d. To collect data, not only in terms of man-year and labor costs, but also to include capital and other costs affecting productivity, if possible. e. To prepare plans for (1) the annual analysis of the productivity data, and (2) a report to the Congress and the public of significant trends. f. To educate managers on the uses of such indices, particularly for planning, operating, and capital budgeting. 4. Finally, it is recommended that the joint steering committee work with the National Commission on Productivity to seek ways of developing a wide range of productivity measures covering common functions performed at State and local government levels. It is recommended that funding of such research be drawn from the grant programs, where possible, and that highly practical research projects be launched. lected military installations and the D.C. Government may be useful as laboratories for the development of such measures. If this program is successful it will extend productivity measures to another 10 million employees in the State and local sectors. ENHANCING FEDERAL PRODUCTIVITY The Measuring Federal productivity was only part of what the joint team set out to do. Its other task was to determine how Federal productivity might be enhanced and improved. work of the joint team showed several areas into which Federal management might move to bring about improvements in Federal productivity. These were: A. Through the use of better measurement systems including work measurement data, unit costs, and effectiveness measurement methods. B. Through better methods of financing productivity C. Through providing motivation for enhancing productivity. Each of these topics is discussed separately below. A. Enhancing productivity through the use of One of the key conditions that is needed to enhance productivity is good management decisions. Management--at various levels--makes decisions on such things as whether existing practices are efficient or whether new methods should be found; whether existing equipment is sufficiently economical or new equipment should be purchased; and whether workers have appropriate skills or whether additional training is needed to make them appropriately productive. sions such as these are the ingredients of increased productivity. Without careful, informed decisions at all levels, little more than level or even sagging productivity can be expected. To make good decisions, managers need facts. Manage rial decisions for the most part are based upon comparisons of information on their function or operation with some standard or criterion. Often the standard or criterion is past performance. For example, if a manager's goal is to keep his costs from rising, an across-the-board Federal pay raise will mean that he will have to take some productivityimproving action if he is to meet his goal--assuming no change in workload. Without facts on that past cost performance, the manager would not know where he was, or what he could expect from any decision he might make to keep his costs from rising. The type of information that management needs to make decisions varies with the type of decisions required. Three types of measurement data that came to the attention of the joint team were deemed particularly useful for productivityenhancing decisionmaking. These are: 1. Work measurement data. 2. Unit costs. 3. Effectiveness measurement. Work measurement data consists of stating quantities of work performed in terms of hours consumed as compared to a standard. For instance, if the standard for reproducing pages of photo copy is 50 per hour and the operator produces only 47 per hour, he is working at 94 percent of standard. Unit costs relate the volume of work to the funds required to produce the work. For example, the cost of producing 1,000 one dollar bills is $7.69. The particular genius of unit costs is that they take out of the cost picture, fluctuations that occur because of differences in quantities. For example, if the total cost for producing a product were $10,000 in 1971 and $12,000 in 1972, it would look as if costs increased if only total cost is viewed. However, if 1,000 units were produced in 1971 and 1,500 units in 1972, the use of unit costs would show that, while costs in total dollars increased, the unit cost actually decreased, as shown below: The third area of measurement involves effectiveness measures. Effectiveness measures involve comparisons of achieved results with predetermined goals or objectives. All three measures are related and all three serve useful purposes. With all three, the manager can have comprehensive information about his organization and those areas in which he can make decisions to enhance the productivity of that organization. A presentation on the relationship of these measures is included as appendix I. Our findings in the use of these measures are described below. WORK MEASUREMENT SYSTEMS Work measurement systems can contribute to effective management decisionmaking by providing information on how much time is actually spent to perform certain tasks as compared to a standard. With this information managers can decide such things as how many men will be needed to perform predicted future workloads and whether work performed has been accomplished efficiently. To be useful such systems must be soundly conceived and accurately maintained and the results must be effectively used. In performing its work, the joint team made a number of inquiries into such systems to obtain some insight into whether the work measurement systems in use by governmental organizations are functioning as intended and whether effective use is made of the results. These approaches involved analysis of measurement systems in selected agencies, questionnaires administered to about 100 members of Federal Executive Boards, and management interviews of approximately 250 managers at various levels in the field establishments of five agencies. Some of the data we obtained at one installation we visited illustrates how such data can be used. At that installation daily reports are produced on such functions as loading items to be shipped on railroad cars. Actual time spent is compared to the standards established for the steps involved, such as loading containers on pallets; to determine the degree of efficiency achieved in performing the work. This data is summarized into broader categories as it goes up the line. For instance, it is summarized by branch and reported weekly to the division level. At the division level it is summarized monthly and reported to the directorate level. An example follows: The agency's Director gets information on problems within any of the agency's functional areas in a monthly formal briefing. These briefings involve comprehensive performance appraisals which examine the status of each major program in terms of relative indicators of progress. The briefings include assessment of the performance of individual installations as well as organization-wide accomplishments. While certain items are reviewed regularly, the content of each briefing varies to be fully responsive to the changes in operational environment and to the current needs of management. Data are presented on (1) current trends in workload and performance efficiency, (2) status in meeting key program objectives, (3) qualitative indicators of mission performance, and (4) status of progress in special interest areas. The following charts are examples of the type of information utilized in the briefings. This chart displays 13 months' information. The solid line |