Performance management

This section includes good practice on:

• Introduction
• Managing the benefits service
• Monitoring performance
• Management information
• Workload management
• Process improvements

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Introduction

Effective performance management helps organisations to achieve their goals.

To achieve optimum levels of performance, local authorities (LAs) should set appropriate targets and monitor service delivery. It is vital to make managers responsible for delivery against targets.

Service delivery planning is required to ensure that the use of resources is effectively managed and monitored to deliver service standards and local performance targets. A benefits service delivery plan for administering Housing Benefit and Council Tax Benefit (HB and CTB) effectively translates the strategy, policies and objectives into practical ways of providing a service. At their best, such plans will provide a basis for managing any changes that are required to improve the HB and CTB service.

When an LA employs a contractor to assist in benefits administration, the performance of the contractor requires careful monitoring to secure the benefits envisaged from contracting out. Variance clauses should be used at contract review points to renegotiate any performance standards that require adjustment in the light of experience up to that point.

In addition, the private sector offers an increasing range of services and an LA may choose to outsource part of its functions for a limited period of time, for example to procure additional processing capacity to clear backlogs of work or to cope with peaks in work. These contracts also require careful monitoring.

It is vital that the LA has in place the documented arrangements to enable it to manage and minimise the impact of risk on the efficient and effective delivery of its benefits service. The Civil Contingencies Act 2004 places a business continuity management duty on LAs not only in relation to their civil protection responsibilities but it also requires them to make provision for ensuring that their ordinary functions can be continued to the extent required. Planning for business continuity in the event of a local disaster or national emergency should not be the only consideration: any major change programme such as information technology (IT) system implementation should include business continuity arrangements. The Cabinet Office website contains useful advice and links for practitioners involved in drawing up emergency and business continuity plans.

The purpose of performance monitoring is to provide assurance to Members and senior officers that HB and CTB administration is effective and secure. It is important that they receive reports on performance against the benefits service strategic plan, policy objectives, targets delivery plans and customer charter. Performance reporting to Members makes the accountability process transparent while performance monitoring can also encourage the development within the organisation of a 'culture' of continuous improvement.

Given the high volumes of work involved in HB administration, it is essential to have good management information so that workloads can be monitored closely. Failure to monitor and measure workloads can lead to backlogs, and the additional work associated with backlogs can lead to even poorer performance. Detecting problems early can enable weaknesses in the procedures to be addressed or resources to be prioritised. Another key strategy in the organisation of work and resources is to learn from historical data.

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Managing the benefits service

Good practice includes:

• setting stretching internal management targets that are comprehensive in scope and provide a baseline of current performance
• putting in place arrangements to monitor the delivery of plans and targets on a quarterly basis (including if appropriate, resources to monitor outsourced elements in line with contracts) to inform senior officers and Members
• having documented arrangements to manage risks to the service provision to ensure business continuity during change programmes and emergencies.

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Monitoring performance

Good practice includes:

• identifying where statutory regulations are not being achieved and establishing the reasons so that corrective action can be implemented for the future
• collecting sufficient, accurate management information to monitor its performance against national performance indicators
• providing Members and interested third parties, at agreed intervals, with performance reports underpinning the strategic plan, policy objectives and documented delivery plans
• monitoring performance against other service delivery targets set locally
• ensuring that managers and other employees are aware of performance in their own areas of responsibility
• having standard formats for reports that are regularly reviewed by their recipients to maintain their relevance to the LA's and the benefits service's strategic issues and priorities
• providing exception reports when required
• ensuring that the lessons learnt from previous reporting periods and reports by other organisations are used to inform decisions about improving future performance in HB and CTB administration.

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Management information

Good practice includes:

Investing in specific system training in how to input correct system data such as receipt and decision dates for new claims and changes of circumstances. Some LAs have found this action has resulted in reduced processing times.

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Workload management

Good practice includes:

• using the strategic plan for the benefits service to draw up an operation plan for improving performance.
• including in the plan:
  • a high level statement of intent that falls out of the corporate and strategic plan. For example, "The Council will provide a prompt and accurate benefits service that performs within the local targets and set out to achieve excellent performance"
  • summary of current position and performance. This would include a list of current performance against performance indicators and local targets as well as details of work outstanding. Any problems such as a backlog or IT difficulties should also be included with an assessment of their impact on performance continued
  • desired level of performance. What performance is being aimed for and in what target time-scale? This would be based on the performance indicators/local targets past performance and would include what is acceptable in terms of a 'head of work'
  • proposals for moving from current position to desired level of performance. What needs to be done and why?
    
    This would include
    
    • estimated resource requirements to execute the plan
    • estimated resource availability during the period of the plan taking into account known leave commitments and, if appropriate, assumed additional absences
    • estimated workloads during the period of the plan
    • estimates of productivity
    • if appropriate, proposed changes to working methods, distribution of work, organisational structure
    • if appropriate, proposals for meeting any shortfall in resources or for modifying the target timescales
    • a projection (preferably a weekly profile) of how it is anticipated the plan will impact including success measures. This will form the basis of milestone targets against which progress can be monitored
  • arrangements for monitoring and reviewing progress. This will include details of who will report what to whom and how often. Senior officers/Members need to have a clear understanding of what is expected and targets against which they will regularly monitor progress.
• using internal HB and CTB management information to:
  • analyse peaks and troughs of workloads to identify resource requirements to reduce processing times to achieve an 'excellent' level of performance
  • predict trends, identify patterns and risks or procedural weakness and adjust work priorities and resource allocations accordingly.
• assisting continuous improvement in HB and CTB administration by identifying the causes of deviations from plans and targets
• mapping process procedures, including a claim made through the customer information system (CIS), to identify and overcome the barriers to achieving quicker processing times and accurate payments.

Process improvements

There are a number of different methodologies to ensure improvements in business processes. Several LAs are currently reporting significant success after adopting the Lean methodology in their Benefits service.

What is Lean

Lean is a way of bringing about continuous improvement and changing the culture of a business. It is a philosophy which focuses activity, people and other resources on serving customers and eradicating waste. Waste is defined as something that does not add value to the customer experience, for example, the failure to do something right for customers the first time of asking.

Why it’s important

LAs should be looking to continuously improve the service they provide their customers. Real and sustainable improvements in performance can be achieved by changing the processes and systems operated by staff by focusing entirely on the customer and meeting their needs at the earliest opportunity.

• How it works

The needs of customers and the business’ goals drive the design. Lean is based on a set of principles that puts the customers at the centre of service design and delivery. It is about eliminating waste, variability (in the customer experience) and inflexibility (not being able to respond consistently to what customers want or need). It involves:

• identifying the end-to-end processes from the customer’s perspective
• focusing on understanding what value is being added at every stage
• doing things right first time
• solving problems as they occur
• actively managing performance in real time
• improving and learning.

Benefits of applying Lean in HB/CTB service

Lean a journey of continuous improvement and has three main benefits:

1. Improving the quality of service to customers

The processes that impact on the customer experience should be routinely and critically considered as issues are uncovered, best practices identified and new approaches tested. Applying Lean enables a LA to find out what really matters to customers on areas of service delivery such as:

• obtaining the right response at the first time of asking
• quick responses to enquiries
• getting through on the telephone straight away with no queues and talking to the person who can answer the query

• staff having the knowledge of the subject to deal with the query raised
• staff fully understanding the issue raised by the customer
• staff being able to provide clear instructions to customers.

2. Improving business efficiency

Lean provides efficiencies which can be reinvested in the service. For example, to carry out benefit take-up work, provide additional time for staff training, considering legislation and ensure IT system reports are processed; which, in turn, can reduce overall system down time particularly at year end.

3. Building staff capability and engagement

Applying Lean focuses on building the capability of staff in Lean principles so once processes have been improved continuous improvement can be sustained. Staff that operate the processes are best placed to know what does and what does not work, design new processes and make decisions on refining them and solving problems as they occur. Staff need to have the capability and confidence to continuously review the procedures and identify further refinements/improvements.

Getting started (an outline)

Obtain the appropriate level of management support

Lean can only be applied successfully with active and visible leadership from all management levels. This should include:

• real commitment of resource and effort from all managers – beyond any formal ‘project’ duration to ensure continuous improvement
• patience and support for staff as there might be a dip in morale and performance as the new processes are embedded
• supporting solutions that require significant changes to the way in which the LA deals with customers and conducts its day to day business both internally and externally.

Set-up a project team

The project team should consist of staff whose normal day to day responsibilities cover the end-to-end HB/CTB process.

Lean requires the team to focus on solving problems and improving work processes. This empowers and, in turn, motivates the team to deliver an improved service. Ideally the team will include representatives from the Revenues team as their work is integral to the work of the Benefits team.

Engage with consultants who will help run the project in the early days

If LAs do not have the necessary in-house staff with Lean knowledge and skills they should consider using external expert consultants, such as the Performance Development Team, in the early stages of the project. This will enable those on the project team to acquire the Lean knowledge and skills which will result in self-sustainability once the consultants have withdrawn.

By building staff capability in this way the LA will have confidence with their own internal resources to allow them to continuously review procedures, identify further refinements/improvements and drive up standards of customer service over time.

• Identify and agree the main demands placed on the HB/CTB service by customers

It is important for the team to consider exactly what customers want from the HB/CTB service. It does this by understanding the difference between value and failure demand.

• Value demand is where customers want something from the HB/CTB service and normally they will have inspired or instigated this. For example a customer wanting to claim benefit or report a change of circumstances
• Failure demand (waste) is where the HB/CTB service does not do the right thing for its customers. For example, re-doing things that are wrong, chasing things, querying incomplete instructions, doing other people's jobs etc.

Map the existing ‘as is’ process and analyse each step in the process

Making changes without truly understanding how the process is working and why, can lead to costly mistakes. It can also create conditions that make it difficult for staff to work effectively, and often creates further problems including time delays, extra work cost and most importantly unhappy customers. Process mapping helps to clearly define the current processes; identifying problem areas such as bottlenecks, unnecessary handling, capacity issues and delays. Defining the “as is” process in this way also helps to:

• identify the different steps
• explain how things are done
• who does what and how often they do it
• demonstrate how long it takes to complete something
• identify value and failure demand.

Determine and understand what customers want and expect from the HB/CTB service

It is normally management thinking, focus and assumptions led by, for example, legislation, IT, working practices and performance measures that result in the creation of systems and processes. It is these systems and processes that impact on customer service, efficiency and staff morale and can sometimes bring about poor performance and perverse behaviours in both customers and staff, for example, by introducing poorly defined targets. The project team therefore needs to understand the HB/CTB service as a system. This understanding comes from looking at the service from the ‘outside-in’ from the customers’ point of view to establish the demand placed on the HB/CTB service.

The project team needs to be able to identify the demands placed on the service by its customers. The team needs to consider the different means by which the customer contacts the service to determine what really matters to customers and how often the different types of customer demands occur.

As a minimum to identify the demands placed on the service the project team will need to:

• listen to telephone calls
• examine letters, emails and faxes
• review other electronic communications used by customer.

The purpose of this work is to obtain an informed understanding of the type and frequency of customer demand placed on the HB/CTB service.

Develop a set of re-design principles based on customer feedback and the demands they place on the HB/CTB service

The project team should use their newly acquired knowledge of Lean and customers’ needs to develop new ‘to be’ processes which will better serve the end-to-end customer experience. Process mapping provides a solid basis from which to develop solutions and introduce, and plan these new processes. The project team should therefore develop “to be” process maps for each of the demands placed on the HB/CTB service and working alongside their colleagues should test and refine the new processes they have developed.

• Gathering information by councils that have applied Lean

LAs that have successfully applied Lean have identified the following opportunities to improve the process of gathering information from customers:

• sending texts to customers to remind them about appointments to contact the council – it is very quick and cost effective with customers replying more quickly than when a voice mail message is left on their mobile phone of answer phone. It is also cheaper for customers
• avoiding sending letters to customers wherever possible as they can lead to delays and also increases the potential of unnecessary queries from customers
• providing customers with direct dial telephone contact numbers as it reduces customer waiting times and means their query gets routed to the correct person
• maximising use of appointments for customers as they are an effective way of gathering information the first time of asking
• organising a dedicated liaison person within Council Tax to deal with queries from customers and the benefits team. This helps to prevents internal delays when dealing with claims and changes to council tax liability. It also allows the council maintain more accurate Council Tax records and speedier billing and recovery actions
• scanning and indexing documents from customers at the point of contact as this reduces delays between the receipt of information and being available to action by assessors.

What to avoid

It is a good idea to avoid:

• focusing on quick-wins. Applying Lean is about applying a new philosophy to how work gets done and requires a medium to long term commitment to deliver sustainable improvements
• focusing on individual processes – the whole customer experience needs to be considered. There is little point resolving one problem only to create problems elsewhere in the process
• adopting a 'top down' approach in decision making and leaving the project team to get on with the work. Lean works 'bottom up', by giving responsibility for decision-making and implementation to the project team and providing support from the top.