Performance measurement can basically be considered as an effective way to assess and review progress against preset and intended objectives.
Especially when measurements are, broadly speaking, applied to human performance and, more specifically, considered part of a Performance Management process, measuring performance should not be used to decide how to reward people (Armstrong, 2006), but it should not be used to penalise individuals as well.
Performance measurement, as a valuable element of performance management, should rather be considered as a means enabling managers to appropriately and consistently engage a positive and constructive communication process with their staff. As such, performance measurement can be considered as an effective management tool, not in that enabling employers to exert a more strictly and invasive control over their staff, but rather, in that helping individuals avoiding to fall into the trap of: “if you do not know where you are going, you will end up somewhere else”.
Good reasons to measure performance are provided by Anon (this quote is attributed to several Authors, but Anon seems to be the most likely to have actually pronounced it): “You cannot manage what you cannot measure” and Kelvin (1883): ”When you can measure what you are speaking about and express it in numbers, you know something about it”.
Since individuals’ goals are set in order to enable organisations to achieve their objectives, and that is why individuals’ objectives are aligned with organisations’ goals, measuring individuals’ performance can be indirectly considered as a way to also track and identify an organisation’s progress in achieving its objectives.
Measuring performance, enabling managers to assess and review the reasons for individuals achieving or not achieving, fully or partly, their goals, could also turn to be an effective and valuable means to identify the kind of support individuals might require in order to perform better. As such, performance measurement can also be considered as a means providing individuals with opportunities for growth and, as suggested by Armstrong (2006), as a solid and consistent basis to provide and generate feedback.
Inasmuch as a specific approach – e.g. SMART – is extremely important to enable managers to effectively set goals, a specific performance measurement method is also important in order to consistently and reliably measure performance.
More specifically a performance measurement system should be based on measures which are CORAL:
- Clear, relevant and widely understood;
- Owned, managed and shared by the relevant managers;
- based on a Recurrent Relationship between managers and individuals and, where applicable, on reliable and relevant data;
- Able to encourage individuals’ improvement and growth;
- Linked to an organisation’s goals.
Performance measurement should be designed and planned in a structured way and should essentially be based on four fundamental stages linked one another by sort of a cyclical process.
Performance measurement’s cyclical process
Once goals, aligned with the organisation’s objectives, have been set and agreed, for instance by means of the SMART method, the second stage of the process should be directed to identify and devise the metrics by means of which individuals’ actual achievements will be compared with the desired and preset goals. The reference here is to the so-called “outcome metrics” i.e. to those kinds of measurements referring to results which cannot naturally and immediately quantitatively be measured. The outcome metrics approach, very practically and pragmatically, consists in determining and identifying for each goal set the most appropriate way to measure it. To put it another way, once a goal has been set, the outcome metrics approach requires that a question is given to the answer: what has to be measured to determine if these objectives will be attained (DTI, 2008). Sometimes measuring goals may reveal to be an even harder than expected feat in that objectives have not been fixed according to the SMART approach and/or because goals are actually inconsistent with, or not critical to, the organisations’ success.
Although effective, the process required to define outcome metrics is not completely smooth sailing, in other words it is not about a quick and effortless approach. After all, it is, in fact, applied to all of those cases in which performance cannot quantitatively be measured, i.e. in those cases in which measuring results might turn to be particularly difficult to attain.
In order to be effectively and consistently designed and implemented an outcome metrics system requires that, first of all, driver metrics are identified, i.e. all of those factors which actually have an impact on the achievement of the identified goals (DTI, 2008).
A good approach to this method could be that to hold a brainstorming session directly with the interested employee(s) in order to write a list of drivers and subsequently deciding which, amongst them, are actually the most relevant and could have the greatest impact on goals achievement (DTI, 2008).
This method will enable businesses to more effectively implement the performance management process in place within their organisations. The brainstorming session will, in fact, represent a great opportunity for managers and individuals to communicate and to constructively discuss about one of the most important aspects of individuals’ work, its scope. This will also surely enable individuals to have clearer ideas about their role and the importance of their contribution to the attainment of the business’ objectives.
Individuals will gain awareness of the importance of their work and of the fact that the organisation is expected that their contribution will have an impact on the overall organisation performance, and that this is one of the most important reasons, arguably the only important reason, for managers measuring their performance.
The third stage of any performance measurement system should be directed to review and analyse performance in order to identify, by means of the metrics system which has been devised, if any gap between desired performance and achieved results actually exists.
The fourth and final stage will be obviously directed to identify and agree with individuals concerned the kind of support, training and coaching necessary to bridge eventually emerged gaps.
The process, as anticipated above, has to be intended as a cyclical one, that is as a process which has to be constantly executed by managers and individuals and which has to be restarted anew once objectives have been achieved, modified, added or cancelled.
Performance management, establishing a constant communication process and maintaining an ongoing link between managers and staff, will be perfectly suitable to enable organisations to keep this relationship between managers and staff active and help both employees and employers to achieve their objectives.
But not everything can be measured according to the traditional mean of the verb, it is said that there was a sign hanging in a wall of Albert Einstein office saying: "Not everything that counts can be counted, and not everything that can be counted counts".
In order to mitigate and possibly completely overcome problems usually associated with measuring performance, which is typical of those cases in which performance is expressed by activities which cannot quantitatively be measured, making a clear distinction between the two forms of possible results: output and outcome, will surely help.
Whilst outputs is the component of a task’s result which can be immediately represented and expressed by quantitative measures, outcome is the result of a job or task which, although producing and generating visible effects and results, cannot quantitatively be measured (Armstrong, 2006). This distinction is, indeed, of paramount importance and should be duly considered throughout the process of defining and assessing objectives and performance.
Many tasks and activities, in fact, produce results which are not quantifiable; nonetheless they undeniably produce results, or rather, as we have defined them, outcomes.
Outcomes are indeed measurable and the way to measure them is to compare outcomes actually achieved against the previously set, agreed and expected results. Outcomes will clearly be identified in qualitative rather than quantitative terms, as could be the case of determining a competency level to be attained (Armstrong, 2006), improving an internal process or procedure, or delivering a determined level of service.
When determining and agreeing objectives with individuals, then, it is important not only identifying compelling goals enabling the organisation to achieve its objectives, but also to clearly identify how the attainment of those goals will be assessed and measured.
In all of those cases in which we are looking at outcomes, i.e. actions whose produced results cannot quantitatively be measured, what managers should clearly identify is not the kind of unit most suitable to measure results, but which outcomes actions should actually produce or what essentially should they cause to happen. Of course those expectations have to be agreed and clearly understood by individuals in order to avoid that what a manager is expected to happen could be misread by individuals. The risk being that individuals would go towards the wrong direction, persuaded it will enable them to successfully attain their objectives, pointlessly wasting their energies and efforts.
In general, defining what the output has to be and what a job or task is expected to deliver is not enough, managers should also determine the extent to which the expected target has been achieved. More precisely, it should also be determined in which cases and in which circumstances or, to put it another way, what should happen, in order to consider that the expected output or targets have been met, exceeded or, eventually, not attained at all.
Whatever the case, when setting objectives, especially when they are expressed and agreed in the form of outcome, clear definitions of the criteria used to measure results are of pivotal importance. Things do not work differently when in the performance assessment process also input and behaviour come to play. Also in this case, in fact, a clear definition of expected behaviour needs to be provided in addition to the description of examples of what good behaviour (and possibly also bad behaviour) are considered within an organisation and how they will be assessed.
When assessing inputs, the reference here is to the knowledge and set of skills and competencies gained by individuals, competency frameworks and statements of core values available within organisations will clearly turn to be particularly useful (Armstrong, 2006). In this case, in fact, the “metrics” against which measure the effectiveness and consistency of attained results could be devised considering the standards included in these documents.
It could be concluded, as suggested by the CIPD (2011), that in order to organisations effectively and properly manage performance, these need to thoroughly inform and make aware individuals of the basis and principles on which their performance will be measured. In order to inspire integrity, sense of belonging and ultimately engagement within the organisation, the measures identified to assess performance should be transparent and applied fairly across the organisation.
Ideally, businesses should resort to a mix of individual and team measures and use a set of measures relevant to both inputs and outputs (CIPD, 2011).
Performance measurement, nonetheless, should not be completely considered substitute for analysis and judgment. In order to find out what actually did not work properly and why individuals could not achieve their goals, a thorough and detailed analysis of the means, resources and procedures which were actually used would clearly be required. “What gets measured gets done, and what gets recognised, gets done best” (Oregon Benchmarks, 1996).
Longo, R., (2011), Measuring performance, HR Professionals, [online].
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