Ideally for an effective performance management system supporting organisational productivity – it is recommended that the performance plan (KRA & KPI’s) for employees stay as objective as possible.
In most cases however, it is not really possible. This is more true in case of employees at junior management and frontline, as well for employees in small business, start-up’s where the work processes, functional processes are not adequately defined.
So, how do you measure performance?
- If your organisation has established process, systems that capture data at various transaction stages of activity related to a work are – check out if there is a possibility of generating some MIS from available data, and then try and establish relevant metrics that can be used to define performance.
- If nothing is available and processes are not there or not matured or automated enough – you need to start from scratch. For any activity or performance area – define a process – establish milestones – timeframes – outcomes. See if your performance gets reflected in timely completion, volume of outcomes, quality of outcome etc. Track the concerned and define metrics around the same.
Now, the above is easier said than done. It’s a simple concept. But bringing it to life in an organisational context means reasonable time and funds commitment, which is only justifiable in case there is adequate ROI from the exercise in terms of people and business productivity.
Even, if the processes are well defined and there is data around the process, converting the same in metrics that can be appropriately leveraged to assess performance and productivity could be an expensive activity.
In case the above approaches don’t work – what else ?
For some of your projects, performance areas – there will easily be timeline, delivery-based measures. These can be objective in a limited way. For the rest – try and eliminate subjectivity where ever you can. Keep track of key performance areas, completion status. For quality of delivery etc., you will have to depend on subjective assessment and feedback. Have an agreement with your boss / functional leader during the period of performance planning and establish performance standards, expectations and achievement levels. That should help.
While measuring and bringing a number orientation to almost every activity is possible (yes, it is – talk to us if your business needs help), one has to evaluate the need, relevance, and value created by the exercise vis-à-vis cost of setting up the processes & systems for measurement.
If the ROI, in short term or even long term does not justify development or improvement of a process and attempts at defining measures and collecting related data – it’s best to keep life simple.
Praveen is the Founder & Principal Consultant of KHEdge, a boutique HR & Business Process Advisory firm. Over last 15 years he has advised & worked with promoters, founders, business leaders, HR leaders in areas of - Business Strategy, HR Strategy, Organisation Design etc.