Performance Management and Measurement: Balanced scorecard and other tools

1. Performance Management and Measurement: Balanced scorecard and other tools David Akopyan OPB/BOM October 2007

2. Way forwardproposals under discussion in the context of of Strategic Plan and Enhanced Results Based Management project.1. Performance Management/ Measurement and RBB;2. PM in 2007: BSC new indicators,3. Recent BSC usage survey4. Way forward for Performance management – options Strategic/ operational BSC – September 2007 workshop in NY.

3. Why performance management system? • “Less than 10% of strategies effectively formulated are effectively executed. For majority of failures it isn’t bad strategy -it’s bad execution.” Fortune magazine • If you want your organization to focus on strategy, make sure that your management systems are designed to manage strategy. D Norton

4. PERFORMANCE MANAGEMENT SYSTEM • Targets and indicators - linked to results and objectives,measurable and well defined – clear for monitoring and reporting –also hierarchy and links; • The business units/owners - to define, plan, target, report and held accountable; • The systems and toolsfor measure, monitor and report. • Data integration and the linkages among: corporate, regional, functional units and country offices.

5. Performance Management System for Strategic Plan Results Reporting LMS Strategic Plan: Drive for Results Lyris CARDS Balanced Scorecard, CO scans, Executive snapshot Communications Office DB Snapshot Surveys: GSS Partners survey HQPSS ATLAS

6. Performance Monitoring Architecture Development Results Report to Executive Board UN Coordination Results Management Results Corporate Level BCPR BSC BKK RC BSC Angola CO BSC Corporate BSC Stakeholder External Relations Process & Capabilities Organisation & Culture Stakeholder External Relations Process & Capabilities Organisation & Culture Stakeholder External Relations Process & Capabilities Organisation & Culture Stakeholder External Relations Process & Capabilities Organisation & Culture Unit Level / Strategic BKK RC Unit Work Plan Function X Results ----- $ XXX Results ----- $ YYY Angola Unit Work Plan Function X Results ----- $ XXX Results ----- $ YYY BCPR Unit Work Plan Function X Results ----- $ XXX Results ----- $ YYY Unit Level / Operational 5 Key Results Leaning Plan 5 Key Results Leaning Plan 5 Key Results Leaning Plan 5 Key Results Leaning Plan 5 Key Results Leaning Plan 5 Key Results Leaning Plan 5 Key Results Leaning Plan Individual Level

7. Cascading Down Performance Management Structure Report to the ExB Strategic Plan 2008-2011 Results Strategy / Goals

8. Performance Monitoring & Assessment Indicators, targets, and baseline data are derived from the unit Work plan. 1 Result Indic’sPerformanceExpenditure Target Baseline Actual Planned Actual F1$ $ RBB-MR1 Indic1 75% Indic2 100% RBB-MR2 Indic3 75% F3 $ $ RBB-MR5 Indic4 95% Indic5 50% Actual performance is measured using multiple data sources depending on the specific indicator. 2 Planned expenditure retrieved from ATLAS budget allocation. 3 Actual expenditure retrieved from ATLAS Finance. 4 2 3 4 1 Multiple Sources (Snapshot, ATLAS, LMS, Excel etc) RBB-MR1 $ F1 RBB-MR2 $ F1 RBB-MR5 $ F3 $ spent F1 $ spent F3 F1 $budgeted F3 $ budgeted Budget Allocation ATLAS PBM Financial ExpenditureATLAS PM UNIT Work Plan

9. ERBM System Design - Proposal More Comprehensive selection of indicators Selected objectives and indicators from Strategic Plan Partners Survey Trend Partners Survey Partners Survey (Efficiency Qs) Add Data Financial Data BSC & Unit Work Plan Results Development Data Operational Data Corporate 2008-11 Angola CO Balanced Scorecard “Strategic View / Choices”(Strategic BSC) Unit (CO/RC/HQ unit) 2008 RBB / Unit Work Plan Results Individual (RCA) “Management View” BSC for RBB Customized Data Remove Data

10. 5th Perspective Programme Quality 1. Client SatisfactionTo achieve our goal, how should we appear t our clients? 2. Internal Efficiency To satisfy our clients, what business processes must we excel at? Vision & Strategy 3. Learning & Growth To satisfy our goal, how will we sustain our ability to improve? 4. Financial Resources To satisfy our goal, how should we operate financiallY? Balanced Scorecard? - Management System translating vision and strategy into action and: a) to drive the change process and b) to align organization behind the strategy. UNDP Balanced Scorecard • In Each Perspective: • Strategic Objectives • Targets • Results

11. BSC new indicators in 2007

12. Sound Project Management and Monitoring in Atlas

13. NEX Audit management

14. Security and MOSS compliance

15. Website Updated and Reflects Key UNDP Priorities

16. Balance Scorecard Usage survey Survey covered all RRs and DRRs - 85 responses Opinions on BSC: • It is an excellent monitoring tool but is used as a "stick with no carrot" • Despite of some feebleness, BSC is very interesting tool for management and strategic planning • Regional Bureaux do not use the tool to work with COs but rather just to grade them • Focus is correct, but not all indicators strategic

17. Choices - Strategic/operational, Development/management • Need more focus on strategic positioning and programme results. • It must evolve with changing organizational priorities and align with the Strategic Plan • Should include more elements on programmatic results and impact. • Important to have some bird's eye view on several strategic issues. • Is perceived as a mechanism to control the management and staff performance and not tied to the strategic goals and objectives. • The BSC designed by accountants, and accountants are usually not put in charge of strategy . • Emphasis is needed on development results. But perhaps there needs to be two separate scorecards? • Management side has made a lot of progress but not strategic. • BSC transforms strategic planning from an academic exercise into the nerve center of an organization.