Improving Federal Agency Efficiency Through the Use of Productivity Data in the Budget Process

A survey of the use of productivity data in the budget process covered 13 labor-intensive agencies with a total payroll of about $8 billion.

Although productivity data are available in most agencies, its use by agencies, the Office of Management and Budget (OMB), and Congress has been limited. The basic reason for agencies not making more use of the data is a lack of incentives. Many agency executives felt that productivity-related improvements often result in penalties such as arbitrary reductions in staffing and budget and that OMB and Congress were insensitive to innovative proposals for increasing productivity. Appropriations committees can stimulate productivity improvements by encouraging agencies to use productivity data in their budget requests through questions which would elicit information, provide incentives for productivity measurement and reporting, and lead to improved productivity. Legislative oversight committees and appropriations subcommittees can further encourage use of productivity data by: (1) requesting it to support requests for staffing increases; (2) requesting statements on the status of productivity improvement programs, work measurement systems, and the extent to which budgets are based on productivity data; (3) creating an atmosphere of positive reinforcement for using such data through budgetary and organizational incentives; and (4) encouraging agencies to identify major productivity improvements possible through investment in capital equipment.