QUESTION: How Do I Measure Staff Performance?

October 23, 2012 by Stacey Barr

Hundreds of subscribers to Measure Up ask me how to successfully measure staff performance. If you’ve known me for long enough, you’ll know I will say: DON’T!! For reasons based in research and experience and personal values, I am not an advocate at all of measuring people. But I am curious about why so many people are so keen to do it…

can of wormsI’ve posted a few articles over the years about the risks of measuring the performance of people.

But maybe I’ve got it all wrong? Loads and loads of people still want to do it (they admit they struggle with HOW to do it successfully).

Let’s open a can of worms together… Let’s discuss the following questions:

  • Why do you think it’s useful or important to measure staff performance?
  • What do you see as the risks?
  • How are you trying to do it?
  • What’s going right? What’s going wrong?

Don’t hold back… I want to know!!

TAKE ACTION: Please come over to the Measure Up blog and tell me why we should measure people, or why we shouldn’t, so we can start a good discussion about it. I’m sure we’ll all learn something valuable from each other!

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  1. I’m inclined to agree with your long-held view that it’s not really very productive to measure staff performance. I’m far more interested in measuring the performance of the organisation in terms of how well it is prosecuting the strategy that was planned and approved for execution.

    But there are always people demanding to know exactly who in each team is contributing the most (or least), and in large organisations the 360-degree appraisal system turns this measurement process into a two edged sword that cuts in either direction – up and down the hierarchy.

    This question provoked me to look around for other resources and found this piece from a Melbourne firm: http://bit.ly/T7Du10 but I have to say I find it does little to persuade me that measuring staff performance is particularly helpful to the organisation. I’m intrigued by the suggestion the article makes that Adaptability is a good measure with particular reference to Tasks and Attitude to Change. What would be a good metric for “Attitude to Change”, one wonders? On what scale? A lot of other suggestions the article makes about measures for quality and quantity of output, for example, could easily be conducted as process metrics and tied back to data about whom was conducting specific operations at the times various metrics were observed.

    However their example about the tale of two code cutters falls flat for me – what happens when one programmer is being given all the tough jobs because s/he is smarter or more experienced than the one who is given the less-challenging jobs? Measuring output in lines of code isn’t a great metric, any more than measuring an author by number of words written in a period of time. Would the latter metric see the Gettysburg Address rated a “D”?

    There are tools available – I have one I use called the Integrity and Values Profile (see http://bit.ly/T7DNbW for more info) which is designed to measure a range of traits and attitudes as a pre-recruitment or pre-coaching benchmark. Pre-recruitment in the hands of a trained user, the profile can give important information that supports a hiring decision and gives the manager pointers on what additional questions should be asked about the candidate. Pre-coaching the tool gives pointers on areas that most need work. It’s self-assessed by the candidate, and is standardised and statistically validated across a large population of Australian managers. But a tool like this cannot be used monthly or quarterly to check progress – it should be used no more than annually, and then only if significant work has been done with the team member, otherwise it will merely come up with very similar results.

    There are other profiling tools, too, like DISC. And Myers-Briggs (don’t start me on that one…) All of which are designed to help you understand the person so you can get the recruitment decision right in the first place. Which, frankly, ought to be the focus of the HR Department, in my view, rather than attempting to insert itself into the business of measuring people in staff and line operations.

    I look forward to other comments.

  2. Elke Troosters says:

    Wherever in the organisation the person sits, we all like to hear praise when doing a good job. And if we are serious about our career development and personal growth, we should also be open to the bad reviews as well. Actually we learn more from the faults and mistakes we make than from a smooth run. In order for a line manager to give that priase or correction, we need to observe, gather feedback, measure performance.

    Because people or not machines where you can just measure output ratios in pure mathematical terms, we need to balance any pure analytical measures with the ‘softer’ (and more diffcult) elements like communication skills and stakeholder management. I believe the naked numbers can bring a baseline of comparitive performance to the overall review, if the measure has been chosen well. for example a programmer that can achieve the same result with fewer lines of code can arguably be called the better, more ingenious, programmer.

    How to measure the softer skills? Here is where the risks of personal bias and halo effect come in. The closest you can come to reducing these risks is by making the audience you ask feedback from as large as possible in terms of organisational hierarchy as well as number. Always place the feedback in the context of the personal relationship between the staff member and the person providing feedback. For example the Operations manager will not have had the same level and depth of interaction with the production scheduler as the shop floor supervisor has. So to try and nuetralise any bias and create a final performance ranking that is fair, it takes time and effort from the line manager! And this needs to be done for all people in the team.

    Time is usually most under pressure as the majority of line managers/supervisors are people managers as a secondary role on top of the operational role. Thus the exercise gets condensed with loss of quality and maybe in some cases loss of fairness as a result. But in the end we have a relative ranking of all the team members on the basis of which we can have a performance review and the yearly bonus is paid.

    This is the point where I believe the whole staff performance measure can be a help and a hindrance to the company. Although everyone is eager to hear feedback (praise and otherwise), some do struggle with the comparative aspect – particularly on the softer skills in the job. In staff performance we do not have a ‘phantom’ ideal employee against who they are all measured. Instead everyone is benchmarked against each other. When you come out on top and have the biggest bonus, that is a boost and you feel appreciated by the company. Where you are not the star pupil, although you may have felt you have really pushed the boundaries this year, and you have not received the full financial reward, you may feel let down by the company. The Staff performance measure stops being a personal development tool.

    It is the end of year again and we are indeed in the middle of the performance reviews. I still struggle to make it as fair, objective and nuetral as possible. I believe that if we did away with the bonus and year end reviews, but instead praised or faulted people as they perform their individual tasks as set out in their individual job objectives will have the same if not better motivational and performance effect. In this respect the talk of Dan Pink (http://www.ted.com/talks/dan_pink_on_motivation.html) does resonate with me. If we take the reward out of the equation, can we take staff performance measurement out as well?

  3. Pål Navestad says:

    There is some measurment on how well staff perform whatever way You see it. The problem is that any fair system is impossible. I think the oldfashoined rating in conjunction with employee conversations is the best. If You start adding countable or derivable measures it will fail. If the organisation is of a size > 50-80 staff some sort of system is always needed. Guided performance reviews using personal and departmental plans will always have problems but are fairer than any so called objective measure I have ever seen. The system become betetr if there is some transperancy and the staff performance is discussed in groups of more supervisors and peers. 360 degree evaluations can also work, but need a high etichal standard and an openess culture.

  4. Boago says:

    Hi Stacy. We have had this discussion before. At some time I was convinced that I could measure staff performance. But after a while I got to thinking,”What exactly is staff performance?” My organization is keen on grading employee performance. That is an easy thing to do. But does this number that we award tell us anything about the employee? Where the grading is low, does it say the employee is failing? Could it also be saying the organization is failing the employee?

    We are organizations that perform through collective actions of individuals. Can any one individual own a result? That is the dilemma that I find myself in.

  5. Philip D. Mann says:

    My short response for the day is that I am a firm believer in objective performance measurement across all parts of an organization. Although there is a lot of discussion in performance circles—and it certainly comes and goes with the times—about people “not being machines,” any organization is a system and each part of the system is included to provide some specific impact to the overall operation. Whether we are talking about assembly technicians or secretaries, everyone serves a purpose in the organization or they have no reason to be there. Each position in the organization has some list of functions or services that the incumbent must provide for the system to work properly, and the organization must know the value of those contributions for a variety of reasons including recruitment, retention, resource efficiency, and many more. However, I often see that the biggest problem with measuring staff positions in particular, is that they are frequently included in the organization without any clear intent to accomplish anything.

    That said, I believe the biggest reason to measure personnel performance is to understand the value and cost characteristics of key positions throughout the organization, including staff positions, and to have a solid picture of how changes in staffing ripple throughout the other, more traditionally measured areas of the organization. In the case of staff positions, the most basic measurement may mean determining the difference between the planned contribution for the position (i.e. what the position was created to do) and the actual contribution. If the expectations of the position change, you have to adjust your baseline for what you expect of anyone in that position—and I stress “anyone” being the fully competent employee that completely meets expectations without exceeding them.

    To paraphrase Douglas W. Hubbard’s “How to Measure Anything,” remember always that measurement is about reducing uncertainty around decision points, not to have absolutely perfect numbers for everything. Measure whatever you need to so that you can make sufficiently informed decisions.

  6. Mario says:

    1. Business goals and objectives achievement depends on how staff is doing their work. This in turn is connected with the KPI’s for the processes they are responsible for, e.g. Cost Reduction program, Customer Satisfaction, etc.
    Staff performance could be measured by using a sort of “mean” KPI representative of the above mentioned KPIs examples.
    The reason for that is to assist management to take some decisions such as rewarding them, to assist them with adequate tools/training, promotion or fire/replacement, and staff will know how they are being evaluated

    2. Some companies which I have worked for do not use KPI’s for assessing manager’s performance and when management has to evaluate their staff, (usually at year ending), they use a rather subjective approach.
    3. Some con’t would be that managers will focus only in the achievement of their performance KPI’s and could miss to look around other business opportunities-

  7. Jim Compton says:

    KPI’s CPV’s or any other math based measurement system is not appropriate for measuring people. There are too many intangibles with the human team building and interactions. There will always be top performers and bottom performers when measured in a mathematical system. This does not mean that the bottom performers need to be replaced or changed (although this may be the case in any individual situation).
    For example replacing the bottom performer just means changing who is perceived as the bottom performer. Likewise management needs to observe the dynamic of a team to see how a team performs. Barring situations like a production line where an individual’s quota or production can be directly measured, people need to be measured in how they contribute to the overall effort. I have seen firsthand how seemingly “lower level” team members become the glue that holds a team together, or motivates other to consider new ideas or processes.
    Measuring how a process or work flow functions is great, the same measurements shouldn’t be applied to people. One of managements’ main jobs is how to best integrate various people to get the best overall performance for both the company and the people. Finding the best aptitude or skill that each person brings to the job and best utilizing those skills.

  8. Stacey Barr says:

    Chris – your comments are so thoughtful and thought-provoking. That’s a great summary of the issue. After reading your comments about the two coders, I felt that it really is an important thing for us to use organisations and businesses as vehicles for development of people, so that we can have development of society. Everyone deserves opportunities to self-reflect, set goals and continually improve so their contribution can continually grow. Rather than putting the effort into thinking how can we measure all staff performance, it would be better putting the effort into the challenging question of managing those people who really do seem to be struggling to contribute in their work in a meaningful way, with a view to turning that around.

  9. Stacey Barr says:

    Elke, you make a FANTASTIC point about using objective information to celebrate our strengths and improve our weaknesses. THAT is a great reason to seek objective information about staff performance. But to do it for comparative reasons, to find out who is best and who is worst and how everyone else lies inbetween, I think is useless. Certainly not worth the risks it provokes.

    Perhaps the baseline for comparison ought to be the employee’s own goals, set within the context of the team and company goals? Perhaps the debate here should extend to paying bonuses, because that’s what seems to be the rationale for ranking employees. But there is so much evidence out there saying that financial bonuses are not linked with improved performance or morale. As you pointed out Elke, with the Dan Pink link. I LOVE your final question: “If we take the reward out of the equation, can we take staff performance measurement out as well?”

    When will we let our organisations mature out of the patriarchal (or matriarchal) paradigm where employees are the psuedo children and managers are the psuedo parents? Can’t we all be grownups, responsible for our own goal-setting and personal development and contribution to the organisation?

  10. Stacey Barr says:

    Boago, I agree with you: “We are organizations that perform through collective actions of individuals. Can any one individual own a result?” No, I don’t believe it’s possible for any one individual to completely own a result – they are affected by their colleagues, their manager, their tools, their knowledge, the organisation’s processes and policies, and so much more.

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