APPENDIX C analysis of results in March, Joint Committee Review in April and a prototype publication of Federal productivity covering the 1.3 million Federal employees in June 1972. The project plan anticipates a permanent program with participation by all agencies starting in FY 1973. Future Study Areas The project team has done some preliminary thinking on additional study areas aimed at improving Federal productivity for accomplishment during calendar year 1972. Provide assistance and advice to smaller agencies on improving productivity and developing related Techniques), e.g., regulatory agencies. Extend further the coverage of productivity Dissemination of inventions and new or improved Government. Improve the measurement of quality of Government Implement a program for improving the utilization of ADP equipment in the Federal Government. 81-339 O-72-8 APPENDIX D BRIEF HISTORY OF FEDERAL PRODUCTIVITY MEASUREMENT The Federal Government was a pioneer in developing measures of private industry productivity, and in stimulating private firms to measure their own productivity. However, it has only been in recent years that Federal Government agencies have made a concerted effort to measure their own productivity. Beginning in the late 19th century, and again during the inter-war period, there were a number of governmental ad hoc statistical studies of changes in the relationship of employment to the physical volume of production, as a result of mechanization and other factors, in various industries, particularly in the commodity-producing variety. In 1940, responsibility for continuing productivity estimates and studies was put in the Division of Productivity and Technological Developments in the Bureau of Labor Statistics. After the war, the Bureau's studies were expanded, and in 1959 productivity estimates prepared for the entire private economy, by major sectors, as well as for several dozen individual industries. It should be noted that the Bureau's studies were confined to the employment or man-hour relation to output, due in part to the focus of the Department of Labor. Also, the studies were confined to the private economy, with the exception of estimates of productivity in the Post Office Department, published in 1932. In the post-World War II period, a number of economists connected with universities and with the non-profit National Bureau of Economic Research, developed estimates of capital as well as of labor, and related output not only to capital but also to labor and capital by means of statistical "production functions," and "total productivity" ratios. By these means, it became possible to measure the rate of technological advance as regards unit real-cost reduction (given certain assumptions as to the nature of the production function, as well as to measure changes in requirements per unit of output for each of the broad factor input classes. This work, which continues, provided powerful tools for analyzing the processes of economic growth, in aggregate and by industry, and thus increased ability to project and to devise policies to influence the casual forces and economic impact of technological change. The first broad attempts to measure the productivity of producing units-in this case private establishments or firms--came after World War II. The Productivity Division of the Bureau of Labor Statistics inaugurated a series of direct plant-level studies of output per man-hour and related variables, in order to compile composite industry measures, and also to be able to analyze the factors responsible for differential levels and rates of change in "labor productivity" among establishments of the same industry. Management interest was aroused through contacts with the Bureau, and through reprinting of the results of the studies by the Bureau of Labor Statistics and by business media. In recent years, many companies have commenced measurement programs. APPENDIX D Efforts by Government agencies to measure the productivity of administrative components or the whole organization came somewhat later. There were a few isolated cases of output per employee measures during the 1950's but no concerted effort. In 1962 the Bureau of the Budget became interested in the possibilities of developing total productivity indexes for Government organizations to use in determining the efficiency with which the agencies produce their output. Accordingly, a proposal was made to explore the feasibility and usefulness of productivity measurement in Government organizations. The project was conducted in five agencies: --Division of Disbursement, Bureau of Accounts, Treasury Department --Department of Insurance, Veterans Administration --Post Office Department --Systems Maintenance Service, Federal Aviation Administration --Bureau of Land Management, Department of the Interior The completed study Measuring Productivity of Federal Government Organizations was released in September 1964. The study demonstrated that usable and useful productivity measures could be prepared for four out of five of the pilot agencies (which accounted for 44% of the Federal civilian employment, due to the inclusion of the Post Office Department). As a result of the study, it was concluded that development of valid productivity measures is feasible for a considerable proportion of Federal Government activities. Since the initial report was published, the Bureau of the Budget continued to work on developing productivity measures with a number of additional organizations among which were the Meat Grading Program and the Soil Conservation Service of the Department of Agriculture, the VA's Department of Medicine and Surgery, Social Security Administration, Defense Supply Agency, the Bureau of Engraving and the Mint in the Treasury Department. However, the work in the Budget Bureau was slowed down after 1965 when the staff specifically assigned to this area was disbanded. This eliminated, for the most part, any further development of total productivity measures by the agencies. In March 1968, however, the Bureau initiated studies of the relationship of composite output to man-hours worked in organizational units of 15 agencies. The emphasis of this study was on manpower productivity measurement. The study showed that statistical estimating techniques can be used effectively to convert workload output data to estimates of manpower requirements with relative ease, objectivity, and efficiency. Manpower productivity measures can be readily developed from the statistical estimates. APPENDIX D In January 1971 Senator Proxmire wrote to Elmer Staats, Comptroller General of the General Accounting Office, requesting that GAO undertake a comprehensive evaluation of the possibilities for measuring productivity in the Federal sector of the economy. Mr. Staats, in his reply to Senator Proxmire, proposed a joint effort of the Office of Management and Budget, the Civil Service Commission, and GAO to identify the types of productivity measures which are feasible and significant, and then to plan a program to develop and utilize such measures. APPENDIX E LIST OF 114 ORGANIZATIONAL ELEMENTS BY AGENCY 1. Department of Agriculture Stabilization and Conservation Service Conservation, Technical Assistance Flood Prevention Program Watershed Planning Program, PL 566 Resource Cons & Development Project Operation Great Plains Conservation Program Planning Resource Cons & Development Program Forest Service Recreational Public Use River Basin Survey Program Conservation Plant Materials Centers 2. Department of Commerce Patent Office National Weather Service Economic Development Administration Bureau of Census, Personal Census Service Br National Ocean Survey 3. Department of Defense Department of the Air Force Air Force Logistics Command, Materiel Mgmt Department of the Navy Marine Corps Finance Center Navy and Marine Corps Supply Centers Navy Finance Centers and Offices Naval Air Rework Facilities Navy Public Works Centers Naval Ordnance Activities Shipyards |