Managing People With Performance Measures: The Right Way and The Wrong Way

If you're not quite sure about the best way to use performance measures or KPIs to manage the performance of your staff, and uncover who's adding value to the business and who's not, you're looking at it all wrong!

There are two ways that performance measures link to staff performance:

APPROACH 1: Use performance measures to show staff which results matter most.

APPROACH 2: Use performance measures to show which staff are getting the worst results.

Let's take a closer look at each approach, because they are fundamentally different in philosophy and in practice.

APPROACH 1: Use performance measures to show staff which results matter most.

The number one reason why staff don't perform at their best is that no-one has ever articulated the results they were employed to achieve. Position descriptions are filled with role definitions, responsibilities and reporting structures, but rarely the intended results of the position.

Sure, some will talk about KPIs (key performance indicators) but usually these are expressed in action language, not results language.

Performance measures have to be based on clearly articulated results.

When staff are involved in defining and expressing those results, through a group dialogue, they get much clearer about why they turn up to work each day - to make a difference, not just do enough hours to get a paycheck. And when staff are involved in choosing measures to track those results, the motivation ramps up another notch - they start seeing how possible it is for them to make a difference.

APPROACH 2: Use performance measures to show which staff are getting the worst results.

When we try and establish performance measures to track how well staff are doing their jobs, we're constrained by the problems mentioned above: no clear results are defined for individual staff.

If we do come up with some measures anyway, usually those measures are too broad, and can be affected by other staff or circumstances beyond the control of one individual. Or those measures are too trivial, and simply subjective statements or A-B-C ratings of the individual's work.

Trivial measures of staff performance produce more fear and defensiveness than they do motivation to perform better. No-one wants to support a system that will rank them unfairly and trivially, and lead to them losing their job, losing financial benefits or losing face.

Most businesses simply don't have strong enough performance measurement capability to create meaningful measures of individual staff performance.

Which approach is for you?

If you haven't implemented the first approach to linking performance measures to staff performance, don't even bother trying the second approach! And if you have implemented the first approach well, you probably won't need the second approach at all.

As a manager or business leader, part of your job is to recruit the right people and to make it easy for those people to perform. It always comes back to improving your business processes in order to get better business results. You don't need performance measures to discover which people are simply the wrong fit for your business. And you don't need to humiliate them when you do.

TAKE ACTION:
If you have staff performance concerns, don't start measuring the staff. Start measuring the results that the business needs, and encourage staff to work in teams to find the best ways to achieve those results. Motivate your staff with a clear and specific vision of success that they can be a part of. Don't scare the living daylights out of them with the threat of a rank-and-yank performance appraisal.