Performance management, the process of consistently reviewing performance data to inform decision-making, is a strategy emerging in cities across the country. Performance management practices and tools enable cities to:  make informed program and process improvements; spend scarce budget resources wisely; and ensure that the community’s needs are being prioritized.

Although anecdotally we know that performance management holds promise and produces results, little is known about how performance management programs are operating at the local level. To this end, NLC studied existing performance management systems in ten (10) U.S. cities through staff interviews and surveys.

The study reveals that while performance management has been adapted to the unique circumstances within each city, there are key components common to all systems. “Performance Management: A Guide for City Leaders” identifies those key components and discusses the various adaptations within the selected cities.  The experiences of city staff members involved in the implementation of performance management processes are also analyzed and strategies are outlined for those cities interested in pursuing a more data-driven approach.

Specifically, the report sheds light on:

  • Performance management office structures
  • Staff skills needed to effect performance management
  • Methods to cultivate buy-in across city departments

We also explore the basics of performance management:

  • Data collection and setting performance targets
  • Data analysis and informed decision-making

The selected cities provided guidance on how to track metrics that accurately measure the performance of city services and how to use performance management to make critical decisions about the management and financing of city services.

This report also provides an example of predictive analytics to indicate how the future of performance management is evolving. This emerging practice holds the potential to make city services even more effective by empowering performance management teams to proactively pinpoint potential problem areas and intervene before problems become costly and time-consuming to fix.

We conclude with recommendations for city leaders to champion these efforts in their communities. An executive-level champion is a primary factor, and often the impetus, for effective performance management and is critical to infusing and sustaining a culture of performance in the city government.

Though many cities across the nation are still reeling from post-recession realities of decreased city revenues, limited intergovernmental aid, and smaller municipal workforces, there is increasing public pressure for governmental leaders to leverage new technologies in make the inner workings of municipal government more accountable and transparent. Within this governing environment, the value of making data-driven decisions is greater than ever and, with the help of this guide, also more attainable.

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