Criteria for developing performance measurement systems in the public sector

The United States Government is placing increased emphasis on the development of financial measures, and measures of program effectiveness. The authors discuss government efforts in these areas. Various approaches and criteria are presented for the development of performance measurement systems, as well as generic criteria for selecting performance indicators, and obstacles to the process. Experience indicates that development of a performance measurement system is best served by a strategic planning approach with top management support, active management participation in goal setting, a small manageable number of goals, a strong link with the budget process, and an independent evaluation process.