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Wednesday, December 27, 2006

Performance Management Part 2 (Monitoring Employees Performance)

Here's the next component of Performance management. It is called "Monitoring Performance." Monitoring performance is a critical part of performance management. without a system in place for doing this, your performance management system could go nowhere. Just imagine a basketball game without the scores or statistics. How would you know who is winning or who is making the most or least contribution to the achievement of the goal as the game progresses or who needs to improve and in what particular tasks? How can coaches talk to their teams about their performance?

In John Maxwell's book, The 17 Undisputable Laws of Teamwork. He talked about the Law of the Scoreboard. He said that the team can make adjustments when it knows where it stands. This is I believe the same premise on why performance monitoring is important. people can make adjustment in their performance if they know where they stand. Unfortunately, determining where people stand in terms of their own performance is easier said than done.

So, how do we go about monitoring performance? There are two types of performance indicators:

  • Lagging indicators are results of indivudual or group performance. Examples of these are Financial results, Customer satisfaction levels, Production output, etc. Let's call them after the fact indicators.
  • A leading indicator is a metric used to drive and measure activities carried out to prevent and control injury, damage or loss. When measured and monitored effectively, they provide data to enable effective intervention to address or reverse a negative trend before it results in injury, damage or loss. Behavioral attributes of a competency model, inputs, attendance, compliance with procedures and safety practices, etc are examples of leading indicators. Lets call it before the fact indicator.

Why is it important to monitor both leading and lagging indicators? It is because we want to know what leads to good or bad output. If the only thing we know is good or bad output, it will be difficult to correct it or repeat a good output. I'm sure a lot of eyeballs are rolling now after considering the amount of work needed to have such a monitoring system in place. I don't blame you, that has always been the challenge for many organizations. Monitoring all key aspects of leading and lagging indicators can be a real nightmare. But hey, if there is a will there are ways!!!
This my friends is where technology comes in to play. I've seen some companies build in-house programs for monitoring performance indicators. I've also seen a lot of Balanced Scorecard software and business intelligence software that monitor both leading and lagging indicators. I recommend that you research on these key words "balanced scorecard" and "business intelligence software" to get an idea on the capabilities of these technologies. You can of course, always do it manually, if you have the time and the patience. What is critical is that you are able to identify the following:

1. Key performance indicators (both lagging and leading)

examples:

  • Lagging Indicator: actual versus quarterly, semi-annual or Annual sales target
  • Leading Indicators : number of leads, client calls made, proposals submitted, demonstrated skill in conducting sales presentations, etc.

2. Ways to measure (actual versus target, or expected behavior versus actual behavior?)
3. When to measure (What is your agreed check points?)

Before I forget, all the performance indicators should link to the goals we've set at beginning of the cycle. (remember organizational, departmental and individual goals and KRA's?)


What is even more important is that you have historical data that show trends that will aid you
in managing performance especially when we go to the next component which is DEVELOPING EMPLOYEES' CAPABILITY TO PERFORM.

But before we go there, let's answer the following questions:

1. How do you keep a tab on employees performance on a regular basis?
2. How do you make employees aware of their performance against, set expectations?
3. What are your suggestions, for maintaining a good performance monitoring system? (believe me a lot of people need good suggestion on this one including myself!!! :D)

If you are reading this and you have a great idea or two to share on the subject matter please click the comment button bellow and share your valuable input! Believe me everyone needs help in this area.

To emphasize the importance of setting up a performance "scoreboard" try playing basketball, or tennis or any competitive sport without it. See what happens...

Speaking of scoreboards. I once worked for a company that posts all sorts of indicators from sales, customer count, inventory turn around time, to cash variation trends. I tell you, those things speak for themselves when they are shown to employees.

Next stop, Developing capability to perform.


See you next post!

1 comment:

  1. Hi

    I like this post very much. It help me to solve some my work under my director’s requirements.

    Apart from that, below article also is the same meaning

    key performance indicators examples

    Tks again and nice keep posting
    Rgs

    ReplyDelete

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