Performance measurement programs must be modernized in order to effect behavior and motivate staff. Older measurement practices attempted to measure every step in a process and often added overhead to the execution effort. Many existing programs, in fact, are characterized as being convoluted, time-consuming and prone to providing misleading information. Of course, if an organization undercooks its measurement practices it should skip using them at all because weaker programs will make no material change to business results.

That said, the preferred approach is to design a performance measurement program that places emphasis on the "big picture" and bases all staff measurements on desired outcomes as translated from the organization's long-term vision and strategic plan, and, not be one intended to institute measures for every incremental step that encompasses every business process.

If a leadership team takes this advice, it will "right size" its performance measurement program--producing a system that is simple to use for management and staff, alike. Further, instituting a program that measures results, and, not effort, will likely drive more extensive business transformation because staff will be better motivated to change the way that they work in order to deliver the business results that garner reward. As a result, greater overall organizational alignment is achieved because succeeding transformation will be aligned with the desired results that came from the vision and strategic plan of the enterprise.

Here are four tips to consider when designing your performance management program:

  1. Make It Real Time--the performance measurement program must be able to capture and measure performance information as the work is performed;
  2. Place Emphasis on Strategy and Vision--put into place a measurement system that monitors the skills and performance levers that correspond with where the organization is going, instead of where it has been;
  3. Commit to Requisite Training--if you want to raise the performance bar, you must be willing to invest in your people by training them to think and work better;
  4. Reward Results--nothing reinforces desired behavior in someone than being rewarded for it (think Pavlov's dog). Be sure to recognize, celebrate and reward outstanding performance.

Indeed, driving the performance program design from a "desired results" viewpoint helps to define what is important to the business and focuses staff's attention on the work and behaviors that matter most, and de-emphasizes focus on the pro forma activities that seldom make a difference to the bottom-line.

Yes, we, as leaders, will still need to set individualized expectations to ensure that every team member understands their specific responsibilities and are intimate with management priorities. Once that is achieved, the performance measurement program should yield more meaningful results and lead to better business performance, over time.

Published on: Feb 9, 2015