How Do We Build Performance Indicators?

When most people say “performance indicators,” they do so in hushed tones. They are right to do so; poorly designed performance measurement systems turn people off and often negatively impact the very things they were designed to improve.

Fortunately, developing indicators that drive productivity, quality and engagement isn’t hard to do. Here’s how:

Design for success. Start with the premise that you will design each indicator to focus on people’s improvements, rather than their shortcomings.  While shortcomings will be obvious, if the indicator feels negatively spun, it will be dead on arrival. Focus instead on progress; how people improve their results over time. If people feel “big brother is watching,” they will quickly learn to game the system, if they play at all. If they perceive the indicator as an opportunity to celebrate growth and development, they will be much more likely to embrace it.

Assemble the team. Select a small group of people, including incumbents in the jobs to be measured, to participate in the “success measurement” development project. A facilitator should be chosen to ensure the process runs smoothly, input from all is heard and ensure communication to stakeholders outside the team.

Understand job content. Interview key internal customers of the role(s) to be measured to determine what they are getting (current state) from them, what they want (future state) and specifically how any proposed change will assist in meeting organizational goals. This step sometimes spawns job or process redesign to adjust the work to be done to the true needs of the customer. While this takes more time than just putting together an indicator, it is worthwhile. There is no value in measuring work that shouldn’t be done or isn’t critical to goal attainment.

Select outputs to be measured. Select two or three of the most important work outputs required of each role to be measured. Selecting more than this number can complicate administration and reduce focus. If you have more outcomes you’d like to measure, try moving to new measurements over time (every six months, when desired progress have been attained, etc.).

Develop measures. Carefully define what will be measured (i.e., when a benefit form input is complete enough to be counted as complete); how it will be measured (unit of measure, how, when recorded, etc.); what reporting will be done; and how, when, and what to do with questions on performance measurements. Document these decisions for future reference.

Ensure the system can be administered. Set up appropriate ways to capture data and generate reports. Many performance measurement systems fail because no one clearly thought through the process and time commitment required.  There is an inverse relationship between the time it takes to develop and report on data and measurement success. Carefully match the data capture and reporting to the work to be done, time available to do it and the value of the reporting. Data that can be easily aggregated and reported by the person being measured often work the best; let them keep score on a daily basis, if possible.

Sell the system. Finally, you need to prepare for a good performance measurement system launch. Plan communications to ensure that people understand the why as well as the what and how of the new measurements. Meetings with employees, in addition to written correspondence, tend to reduce stress and increase buy-in. Remember, the better people understand how the new system will contribute to their opportunity to demonstrate growth, the more likely they will fully appreciate and participate in the program.

SOURCE: Rick Galbreath, SPHR, Performance Growth Partners Inc., Bloomington, Illinois.