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TEXAS – Balanced Measures

A budgetary crisis in the late 1980's forced Texas to examine ways to allocate resources more effectively and efficiently and prompted the passage of a statute that mandated agency and statewide strategic planning and performance measurement. Further, the State's sustained motivation comes from a desire by policy makers who recognize the need for performance information for decision making and accountability purposes.

In Texas, this motivation has been translated into a very mature process that integrates performance measures into the decision making process. The basic components of the system were developed concurrently in the early 1990s into a complete, interconnected system. The result of this long-term effort is a comprehensive system of strategic planning, performance measurement, performance-based budgeting, and performance reporting, monitoring, assessment and auditing. Though the system is considered mature given extended time in which it has existed as a complete system, it continues to evolve. Interim reviews and evaluations conducted by the Governor, Legislature, and State Auditor as well as other efforts to build upon and refine the system (e.g. the addition of benchmarking, customer satisfaction assessment, management training, and activity-based costing components) contribute to this evolution.

The performance measures are developed as part of the biennial strategic planning and budgeting process, and they are set and negotiated through a formal, though highly participatory, process. Texas is committed to improving the measures over time to ensure that the information needed by decision makers is available.

The performance measures cover the full range of financial and non-financial categories of operational performance, including bond ratings, return on investment, productivity/efficiency, internal processes, customer satisfaction, employee feedback through the Survey of Organizational Excellence conducted by the University of Texas, citizen perspectives and feedback, improvement and innovation, strategic direction through the Governor's Statewide Strategic Plan (i.e. Vision Texas), and public safety, health and environment and other functional areas of government through the Vision Texas document.

Texas has 8,900+ measures in the following four categories:

Texas' use of performance information is the core of a system-wide commitment to innovation and improvement which is highlighted by several Texas-specific efforts including the Governor's Center for Management Development - a state training and education initiative for senior and middle level managers, the Council on Competitive Government - looking at privatization opportunities, and the Incentive and Productivity Commission - providing cash payments to employees for cost saving ideas. The State's improvement efforts also include business process reengineering, total quality management, activity-based costing, investment budgeting, benchmarking, and participation in performance measurement consortiums.

This commitment to continuous improvement is also applied to the performance measurement system itself. The process of developing and implementing measures is reviewed every two years. The review of the process results in revisions to the state instructions and guides for strategic plans and budget requests as well as the Guide to Performance Measurement. The process is streamlined and updated to ensure information useful for decision-making is included.

Texas operationalizes the belief that the purpose of performance measurement is to provide information for decision-making. Data from the measures is used for: strategic planning, annual agency performance plans (operating budgets require performance measures as do operational plans), resource allocations, and other major policy and operational decisions. Employee performance plans are done but there is no state requirement at this time although the Legislature is considering a Texas Performance Review recommendation to require them.

To ensure the data is readily available to all decision-makers, the budget and performance measurement system is available through an on-line system. Texas accomplishes this through an automated and integrated accounting, budgeting, and performance measurement system. Agencies enter the information on-line and the measures are reported and updated on the system quarterly.

Key to the success of Texas is the leadership that has been brought to bear on the performance measurement effort by the current and previous governors, top agency managers, and reform-minded legislators, as well as the institutional commitment to training and technical support.

Texas has identified two challenges for its future efforts:

• Refinement and integration of measures and other data into the legislative and agency decision-making processes.
• Improvement in the way State Government works with political subdivisions like counties and cities, the federal government , and subcontractors and not-for-profits, like United Way, as they manage for results.

Texas brings many best practices to performance measurement but these two stand out:

1. It is important to have the processes institutionalized and inter-connected (i.e. one element/process links to the next) and used (agencies use data to plan, allocate dollars, and manage). It has to be part of the accountability framework. Planning gives meaning to measures, which should also tie to budget. There is a synergistic effect in the linkage of efforts.
2. Sustained commitment on the part of elected officials and senior managers.

Ara Merjanian, Group Director for Planning and Development
Governor's Budget Office
Amerjanian@governor.state.tx.us
www.governor.state.tx.us

www.lbb.state.tx.us
www.sao.state.tx.us