CARDS 2003 program: Decentralization and reorganization of the Croatian Employment Service (CES)
Proposal for EU compatible Performance Standards for Croatian Employment Service
Evangelos Bountalis
March, 2007
TABLE OF CONTENTS
- INTRODUCTION3
- DEFINITIONS 4
- PROPOSAL OF EU COMPATIBLE PERFORMANCE
STANDARDS FOR CES 8
3.1.EU Employment Guidelines 8
3.2Guidelines for the Employment Policies of the member
States 8
3.3Targets and benchmarks set in EES 15
3.4Public Sector PM Systems, Standards & Indicators 16
3.5Proposal for EU compatible PS and Indicators 20
- ANNEX I : GUILINES FOR THE EMPLOYMENT
POLICIES OF EU MEMBER STATES 25
1. INTRODUCTION
The current deliverable is related to activity 4 “Performance Management” and more precisely activity 4.1 “Define performance Standards in accordance with EU criteria” and aims at introducing an EU compatible set of Performance Standards for CES central and regional offices.
The main purpose of the deliverable is to propose concrete and clear-cut performance standards for the Regional and Central offices of Croatian Employemnt Service in order to measure the successful realization of its goals and objectives.
The specific objectives were :
- The introduction amd familiarization with the concepts and ideas compatible with the EU guidelines perfrormance Standards aiming at the achievement of common objectives and goals.
- To introduce the EU best practices on perfrormance standards and performance indicators and their applicability to CES every day activities
- To propose a set of Performance standards foe CES central and Regional Offices
The methodology of the current deliverable was the following:
Review of relevant documents and deliverables
Site review and analysis
Consultation through meetings with the central and regional offices
Interviews with key personnel of central and regional offices.
The work shop on Performance Measurement
In the following parts of the deliverable, the basic ideas and composing concepts of a compatible set of performance standards for the Regional and cental offices of CES are introduced.
- DEFINITIONS
In both policy planning and strategic planning,accountability is built in by identifying what performance standards and indicators will be used to measure progresstoward the accomplishment of goals and objectives. Operation plans, which are guided by andlinked to strategic plans, set annual objectives and propose performance standards for theperformance indicators and targets related to those objectives.
Performance measurement on the other hand, compares actual results with expected results, both strategic andoperational. In this way, progress toward goals is evaluated.
To measure and track performance, it is necessary to:
identify and select balanced sets of performance indicators to measure progress towarddefined outcomes.
organize to gather performance information
monitor and track performance on a regular basis.
2.1Performance Standard
A performance standard is the expected level of performance associated with a particular performance indicator for a particular period and funding level. Performance standards represent the level of performance to be achieved during the a period of time. In effect, performance standards are commitments for service; they identify the level of performance associated with the achievement of objectives and goals of the organization. Actual program performance is compared against performance standards as part of the performance progress reporting process.
2.2Development of Performance Standards
Performance standards are derived from performance indicators, the tools used to measure the performance of programs. Performance indicators consist of two parts:
indicator name which describes what you are measuring and
indicator value which is the numeric value or level achieved within a given measurement period
Performance standards are developed through the following phases:
i. Strategic Plan (identification, selection, and documentationof performance indicators to be used to measure progress). Accountability begins with and is built into the strategic planning process. As goals and objectives are established, a balanced set of performance indicators is identified, selected, and validated. Performance indicators must be identified, selected, and validated in accordance with the guidelines established by the Administration.
ii.Operational Plan (reporting of performance indicators). Strategic plans are annualized through the operational planning and budgeting process. Program goals, objectives, and performance indicators are reported in the operational plan and other budget forms, in accordance with the guidelines established by tha Administration.
iii.Program Narrative (identification of performance indicator values at funding level recommended in the executive budget). Development of proposed performance standards begins with the calculation and reporting by budget units of projected program performance at the operating budget level recommended by the governor in the executive budget.
iv.Executive Budget and Executive Budget Supporting Document (reporting of performance indicator values at the funding level recommended in the executive budget). Program performance indicators are included in both the executive budget (at the key indicator level) and executive budget supporting document (key and supporting performance indicators).
v.Appropriation Bills (inclusion of key performance indicator names and values as proposed performance standards). Key performance indicators for each activity are included in the general appropriation bills. These key indicators consist of the performance indicator name and the performance indicator value at the funding level proposed in the bill. The performance indicator values shown in an appropriation bill represent proposed performance standards.
vi.Appropriation Acts (establishment of performance standards). Performance standards proposed in the executive budget, executive budget support document, and appropriation bills become performance standards at the conclusion of the appropriation process. Key performance standards are the performance indicator values that appear in the general and ancillary appropriation acts.
2.3Types of Performance Indicators
In management processes five types of indicators to measure performance are utilized:
input,
output,
outcome,
efficiency,
quality.
These indicators are based on systems logic (how aprocess works) and each type is designed to answer a different question or provide a differentperspective regarding performance. Together, these indicators provide a balanced view ofperformance.
Input indicators measure resource allocation and demand for services. They identify theresources needed to provide a particular service. Inputs include labor, materials, equipment,facilities, and supplies. They can represent demand factors such as characteristics of targetpopulations. Input indicators are useful in showing the demand for a service, the total cost ofproviding a service, and the mix of resources used to provide a service. Input indicators are oftenpaired with output and outcome indicators to develop an input/output comparison.
Output indicators measure quantity. They measure the amount of products or servicesprovided or number of customers served. Output indicators are volume-driven. They focus onthe level of activity in providing a particular program. Transaction numbers and workloadmeasures, which are designed to show how staff time is allocated to respond to service demand,are most commonly reported. However, output indicators are limited because they do not indicate whether program goals andobjectives have been accomplished; nor do they reveal anything about the quality or efficiency ofthe service provided.
Outcome indicators measure success. They measure results and assess program impact andeffectiveness. Outcome indicators are the most important performance measures because theyshow whether or not expected results are being achieved. Policy makers are generally mostinterested in outcome indicators.
Efficiency indicators measure productivity and cost-effectiveness. They may reflect the costof providing services or achieving results. Cost can be expressed in terms of dollars or time perunit of output (or outcome). Efficiency measures can also portray the relationship of inputsoutputs (or outcomes). They can show workloads or caseloads. Efficiency indicators can gaugethe timeliness of services provided. Efficiency measures are important for management andevaluation. They help organizations improve service delivery. Often they are used to justifyequipment acquisitions or changes to systems or processes.
Quality indicators measure excellence. They reflect effectiveness in meeting the expectationsof customers, stakeholders, and expectation groups. Measures of quality include reliability,accuracy, courtesy, competence, responsiveness, and completeness associated with the product orservice provided. Lack of quality costs money. It is important to track resources devoted toperforming rework, correcting errors, or resolving customer complaints. Quality measures areoften considered to be outcomes. However, quality indicators have been separately defined toreflect the importance of quality improvement.
Sometimes performance indicators fall into more than one category.
It is important to develop a balanced set of meaningful indicators to measure progress. However, at least one indicator of outcome, efficiency, or quality as well as indicators of input and output are necessary and relevant in order to provide a clear view of progress toward an objective.
Explanatory notes may accompany performance indicators. They establish context and fill inbackground. Explanatory notes identify input variables, program variables, and external variablesand explain how those variables affect performance. They provide a link among indicators thatshould be used in tandem. In strategic planning, most explanatory notes appear on performanceindicator validation documentation. Explanatory footnotes frequently are supplied as part of theoperational planning and budgeting process to explain performance indicator values; Andcomments explaining differences between actual and anticipated performance are common inperformance progress reports.
2.4Characteristics of Valuable Performance Indicators
Valuable performance indicators are:
Meaningful. They are significant and relate directly to mission, goals, and objectives.
Responsibility-linked. They are matched to an organizational unit responsible forachieving the goal, objective, or performance standard. They are selected jointly by thosewho will judge performance and those who will be held accountable.
Organizationally acceptable. They are valued by people within the organization. Theyare used for internal management as well as policy and budget decision making.
Balanced. They include as few or as many different types of indicators as are appropriateto provide a clear picture of performance.
Clear and simple. They should be unambiguous and can be understood easily. They arecalculated and presented in a straightforward, uncomplicated manner. Professional ortechnical terms, acronyms, and jargon, as well as general terms such as "poverty,""disadvantaged," and "substandard," and "at risk," are defined when used in relation toperformance indicators. This avoids misinterpretation. They use standard statistical orquantitative methods for calculation (or have clear explanations of nonstandardcalculations) and are illustrated with tables, charts, or graphs that are easy to interpret.
Comparable. They include both internal and external comparisons. They compare theprogram's current performance with performance in previous years; they compare theprogram with similar programs operated in other states or the private sector.
Credible. They are based on accurate and reliable data. They stand up to audit.
Cost-effective. They have acceptable data collection and processing costs.
Compatible. They are integrated with existing management processes systems.
3.PROPOSAL OF EU COMPATIBLE PERFORMANCE STANDARDS FOR CES
3.1EU Employment Guidelines: GUIDELINES (2005 to 2008)[1]
Guideline No 17: Implement employment policies aiming at achieving full employment, improving quality andproductivity at work, and strengthening social and territorial cohesion
Guideline No 18: Promote a lifecycle approach to work
Guideline No 19: Ensure inclusive labour markets, enhance work attractiveness, and make work pay for job-seekers,including disadvantaged people, and the inactive
Guideline No 20: Improve matching of labour market needs
Guideline No 21: Promote flexibility combined with employment security and reduce labour market segmentation,having due regard to the role of the social partners
Guideline No 22: Ensure employment-friendly labour cost developments and wage-setting mechanisms
Guideline No 23: Expand and improve investment in human capital
Guideline No 24: Adapt education and training systems in response to new competence requirements
3.2Guidelines for the employment policies of the Member States
Member States, in cooperation with the social partners, shall conduct their policies with a view to implementing theobjectives and priorities for action specified below. Reflecting the Lisbon strategy, the Member States' policies shall fosterin a balanced manner:
Full employment:Achieving full employment, and reducing unemployment and inactivity, by increasing the demandfor and supply of labour, is vital to sustain economic growth and reinforce social cohesion.
Improving quality and productivity at work:Efforts to raise employment rates go hand in hand with improving theattractiveness of jobs, quality at work and labour productivity growth, and reducing the share of working poor.
Synergies between quality at work, productivity and employment should be fully exploited.
Strengthening social and territorial cohesion:Determined action is needed to strengthen social inclusion, preventexclusion from the labour market and support integration in employment of people at a disadvantage, and toreduce regional disparities in terms of employment, unemployment and labour productivity, especially in regionslagging behind.
Equal opportunities and combating discrimination are essential for progress. Gender mainstreaming and the promotion ofgender equality should be ensured in all action taken. As part of a new intergenerational approach, particular attentionshould be paid to the situation of young people, implementing the European Youth Pact, and to promoting access toemployment throughout working life. Particular attention must also be paid to significantly reducing employment gapsfor people at a disadvantage, including disabled people, as well as between third-country nationals and EU citizens, in linewith any national targets.
In taking action, Member States should ensure good governance of employment policies. They should establish a broadpartnership for change by involving parliamentary bodies and stakeholders, including those at regional and local levels.
European and national social partners should play a central role. A number of targets and benchmarks which have beenset at EU level in the framework of the European Employment Strategy in the context of the 2003 guidelines are includedat the end of this Annex and should continue to be followed up with indicators and scoreboards. Member States are alsoencouraged to define their own commitments and targets, for which they should take these into account, as well as the2004 recommendations agreed at EU level.
Good governance also requires greater efficiency in the allocation of administrative and financial resources. In agreementwith the Commission, Member States should target the resources of the Structural Funds, in particular the EuropeanSocial Fund, on the implementation of the European Employment Strategy and report on the action taken. Particularattention should be paid to strengthening institutional and administrative capacity in the Member States.
In addressing these objectives, action should concentrate on the following priorities:
attract and retain more people in employment, increase labour supply and modernise social protection systems,
improve adaptability of workers and enterprises,
increase investment in human capital through better education and skills.
I. ATTRACT AND RETAIN MORE PEOPLE IN EMPLOYMENT, INCREASE LABOUR SUPPLY AND MODERNISE SOCIALPROTECTION SYSTEMS
Raising employment levels is the most effective means of generating economic growth and promoting socially inclusiveeconomies whilst ensuring a safety net for those unable to work. Promoting an increased labour supply in all groups, anew lifecycle approach to work and modernising social protection systems to ensure their adequacy, financial sustainabilityand responsiveness to changing needs in society are all the more necessary because of the expected decline in theworking-age population. Special attention should be paid to tackling the persistent employment gaps between womenand men, and the low employment rates of older workers and young people, as part of new intergenerational approach.
Action is also required to tackle youth unemployment which is on average double the overall unemployment rate. The
right conditions must be put in place to facilitate progress in employment, whether it is first time entry, a move back toemployment after a break or the wish to prolong working lives. The quality of jobs, including pay and benefits, workingconditions, employment security, access to lifelong learning and career prospects, is crucial, as are support and incentivesstemming from social protection systems.
Facilitating access to employment for job seekers, preventing unemployment and ensuring that those who becomeunemployed remain closely attached to the labour market and increase their employability are essential to increaseparticipation and combat social exclusion. This requires breaking down barriers to the labour market by assisting witheffective job searching, facilitating access to training and other active labour market measures and ensuring that workpays, as well as removing unemployment, poverty and inactivity traps. Special attention should be paid to promoting theinclusion of disadvantaged people, including low-skilled workers, in the labour market, including through the expansionof social services and the social economy, as well as the development of new sources of jobs in response to collectiveneeds. Combating discrimination, promoting access to employment for disabled people and integrating immigrants andminorities are particularly essential.
To allow more people to find better employment, it is also necessary to strengthen the labour market infrastructure atnational and EU level, including through the EURES network, so as to better anticipate and resolve possible mismatches.
In this context, mobility of workers within the EU is key and should be fully ensured within the context of the Treaties.
Full consideration must also be given on the national labour markets to the additional labour supply resulting fromimmigration of third-country nationals.