Report on Alternative Outcome Measures: Temporary Assistance for Needy Families (TANF) Block Grant . Principles of Outcome-Based Performance Measurement

An outcome-based performance measurement system consists of four major elements:

  • Goals - What are the desired goals of the program? Will the goals be set at the national level or will states and communities be given the authority to choose among a range of possible priorities?
  • Measures - Are the measures relevant to the goals and desired outcomes of the program? Will users understand what is being measured and reported? Are valid data available to measure the outcomes? Do program administrators believe that these measures accurately reflect their performance?
  • Standards - What levels of performance do we expect? Should a single minimum nationwide standard be set for each measure, or should standards be adjusted to account for the economic and demographic differences among states and localities?
  • Consequences - What form should the consequences take - is publicity enough to affect state choices, or are financial penalties/incentives needed? Should penalties or bonuses, or some combination, be imposed on the basis of actual performance relative to the standards?

Engaging a broad range of stakeholders in structured discussions about all of these elements can be the basis for building performance partnerships in designing and implementing a performance measurement process. Even if one is not trying to achieve consensus, this wider audience provides a better perspective on what is possible in the real world (e.g., what is operationally feasible, what are possible unintended consequences, etc.) and may facilitate future data collection efforts (Hatry, 1999). Based on HHS's experiences in developing the TANF High Performance Bonus guidance and rulemaking and reports from states that have developed outcome-based performance measurement systems, holding inclusive discussions appears to be the preferred approach. Some states have used the process of developing results-based accountability systems to engage the wider public in a discussion about statewide policy goals and priorities (either within or across specific programs) and to build a commitment of public, private, and nonprofit resources toward these ends.