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In 1998, the General Services Administration's (GSA) Public Buildings Service (PBS) implemented its Linking Budget to Performance initiative. The initiative allocates regional office budgets based in part on how well organizational performance targets are met. Under the initiative, PBS has seen its organizational and individual performance improve across a broad array of measures. According to PBS Commissioner Robert A. Peck, it has allowed PBS to more clearly focus on achieving superior performance that "thrills our customers, provides maximum return on investment to our taxpayers, and tells us how and where we need to improve."
PBS provides work environments for over one million Federal employees and is the owner/operator of the largest real estate inventory in the U.S. It has approximately 7,000 employees divided among 11 regions. Following passage of the Government Performance and Results Act of 1993 (GPRA) and several years of declining revenues, PBS was under increasing pressure to improve its business operations. To meet this challenge, Commissioner Peck in 1997 established a team to "devise a means of allocating a portion of PBS's budget to regions that rewards success in meeting performance measures, establishing budget allocation levels, establishing performance targets, monitoring actual performance, and rewarding success." The team developed the Linking Budget to Performance initiative.
The initiative is based upon nine performance measures considered fundamental to PBS's major program areas:
Targets for the measures are based on either PBS's national goals, the average scores of the top five regional performers, or comparison to private sector costs. Each measure is assigned a weight that reflects the value added to PBS's performance by accomplishment of the targets. GSA distributes a portion of a Performance Excellence Pool to the regions for each national performance goal they exceed. Within certain parameters, each region has the discretion to spend its money as it deems best, and in most cases employees are financially rewarded for outstanding results.
According to Tom Tolly with PBS's Business Performance Division, the initiative "has been successful beyond all reasonable expectations. It has increased efficiency, profitability, and effectiveness, and has everyone pretty much working off the same page." While each region has experienced varying levels of improvement in the different measures, the overall effect clearly has been positive. For example, 10 out of the 11 regions saw their customer satisfaction, indirect costs, cleaning costs, and lease costs scores improve during the first year. To complement this success, the best business practices of the three highest scoring regions for each measure are shared with the other regions so that they can be deployed throughout PBS. Bill Jenkins, Assistant Regional Administrator for PBS Region 2, believes that changes beyond improved scores have occurred. He notes: "Initially, a lot of employees probably viewed the initiative as a flavor of the month program, and cash incentives were not a big motivator. But this perception has probably changed 100 percent because management rewarded not only the business practices by giving money back to the regions, but also awarded money to employees for doing a good job. In addition, the initiative has really improved teamwork and camaraderie."
For a special look at the Linking Budget to Performance initiative from an insider's perspective, read an interview with Bill Jenkins.