Why do YOU Measure Performance?

November 15, 2011 by Stacey Barr

Management gurus like Peter Drucker have long since put to bed the idea that measuring performance really does improve performance significantly more than if you don’t measure. But this isn’t the reason driving most people’s participation in performance measurement. Let’s look at a few of the most common reasons, and see how compelling they are.

CYA

Reason 1: Because you’re supposed to.

We’ve been told to have performance measures by our managers. The Strategy Office expects us to come up with some KPIs to go in the KPI column in the business plan. Everyone else seems to be measuring stuff so we probably should too. Let’s just get it done and over with as quickly as we can. What data do we have? Maybe we can throw a few KPIs together real quick…

It’s little wonder then, that to many people performance measurement always feels like another corporate hoop to jump through that takes up time they should be spending on their “real work”.

Reason 2: To CYA (cover your arse/ass).

Show you’re doing lots of work, doing good things, getting heaps of stuff done. Then maybe managers will stop changing things on you all the time, or stop putting pressure on you to work harder, work smarter, streamline this, reengineer that.

All you have to do is to find a few measures that always have positive trends and show how well things are going. Measurement drives behaviour, so where do you think people will prioritise their time and attention when they measure the things that are easy to improve?

Reason 3: To manage staff performance.

Everyone has some KPIs in their performance agreements. And targets. That should make it a lot more objective to work out who’s performing and who isn’t.

And so staff quickly adopt Reason #2 for measuring performance. What happens to overall company/organisational performance then?

Reason 4: To negotiate for more resources.

Demonstrate how worthwhile your outputs are, how capable your team is, how super things could be with more funding. No-one likes having their budget cut. Think of all the cool projects that you won’t get to do if you lose resources.

Funny though, when we give more resources to things that are working, and deny resources to things that need help to be improved.

Reason 5: To monitor strategy execution.

Make sure that the strategic initiatives are being implemented as planned. We have 57 strategies, and they all matter. We need to be sure we get them all done.

Perhaps this is why so many organisations have so many of what I think is a completely useless type of performance measure: “the milestone”. But people will argue until they’re blue in the face that reaching a milestone for a project or initiative means that performance must be better. How so, exactly?

Reason 6: To achieve targets set by the strategy.

Focus on how far current actual performance levels are from targeted performance levels, and using cause analysis and process improvement techniques to find good ways to lift current performance levels until they “hit the targets”.

When most people in a company or organisation have this reason for measuring performance, I’d describe it as a continuous improvement or results-oriented culture. It could be a very energising place to work.

Reason 7: To continually improve capability to achieve the organisation/company vision.

Every performance measure has a line of sight to the results implied by the mission or vision. Targets are set to guide resource allocation, but innovation means the targets are often exceeded. Business experiments quickly identify the best ways to achieve or exceed targets. Organisational learning and systems thinking ensures people are focused on the most elegant ways to improve performance.

Imagine turning up to work each day, knowing that virtually everything you and your colleagues were going to do was verifiably contributing to making the world a better place?

Reason 8: ???

I’m under no illusions that there are only seven reasons people associate with measuring performance. Who knows how many there are? But I am very interested in YOUR personal reason for measuring performance. Let me know by commenting here on the blog post for this practical tip.

TAKE ACTION: It might be a good conversation to have with your colleagues: why do you measure performance? What are your reasons? Why do you bother? What value comes from doing it? What value should come from it? How can your approach to performance measurement improve, so it can better fulfil this purpose?

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  1. Tony Delaney says:

    I agree with your comments in the article above,especially point 7, and would add that there is one more fundamental reason for measuring performance, and that is to improve the business by motivating and engaging the staff.
    The way to do this is to set corporate and personal KPIs and reward staff for over achievement of these. By setting KPIs, measuring results against business improvement and rewarding exceptional behaviour, you can inspire, motivate and engage staff to work “above and beyond”, while delivering a return on investment.

    Reward programs don’t have to be expensive. In fact if implemented effectively they should be funded out of the improvement to the business.

    What better reason is there to manage performance?

  2. Stacey Barr says:

    There is a lot of evidence that rewarding staff can easily backfire and cause less engagement and less improvement for the business. It’s hard to objectively measure individual contribution to the achievement of results that are almost always impacted by many individuals and teams.

    There are better ways to engage and motivate staff without measuring and rewarding them. One of those ways is to help them see the results that are most important for the organisation and link what they do to those results. An environment of collaborating, continuous improvement, and learning is much more successful than an environment of individual reward and competition.

    But if anyone has any research that shows how individual reward is the best way to motivate staff, I’d love to read it!

    • Paul Reader says:

      I have to agree that reward and competition is potentially more effective for the majority, having worked for a time in such an environment here in Australia. There is a small percentage of workers who thrive (at least for a time) in such an environment and a number of companies actively filter the workforce to employ such people discarding them as performance inevitably drops or promoting overachievers into supervisory positions to which they are unsuited. Such organisations have enormous turnover rates and rarely consider alternative models because they are afraid of short term losses.

      • Stacey Barr says:

        Paul – and that’s so funny because they probably aren’t counting the longer term losses of employment costs and low company culture and missing the synergy of collaboration.

  3. Stacey Barr says:

    In case it’s not obvious, I’m in favour of reasons 5, 6 and 7. But not at all in favour of reasons 1 through 4.

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