Transportation Performance Management: Insight from Practitioners (2010)

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TRANSPORTAT ION RESEARCH BOARD WASHINGTON, D.C. 2010 www.TRB.org N A T I O N A L C O O P E R A T I V E H I G H W A Y R E S E A R C H P R O G R A M NCHRP REPORT 660 Subscriber Categories Highways • Public Transportation • Administration and Management • Planning and Forecasting Transportation Performance Management: Insight from Practitioners Cambridge Systematics, Inc. New York, NY High Street Consulting Group Pittsburgh, PA Research sponsored by the American Association of State Highway and Transportation Officials in cooperation with the Federal Highway Administration

NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM Systematic, well-designed research provides the most effective approach to the solution of many problems facing highway administrators and engineers. Often, highway problems are of local interest and can best be studied by highway departments individually or in cooperation with their state universities and others. However, the accelerating growth of highway transportation develops increasingly complex problems of wide interest to highway authorities. These problems are best studied through a coordinated program of cooperative research. In recognition of these needs, the highway administrators of the American Association of State Highway and Transportation Officials initiated in 1962 an objective national highway research program employing modern scientific techniques. This program is supported on a continuing basis by funds from participating member states of the Association and it receives the full cooperation and support of the Federal Highway Administration, United States Department of Transportation. The Transportation Research Board of the National Academies was requested by the Association to administer the research program because of the Board’s recognized objectivity and understanding of modern research practices. The Board is uniquely suited for this purpose as it maintains an extensive committee structure from which authorities on any highway transportation subject may be drawn; it possesses avenues of communications and cooperation with federal, state and local governmental agencies, universities, and industry; its relationship to the National Research Council is an insurance of objectivity; it maintains a full-time research correlation staff of specialists in highway transportation matters to bring the findings of research directly to those who are in a position to use them. The program is developed on the basis of research needs identified by chief administrators of the highway and transportation departments and by committees of AASHTO. Each year, specific areas of research needs to be included in the program are proposed to the National Research Council and the Board by the American Association of State Highway and Transportation Officials. Research projects to fulfill these needs are defined by the Board, and qualified research agencies are selected from those that have submitted proposals. Administration and surveillance of research contracts are the responsibilities of the National Research Council and the Transportation Research Board. The needs for highway research are many, and the National Cooperative Highway Research Program can make significant contributions to the solution of highway transportation problems of mutual concern to many responsible groups. The program, however, is intended to complement rather than to substitute for or duplicate other highway research programs. Published reports of the NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM are available from: Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet at: http://www.national-academies.org/trb/bookstore Printed in the United States of America NCHRP REPORT 660 Project 08-62 ISSN 0077-5614 ISBN 978-0-309-15472-7 Library of Congress Control Number 2010928154 © 2010 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FTA, or Transit Development Corporation endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The project that is the subject of this report was a part of the National Cooperative Highway Research Program, conducted by the Transportation Research Board with the approval of the Governing Board of the National Research Council. The members of the technical panel selected to monitor this project and to review this report were chosen for their special competencies and with regard for appropriate balance. The report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the Governing Board of the National Research Council. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board, the National Research Council, or the program sponsors. The Transportation Research Board of the National Academies, the National Research Council, and the sponsors of the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report.

CRP STAFF FOR NCHRP REPORT 660 Christopher W. Jenks, Director, Cooperative Research Programs Crawford F. Jencks, Deputy Director, Cooperative Research Programs Lori L. Sundstrom, Senior Program Officer Megan A. Chamberlain, Senior Program Assistant Eileen P. Delaney, Director of Publications Maria Sabin Crawford, Assistant Editor NCHRP PROJECT 08-62 PANEL Field of Transportation Planning—Area of Forecasting Mark C. Larson, Minnesota DOT, St. Paul, MN (Chair) Nicholas Compin, California DOT, Sacramento, CA Montasir M. Abbas, Virginia Polytechnic Institute and State University, Blacksburg, VA Katherine D. Jefferson, Virginia DOT, Chantilly, VA Nick Mandel, Santa Fe, NM Terrel Shaw, HNTB Corporation, Jacksonville, FL Alan M. Warde, New York State DOT, Albany, NY Shuming Yan, Washington State DOT, Seattle, WA Thomas Van, FHWA Liaison Martine A. Micozzi, TRB Liaison C O O P E R A T I V E R E S E A R C H P R O G R A M S

This guidebook provides insights from selected transportation agencies who are success- fully integrating transportation performance management programs into a range of key decision-making processes in order to improve their effectiveness and transparency. This guidebook will assist transportation agency staff challenged with turning performance data into meaningful information that will influence agency decisions and actions. It should be of immediate use to those who have mastered the basics of performance measurement but who will benefit from a deeper understanding of what similar organizations have done in order to successfully integrate these systems into key decision-making processes. In recent years, a growing number of state departments of transportation (DOTs) have initiated comprehensive transportation performance management programs, often to ful- fill statutory mandates designed to inform the public about departmental actions. Trans- portation performance management systems are increasingly being developed or enhanced to support a broad range of activities such as strategic planning and decision-making, com- prehensive asset management, transportation system performance, project delivery, budget and cost control, program efficiency, and demonstration of effective departmental steward- ship of public funding. Implementation and integration of transportation performance management programs into the fabric of an agency’s decision-making is essential, not only to make the transition to more business-like operations but also to ensure that agency responses to emerging issues are being effectively and efficiently carried out. To date, research into transportation performance management programs has focused primarily on specific areas of measurement and the tools and institutional frameworks necessary for eval- uating the performance of projects and programs. Under NCHRP Project 08-62, Cambridge Systematics was asked to develop a guidebook that reflects current practice in designing, implementing, and sustaining transportation per- formance management programs in state DOTs as well as other organizations whose expe- rience is relevant. The research team was also tasked with identifying effective performance management frameworks and related tools that focus on how performance management programs are being integrated into decision-making. To meet the project objectives, the research team conducted a literature review and considered performance measurement programs at the federal, state, and local levels, and in the nonprofit sector. Outreach to 30 organizations considered to have advanced practices was conducted, and six in-depth case studies were prepared. The contractor’s Project Final Report that contains the results of the literature review and the results of the outreach and case study efforts are available on the TRB project website. F O R E W O R D By Lori L. Sundstrom Staff Officer Transportation Research Board

1 Summary 9 Chapter 1 Introduction 9 1.0 Benefits of Performance Management 10 1.1 Purpose of the Guidebook 11 1.2 Guidebook Development 12 1.3 Guidebook Structure 13 Chapter 2 Performance Management Structure 14 2.0 Strategic Planning 16 2.1 Performance Management 19 2.2 Reporting 19 2.3 Introduction to the Practitioner Insights—Practices to Ensure Success 21 Chapter 3 Use Performance Management to Help an Organization Focus 22 3.0 Initiate a Performance Management Program to Identify and Address or Avoid a Compelling Problem 23 3.1 As a Program Develops, Use Measures to Diagnose Problems 24 3.2 Support Performance Management with a Nimble Strategic Planning Process 25 3.3 Use Performance Management to Improve Agency Transparency 27 Chapter 4 Performance Management Must Engage with Employees 28 4.0 Senior Management Must Support the Program 29 4.1 Hold Staff Accountable for Agency Performance 30 4.2 Empower Staff to Take Ownership of the Program 32 4.3 Employee Challenges Are Inevitable 33 Chapter 5 Performance Management Requires a Customer Focus 34 5.0 Align Performance Targets with Customer Expectations 35 5.1 Learn How to Better Balance Multiple Constraints in Decision-Making 35 5.2 Build Agency Credibility via Modest, Customer-Focused “Quick Fixes” 37 Chapter 6 Sustain Performance Management by Building Constituencies 38 6.0 Senior Management Must Work to Institutionalize Performance Management 39 6.1 Ensure Many DOT Managers and Employees Are Involved in Performance Management 39 6.2 Use Performance Management to Build Bridges with State Legislators 40 6.3 Make Performance Management Efforts Visible to the Public C O N T E N T S

42 Chapter 7 Implementation 42 7.0 Initiate 43 7.1 Design 45 7.2 Execute 47 7.3 Apply and Evaluate