Performance Indicators: Good, Bad, and Ugly
Authors: Bird Sheila M. , Sir David Cox , Farewell Vern T. , Harvey Goldstein , Tim Holt , Peter C. Smith 
Published: December 2004

A striking feature of UK public services in the 1990s was the rise of performance monitoring (PM), which records, analyses and publishes data in order to give the public a better idea of how Government policies change the public services and to improve their effectiveness.

PM done well is broadly productive for those concerned. Done badly, it can be very costly and not merely ineffective but harmful and indeed destructive.

Performance indicators (PIs) for the public services have typically been designed to assess the impact of Government policies on those services, or to identify well performing or underperforming institutions and public servants. PIs’ third role, which is the public accountability of Ministers for their stewardship of the public services, deserves equal recognition. Hence, Government is both monitoring the public services and being monitored by PIs.

Especially because of the Government's dual role, PM must be done with integrity and shielded from undue political influence, in the way that National Statistics are shielded. It is in everyone's interest that Ministers, Parliament, the professions, practitioners and the wider public can have confidence in the PM process, and find the conclusions from it convincing.

Before introducing PM in any public service, a PM protocol should be written. This is an orderly record not only of decisions made but also of the reasoning or calculations that led to those decisions. A PM protocol should cover objectives, design considerations and the definition of PIs, sampling versus complete enumeration, the information to be collected about context, the likely perverse behaviours or side-effects that might be induced as a reaction to the monitoring process, and also the practicalities of implementation. Procedures for data collection, analysis, presentation of uncertainty and adjustment for context, together with dissemination rules, should be explicitly defined and reflect good statistical practice. Because of their usually tentative nature, PIs should be seen as ‘screening devices’ and not overinterpreted. If quantitative performance targets are to be set, they need to have a sound basis, take account of prior (and emerging) knowledge about key sources of variation, and be integral to the PM design.

Aspirational targets have a distinctive role, but one which is largely irrelevant in the design of a PM procedure; motivational targets which are not rationally based may demoralize and distort. Anticipated and actual side-effects of PM, including on individuals’ behaviour and priorities, may need to be monitored as an intrinsic part of the PM process.

Independent scrutiny of PM schemes for the public services should be set up and must report publicly. The extent and nature of this scrutiny should be related to the assessed drawbacks and benefits, reflect ethical concerns, and conform with good statistical practice.

Research is needed into the merits of different strategies for identifying institutions or individuals in the public release of PM data, into how new PM schemes should be evaluated, and into efficient designs for evaluating a series of new policies which are monitored by PIs.

The Royal Statistical Society considers that attempts to educate the wider public, as well as policy makers, about the issues surrounding the use of PIs are very important. High priority should be given to sponsoring well-informed public debate, and to disseminating good practices by implementing them across Government.