This chapter provides assistance to transportation agencies with the Target Setting component of Transportation Performance Management (TPM). It discusses where target setting occurs within the TPM Framework, describes how it interrelates with the other nine components, presents definitions for associated terminology, provides links to regulatory resources, and includes an action plan exercise. Key implementation steps are the focus of the chapter. Guidebook users should take the TPM Capability Maturity Self-Assessment as a starting point for enhancing TPM activities. It is important to note that federal regulations for target setting may differ from what is included in this chapter.
Target Setting is the use of baseline data, information on possible strategies, resource constraints, and forecasting tools to collaboratively establish a quantifiable level of performance the agency wants to achieve within a specific time frame. Targets make the link between investment decisions and performance expectations transparent across all stakeholders.
Introduction to Target Setting
Target setting within the TPM Framework is an evidence-based and data-driven, collaborative process that establishes what an agency desires to achieve within a specific time frame. The target-setting process uses the goals, objectives, and performance measures of the Strategic Direction (Component 01) and determines the anticipated outcomes to be achieved. Targets are used to assess progress toward achieving strategic goals, guide planning efforts, inform programmatic decisions and adjustments, and communicate with the public and other stakeholders. Targets make the link between investment decisions and performance expectations transparent for all stakeholders. In short, the process of setting targets completes the foundation (along with the Strategic Direction, Component 01) from which strategic decision-making is launched.
The target-setting process is vital to the implementation of TPM and offers unique and powerful benefits to an agency by:
- Driving a conversation about current conditions and how to achieve future outcomes;
- Creating a method for evaluating processes currently in place, particularly data quality and measurement definitions used by the agency;
- Guiding the prioritization and allocation of resources;
- Enabling assessment of strategy effectiveness by focusing on linking goals, objectives, and measure to policy and investment decisions;
- Forming a powerful argument for additional or alternative investments; and
- Managing expectations by clarifying what outcomes are desired.
The target-setting process is intertwined with the tenets of TPM: connecting employee actions to results, motivating and focusing staff, increasing accountability, identifying opportunities for external collaboration, guiding the allocation of resources, and tracking the efficacy of various programs and strategies.
Evidence-based and data-driven target setting is founded on quality data, good analyses (i.e., technical methodology), and solid business processes.
- Quality data are the foundation to observing the baseline, conducting trend line analysis, and estimating forecasts. It is important to know the limits of the data: see Data Management (Component C) and Data Usability and Analysis (Component D). If quality data are not available, what are the strategies that can be applied to improve the usability of the data?
- Good analyses are the approaches used to convert data into valuable evidence-based and data-driven information, enabling target setting.
- Without good business processes in place and documented for accountability and repeatability, target setting will not be sustainable.
Subcomponents and Implementation Steps
Figure 2-1: Subcomponents for Target Setting
Source: Federal Highway Administration
The definition for target setting is: The use of baseline data, information on possible strategies, resource constraints, and forecasting tools to collaboratively establish a quantifiable level of performance the agency wants to achieve within a specific time frame. Targets make the link between investment decisions and performance expectations transparent across all stakeholders. Target setting is broken down into two complementary subcomponents (Figure 2-1).
- Technical Modeling: Implementation of an evidence-based and data-driven approach for observing a baseline and evaluating a performance trend.
- Business Process: Establishment of an intra-agency process including internal coordination and collaboration to establish and modify performance targets.
The technical methodology relates to the compilation and analysis of historical, current, and projected performance data to guide target setting, while the business process builds internal collaboration, defines roles, and specifies the steps necessary to ensure a strong internal target setting approach is in place. Steps undertaken in the Business Process also determine how, when, and to what extent external collaboration is needed (see External Collaboration and Coordination, Component B). The technical methodology is how the “number” is established that becomes the target. This will involve observing and examining baseline trends, performance data, developing trend lines (i.e., historical and projected trends), and analyzing future scenarios. In addition to establishing a solid technical approach to target setting, agencies should establish and sustain an internal business process to gain agreement on a realistic target. This includes defining the agency’s key players and establishing a process that ensures coordination in target setting across different performance areas, and leveraging external collaboration. Through regularly scheduled activities, a continuous cycle is created including target setting, Performance-Based Planning (Component 03), Performance-Based Programming (Component 04), and Monitoring and Adjustment (Component 05) to ensure objectives, goals, and measures (Strategic Direction, Component 01) are linked to policy and investment decisions.1 Both subcomponents are necessary and implementation steps from each are completed concurrently, as the agency deems useful. Table 2-1 presents the implementation steps for target setting that will be further explored in this
Source: Federal Highway Administration
|Technical Methodology||Business Process|
|1. Establish a baseline||1. Assign internal roles and responsibilities|
|2. Analyze historical trends||2. Clarify purpose of the target|
|3. Identify influencing factors and assess risk (internal and external)||3. Gather information through benchmarking|
|4. Define target parameters||4. Reflect external stakeholder interests|
|5. Forecast future performance||5. Document the business process|
|6. Document technical methodology|
Because target setting relies on a carefully investigated baseline, the development of future scenarios, and an understanding of future programming and resource allocation decisions, a transparent target-setting process creates an open dialogue about specific outcomes the agency wants to achieve and articulates the connection between actions and results. Initially, actions required to achieve established targets are clarified; later, during Monitoring and Adjustment (Component 05), the effects of past actions are re-examined to determine what changes should be made to realign agency strategies toward target attainment. Targets also provide justification necessary to make the case for additional resources and more or better quality data. As transparent target setting percolates through an organization, the relationship between each employee’s day-to-day activities and the desired results becomes more real, further imprinting TPM practices across the organization.
“Target setting should not focus on a single target value for a performance measure, but on achieving improved performance over time. The value of performance management is found in better decision-making, not target achievement.”
Source: AASHTO SCOPM Task Force Findings on MAP-21 Performance Measure Target-Setting (March 2013)
Table 2-2 presents the definitions for the target setting terms used in this Guidebook. A full list of common TPM terminology and definitions is included in Appendix C: Glossary.
Source: Federal Highway Administration
|Baseline||The observed level of performance for a specified performance period from which implementation begins, improvement is judged, or comparison is made.||2014 fatality rate = 0.83 per 100 million miles of travel.|
|Benchmarking||A comparison of two numbers, often historical data, with current numbers or one agency’s results against its peer’s.||Assessing an agency’s fatality rate by comparing it to that of a peer agency, or to historic fatality rates.|
|Goal||A broad statement of a desired end conditions or outcome; a unique piece of the agency’s vision.||A safe transportation system.|
|Metric||An indicator of performance or condition.||The annual number of fatalities.|
|Objective||A specific, measurable statement that supports achievement of a goal.||Reduce the number of motor vehicle fatalities.|
|Performance Measure||Performances measures are based on a metric that is used to track progress toward goals, objectives, and achievement of established targets. They should be manageable, sustainable, and based on collaboration with partners. Measures provide an effective basis for evaluating strategies for performance improvement.||Transit passenger trips per revenue hour.|
|Performance Period||An established timeframe for monitoring results and collecting data and information for performance reporting.||A calendar year.|
|Target||Level of performance that is desired to be achieved within a specific time frame.||Two % reduction in the fatality rate in the next calendar year.|
|Transportation Performance Management||A strategic approach that uses system information to make investment and policy decisions to achieve performance goals.||Determining what results are to be pursued and using information from past performance levels and forecasted conditions to guide investments.|
|Trend Line||A trend distilled from historical or projected performance data.||The graph depicting annual fatality rate and five-year average fatality rate from 2000 to 2014.|
Relationship to TPM Components
The ten TPM components are interconnected and often interdependent. Table 2-3 summarizes how each component relates to the target setting component.
Source: Federal Highway Administration
|Component||Summary Definition||Relationship to Performance-Based Planning|
|01. Strategic Direction||The establishment of an agency’s focus through well-defined goals/objectives and a set of aligned performance measures.||Targets turn goals/objectives and measures identified in the strategic direction into statements of desired outcomes.|
|03. Performance-Based Planning||Use of a strategic direction to drive development and documentation of agency strategies and priorities in the long-range transportation plan and other plans.||Targets describe the anticipated outcomes the strategies and priorities in these plans are striving to achieve.|
|04. Performance-Based Programming||Allocation of resources to projects to achieve strategic goals, objectives and performance targets. Clear linkages established between investments made and their expected performance outputs and outcomes.||Targets can influence and be influenced by the prioritization of the projects included in the STIP and TIP and agency budgets. Targets are needed to track progress toward expected performance outcomes.|
|05. Monitoring and Adjustment||Processes to monitor and assess actions taken and outcomes achieved. Establishes a feedback loop to adjust programming, planning, and benchmarking/target-setting decisions. Provides key insight into the efficacy of investments.||Targets provide the “stake in the ground” around which to evaluate the effectiveness of implemented strategies, progress toward goals, identification of unforeseen issues, and potential programmatic adjustments.|
|06. Reporting and Communication||Products, techniques, and processes to communicate performance information to different audiences for maximum impact.||Targets are integral to an agency’s performance language and are used to illustrate progress made, challenges incurred, and next steps related to the strategic goals.|
|A. TPM Organization and Culture||Institutionalization of a TPM culture within the organization, as evidenced by leadership support, employee buy-in, and embedded organizational structures and processes that support TPM.||Targets clearly communicate to all employees what the agency is trying to achieve and where the agency should focus its efforts. For targets to be embraced they also need to reflect the agency’s current culture.|
|B. External Collaboration and Coordination||Established processes to collaborate and coordinate with agency partners and stakeholders on planning/ visioning, target setting, programming, data sharing, and reporting.||The target setting process provides an ideal opportunity to collaborate with outside partners in order to establish targets, gain their support for agency’s efforts, and find common areas of interest.|
|C. Data Management||Established processes to ensure data quality and accessibility, and to maximize efficiency of data acquisition and integration for TPM.||The availability of data and the quality of data provide the foundation of target setting.|
|D. Data Usability and Analysis||Existence of useful and valuable data sets and analysis capabilities, provided in usable, convenient forms to support TPM.||The usability of data to observe baselines, examine trends, and prepare forecasts plays a significant role in the target setting process.|
This Guidebook is intended to assist agencies with implementing transportation performance management in a general sense, and not to provide guidance on compliance and fulfillment of Federal regulations. However, it is important to consider legislative requirements and regulations when using the Guidebook. In many cases, use of this Guidebook will bring an agency in alignment with Federal requirements; however, the following sources should be considered the authority on such requirements:
Federal Highway Administration
- Transportation Performance Management: http://www.fhwa.dot.gov/tpm/links_fhwa.cfm
- Fact Sheets on Fixing America’s Surface Transportation (FAST) Act: https://www.fhwa.dot.gov/fastact/factsheets/
- Fact Sheets on Moving Ahead for Progress in the 21st Century (MAP-21): https://www.fhwa.dot.gov/map21/factsheets/
- Resources on MAP-21 Rulemaking: https://www.fhwa.dot.gov/tpm/rule.cfm
Federal Transit Administration
- Fact Sheets on FAST Act: https://www.transit.dot.gov/funding/grants/fta-program-fact-sheets-under-fast-act
- Resources on MAP-21: https://www.transit.dot.gov/regulations-and-guidance/legislation/map-21/map-21-program-fact-sheets