, goals, objectives, and perhaps service standards are, it is important to clarify them before attempting to identify meaningful measures of its performance.

The mission of a state government's office supply support service, for example, might be framed as meeting the needs of all state agencies, school districts, and local government jurisdictions for office supplies and other materials on a timely basis. At a particular point in time, its principal goals might be to improve service quality and maintain or increase its market share in a competitive business environment. A supporting objective of the latter goal might be to increase the number of customer orders coming in to the central supply warehouse by 10 percent over the next year. With respect to the goal concerned with “growing the business” further, the program may have established the following kinds of service standards:

• To deliver all shipments within three working days of receipt of orders
• To fill at least 95 percent of all orders completely in the first shipment (with no items on back order)
• To fill at least 99 percent of all orders correctly in the first shipment

A related productivity standard might be to ship twenty product lines per employee per hour.

These standards might be considered the objectives of the program, or there might be other objectives, such as increasing the percentage of customers indicating on response cards that they were satisfied with the service they received to 85 percent during the next year. Alternatively, if the program has only been achieving a “fill rate” of 80 percent, a key objective may be to raise it to 90 percent during the next year and achieve the standard of 95 percent by the following year. Understanding what a program is supposed to accomplish through clarifying mission, goals, objectives, service or performance standards, and targets, however they are configured, can help tremendously in identifying critical performance measures.

Table 4.3 illustrates service standards for a number of public services. Rather than setting performance targets regarding outcomes, these service standards all focus on service delivery, the production of outputs, service quality, or levels of service. For example, the sexually transmitted disease prevention program funded by the US Centers for Disease Control has a service standard that calls for interviewing partners of individuals diagnosed with primary or secondary syphilis within fourteen days of the client's identification of these partners. Similarly, the disability adjudication process funded by the US Social Security Administration states that claims for disability benefits should be adjudicated within seventy working days of receiving a claim.

Table 4.3  Illustrative Service Standards

Program	Service Standard
Sexually transmitted disease control	Interview identified partners of clients with primary or secondary syphilis within 14 days
Highway resurfacing	Maintain National Highway System roads to below 120 on the International Roughness Index
Nursing regulation	Complete investigations of reported violations within 180 working days
Child support enforcement	Return telephone inquiries from custodial parents within 24 hours
Disability determination	Adjudicate all claims within 70 working days from receipt of a fully documented claim
Foster care	Limit the number of placements of children in their first year in foster care to no more than 2
Public transit service	All transit vehicles to arrive at designated bus stops within plus or minus 3 minutes of scheduled arrival times
Vocational rehabilitation	Complete an on-the-job evaluation within 4 weeks of clients beginning a new job
Driver licensing	Process license renewals within 20 minutes of when customers enter drivers' license centers

Some service standards focus on service quality rather than timeliness. For instance, a state highway maintenance program may set a standard for ride quality that calls for maintaining all of its roads on the National Highway System at a roughness level at or below 120 on the international roughness index, while a local public transit system may work hard to adhere to a service standard calling for buses to arrive at all regular bus stops within plus or minus three minutes of scheduled arrival times. Similarly, an after-care program run by a state's juvenile justice program may have a policy that caseworkers or counselors should have weekly face-to-face meetings with all juveniles discharged from juvenile boot camps during the first six months after the date of discharge, an output-oriented service standard.

Frequently public agencies establish targets for adherence to service standards, especially when they are failing to do so successfully, but are motivated to improve performance in those areas. For example, a state transportation department may have a service standard calling for highway capacity on major interregional corridors to be sufficient so that traffic can move at the posted speed limit, but its performance monitoring indicates that it is meeting this standard on only 55 percent of the mileage on those interregional roads. In an effort to improve its performance on this standard, it establishes a target that calls for increasing the percentage of that road mileage on which traffic does move at the posted speed limit up to 65 percent by the end of the following fiscal year and up to 75 percent over the next three fiscal years.

Consider a state juvenile justice after-care program whose performance monitoring reveals that only 40 percent of the juveniles discharged from boot camps within the past six months are being contacted at least once per week by program staff, the service standard that has been established for the program. This may lead the program to establish a target to the effect that at least 50 percent of juveniles who have been discharged from boot camp in the past six months will in fact be contacted by their case manager or other appropriate program staff weekly over the next fiscal year.

Programmatic versus Managerial Goals and Objectives

To be useful, performance measures should focus on whatever kinds of results managers want to accomplish. From a purist program evaluation–based perspective, appropriate measures are usually seen as focusing on programmatic goals and objectives, the real outcomes produced by programs and organizations out in the field. However, from a practical managerial perspective, performance measures focusing on implementation goals and the production of outputs are often equally important. Thus, public and nonprofit organizations often combine programmatic or outcome-based goals and objectives along with more managerial or output-based goals and objectives in the same management systems.

Both programmatic and managerial objectives should be stated as SMART objectives and tracked with appropriate performance measures. For example, the programmatic objectives of a community crime prevention program might be to reduce personal crimes by 20 percent and property crimes by 25 percent in one year, along with the goal of having at least 90 percent of all residents feeling safe and secure in their own neighborhoods. These outcomes could be monitored with basic reported crime statistics and an annual neighborhood-based survey. More managerial objectives might include the initial implementation of community policing activities within the first six months and the startup of at least twenty-five neighborhood watch groups within the first year. These outputs could be tracked through internal reporting systems.

All governmental jurisdictions maintain workers' compensation programs to ensure that employees who are injured in the course of their work are provided with appropriate medical treatment and, if necessary, rehabilitation services, time off from work, and other benefits as required by law. Figure 4.2 illustrates the underlying logic of a state government's workers' compensation program, which, in addition to claims processing, promotes safety in the workplace and emphasizes injured employees' return to work as soon as practicable. From the state's point of view, the critical outcomes are that employees recover from their injuries and return to their work sites and regular jobs so that lost workdays and operational disruptions are minimized. From injured employees' perspective, the critical outcomes are not only that they recover from their injuries and return to work, but also that financial support is provided if extended or even permanent absences from work are necessary.

Figure 4.2  State Workers' Compensation Program Logic Model

Table 4.4 shows the goals, service standards, and targets that have been developed for this program. Of particular interest here are the targets. Whereas the goals are appropriately more general and the service standards are routine in a way, the objectives call for specific changes in performance levels, for instance, to reduce the number of late claim filings (output quality) by 30 percent from the previous year or to reduce the total cost of workers' compensation claims (operating efficiency) by 15 percent from the previous year. One objective focuses on managing workload by closing at least as many claims each month as the number of new cases opened, while the last one focuses on a key measure of effectiveness, reducing the number of lost time days by at least 15 percent from last year through the implementation of an aggressive return to work program.

Table 4.4  Service Standards and Management Objectives: Workers Compensation Program

Program Goals	Service Standards	Management Objectives
To promote safety programs in state government and assist state agencies in their efforts to prevent on-the-job employee injuries To provide for proper and timely processing of workers' compensation claims in order to ensure that injured employees receive appropriate medical treatments, rehabilitation services, and other benefits as required by law To implement a return-to-work program in order to facilitate the return of injured employees to productive work in their agencies as practically possible	To file WC-1 reports (first reports of injuries) for all lost time claims to the State Workers' Compensation Board within 21 days of the date the employer becomes aware of the injuries To pay all workers' compensation lost time benefits that are approved within 21 days of the date the employer becomes aware of injuries To pay all medical bills associated with workers' compensation claims within 60 days of receipt of acceptable invoices	To reduce the number of late WC-1 filings by 30 percent from last year To close at least as many claims each month as the number of new cases created in order to maintain or improve on the current backlog of cases To contract with a managed care organization in order to reduce the total cost of workers' compensation claims by 15 percent from last year To implement an aggressive return-to-work program in order to reduce lost time days by 15 percent annually

Given current performance levels in this particular agency, all four of these objectives are considered to be ambitious yet realistic, and they are all SMART objectives in terms of specifying the nature and magnitude of expected results within a particular time period. In addition, straightforward performance indicators can be readily operationalized for each of these objectives, along with the service standards, and collectively they will provide management with a clear picture of the overall performance of this workers' compensation program.

Public and Nonprofit Goal Structures

As indicated earlier in this chapter and as will be further discussed in chapter 8, public and nonprofit organizations frequently elaborate goal structures with lower-level goals supporting higher-level goals. For example, an agency might have identified strategic goals supported by programmatic goals, which in turn are linked to critical and secondary objectives. Alternatively, it may establish organization-wide goals that are linked through supporting division goals down through the structure to office goals, branch goals, section goals, and work unit goals and ultimately to goals for individual managers or employees to achieve. But the question still remains as to the substantive concerns these goal structures address.

Clearly one useful framework for identifying appropriate goals and objectives is the kind of program logic models and associated performance measures discussed in chapter 3. Public and nonprofit organizations frequently set goals for increasing or improving the quality of outputs produced by a particular program, and they also set goals focusing on increasing the volume of outcomes or altering characteristics of outcomes produced, as well as changing the mix of outcomes produced by a program. Similarly, goals might be established for improving the quality of products or services delivered by a program or increasing the efficiency and productivity of service delivery processes, and other goals might be established for increasing customer satisfaction with the services they receive from the program or the outcomes they experience as a result of participating in a program or receiving services from a program. In addition, goals might be defined in terms of the priority populations or target groups to be reached by the program.

However, performance management systems often focus on an organization's performance rather than that of particular operating programs. Some public organizations have full responsibility for a single program, while others, particularly larger department-level agencies, are responsible for multiple programs and services, and agencies may also share responsibility for some programs with other agencies. In any case, the goals that are important to an agency almost always include some that are directly related to programs, but the agencies are also likely to have other organizational or nonmission-oriented goals concerning development, management capacity, technology, external support, and so forth as well. In their book on the balanced scorecard as a framework for strategic planning, as discussed in chapter 8, Kaplan and Norton (1996) proposed that private firms should be establishing goals and attendant performance measures not only from the perspective of financial performance or the bottom line, but also goals with respect to customers, business processes, and learning and growth.

Many organizations in the public sector have developed their own balanced scorecards, and most adopt the same four perspectives—financial, customer, internal processes, and learning and growth—although they tend to identify the customer or citizen perspective as the most important goals and establish goals in the other three perspectives to support achievement of those customer- or citizen-oriented goals (Niven, 2003). In a similar vein, Boyne and Walker (2004) identified five “action areas” that constitute strategy content in the public sector—markets, services, revenues, internal organization, and external organization—and this model also provides a useful framework for goal setting in the public sector.

Similar kinds of performance frameworks have been developed for the nonprofit sector focusing on such perspectives as social mission achievement, program effectiveness, and participant-centered outcomes in addition to organization and management capacity and external support (Moore, 2003; Sowa, Selden, & Sandfort, 2004; Urban Institute, 2006). However, public and nonprofit organizations tend to differ significantly with respect to emphasis on goals and performance measures focusing on institutional support and revenues. While some public organizations such as toll roads, public utilities, and regulatory agencies earning revenue through fees collected often place substantial emphasis on goals and performance measures concerning revenues, particularly those that operate in competitive markets such as public transit agencies, in most public agencies financial resources are thought of as a given from dedicated revenue sources or budget allocations, falling on the input side of the performance framework rather than as results. Thus, as discussed in chapter 3, resource measures are typically used in computing efficiency, productivity, and cost-effectiveness measures but are not often considered as performance measures in their own right. However, as self-created entities rather than government agencies with semiguaranteed financial revenues, nonprofit organizations must of necessity secure their own revenue—from members or regular contributors, charitable donors, and government grants or contracts in addition to paying customers—in order to ensure their continued ability to pursue their social missions. Thus, institutional support, and especially revenue and resources, tend to figure much more prominently in the goals and performance measures set by nonprofit organizations as compared with public agencies.

Goals, Objectives, and Measures

Obviously managers need to forge close linkages between goals and objectives, on one hand, and performance measures, on the other. It is critical to monitor measures of performance in terms of accomplishing outcome-oriented, programmatic objectives, but often it is important to track measures focused on the achievement of more managerially oriented objectives as well. In some instances, goals and objectives are stated in terms of the general kinds of results intended to be produced by programmatic activity, and then performance indicators must be developed to track their achievement. In other cases, however, the objectives themselves are defined in terms of the measures that will be used to track results.

Sometimes performance standards or service standards are established and tracked independently, while at other times, objectives or targets are set in terms of improving performance on those standards. Although there is not one right way to do it, the bottom line for results-oriented managers is to clearly define intended results through some mix of goals, objectives, standards, and targets and then track performance measures that are as closely aligned as possible with these results.

References

1. Boyne, G. A., & Walker, R. M. (2004). Strategy content and public service organizations. Journal of Public Administration Research & Theory, 14(2), 231–252.
2. Broom, C., Harris, J., Jackson, M., & M. Marshall. (1998). Performance measurement concepts and techniques. Washington, DC: American Society for Public Administration/Center for Accountability and Performance.
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4. Kaplan, R. S., & Norton, D. P. (1996). The balanced scorecard: Translating strategy into action. Cambridge, MA: Harvard University Press.
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6. Moore, M. H. (2003). The public value scorecard: A rejoinder and an alternative to strategic performance measurement and management in non-profit organizations (Working Paper 18). Cambridge, MA: Hauser Center for Nonprofit Organizations, Harvard University.
7. Niven, P. R. (2003). Balanced scorecard step-by-step for government and nonprofit agencies. Hoboken, NJ: Wiley.
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9. Sowa, J. E., Selden, S. A., & Sandfort, J. R. (2004). No longer unmeasureable? A multidimensional integrated model of nonprofit organizational performance. Nonprofit and Voluntary Sector Quarterly, 33, 711–728.
10. Transportation Research Board. (2001). Performance measures to improve transportation systems and agency operations: Conference proceedings. Washington, DC: Transportation Research Board.
11. Urban Institute. (2006). Building a common outcome framework to measure nonprofit performance. Washington, DC: Urban Institute.
12. US Department of Health and Human Services. (2012). Fiscal year 2013 annual performance report and performance plan. http://www.hhs.gov/budget/performance-appendix-fy2013.pdf