Performance Management

Many years ago I was contracted to do process re-engineering at a government department. Somewhere during this time I became involved in an ISO certification exercise for this particular department. Not having had much experienced with ISO implementations, I asked the project manager to explain to me in brief terms what ISO quality standards were. He responded with “document what you do and do what you have documented”.

That has pretty much become my motto for Revenue Assurance, and much broader really. This pertains to anything that should be documented. Business rules, business processes, system flows, system rules, you name it. Very often these are not documented which means we all do what we think we should, or are capable of doing given the uncoordinated chaos between systems and departments that is most often the norm.

It becomes difficult to assign and monitor KPI because you are not working from a known and agreed factor. Much like yelloware: firm enough to touch but not solid enough to hold. I have seen many first stabs at KPIs and these are based on gutfeel or general common sense things we should measure. These KPIs were not scientifically determined or based on any maturity index of the department or function’s capability and/or capacity.

I have recently spoken to a number of junior level staff, both in the RA field and other industries and disciplines on the topic of defining KPIs for their business functions (such as procurement and SLA Management) and their individual performance (how are they performance managed against the job’s KPI’s).

I was astounded to find that both the HR people I spoke with (1 was senior) did not see the relevance of the continuous string of interconnection between the organisation structure; to the job role (stating the role objective in context of the strategic and tactical plans); to defining the job outputs (those core responsibilities that would add the execution view to the strategy); to the KPIs to measure and manage the contribution to the organisation. A Balanced Scorecard was some academic thing that resides with the Head of Department and does not filter through to the job description. That means the performance management chain is broken.

I also found that all KPIs discussed with me assumed a process maturity of between 3 and 4. In other words, it assumed the processes involved in producing the output to be measured, or support processes to enable the output, are all in defined and managed mode. I did not find one KPI that was aimed at establishing a capability, as you would assign for a level 1 or 2 maturity. Needless to say, those poor individuals with these sky-high targets did not have the basic doing capability in place let alone the measuring and reporting capability. For some reason organisations assume that building the infrastructure and processes with which to run and grow the business are either in place or relatively easy to just do as part of the overall job.

It was quite alarming to realise how few individuals thought their personal KPIs had any relevance to any measurements that might be in place for specific financial or service related work they may be involved in. This I would put down to not speaking to an individual who had both a set of KPIs used for annual performance management as well as measurable and reportable work tasks, typically the stats you would find in a call centre, help desk or RA. The Customer Service and RA people I spoke with did not have a Balanced Scorecard and those individuals with a BSC don’t work in an environment where objective performance measure are taken.

I have seen this in telco and have tested it now at 2 Banks. Same mindset. There is a disconnection somewhere, a fragmented view on this complex whole we call an organisation. Yet, come financial yearend we are back to drawing up the new BSC because last year’s failed.

Am I seeing a connection where there isn’t one or have I just not seen this implemented anywhere?

Güera Romo
Güera Romo
Güera has many years of experience in business transformation in the engineering, defense, government, banking and telecommunication industries. She has experience in mergers & acquisition, rightsizing, re-deployment of personnel, business process re-engineering, system selection and implementation.   Güera holds a BCom Hon (Industrial and Organizational Psychology) degree and is currently pursuing a doctorate that draws on her practical experience of developing human resource capabilities within large corporations.

3 Comments on "Performance Management"

  1. Brilliant post.

  2. Avatar Mike Willett | 26 Feb 2010 at 5:26 pm |

    Hi Guera,

    I agree with your insights. Some issues of setting strong KPIs for individual employees seem to stem from trying to achieve balance across a number of different, and possibly competing, dimensions.

    Examples that spring my mind, some specific to RA, could be:
    – the need to collaborate within the team vs. the need to recognise strong individual performance
    – the need to find revenue growth opportunities vs. the need to provide assurance that a process is functional
    – the need to achieve team objectives vs. the need for the organisation to re-prioritise tactical initiatives that impact the delivery of objectives by different teams
    – the need to develop employees’ capabilities vs. the need to achieve quick results and so engage third party support

    With these conflicting undercurrents at play, is it little wonder that managers set KPIs for individuals that are ambiguous? And it is then less of a surprise that those KPIs drives arbitrary and situation-based employee behaviour, rather than behaviour orientated towards attainment of a defined, longer term strategy.

  3. Avatar Mark Yelland | 27 Feb 2010 at 12:03 pm |

    An insightful posting.

    It is not just at the lower levels that there is a disconnect between the individuals performance objectives, KPIs and the Balanced Scorecard.

    Three main issues:

    The lack of a logical tree down from the business requirements, through the organisational structure, down to the individual. It is amazing the number of people within an organisation that are performing above the level required (for pay review purpose), while the organisation itself is not hitting its targets – how can that be? Because the individual performance targets are set to please the individual and make them fee cosy and give them an unwarranted payrise! Did I hear someone mention banks here? ;-)

    The choice of KPIs at the top level are not reviewed and assessed for suitability on a regular basis – we used them last year so we will use them again. In ISO9000 there is supposed to be an annual review of the Quality Management System – most organisations simply look at the non-conformances and results of the audits (which are against what you currently have documented), without assessing whether they actually remain adequate and comprehensive. In manufacturing, where things are more stable, this approach might work, I have my doubts that it is appropriate for most telecoms organisations simply due to the amount of change going on.

    Thirdly, I don’t see much evidence that the Senior Management actually manage through the balanced scorecard approach. They have other sources of information on which they rely to make decisions. This creates the situation where the perception at lower levels is that if Senior Management do not use the information, then why invest time and energy in getting it right – chicken and egg scenario.

    So are we in the position whereby BSC and KPIs were the consultants ‘big thing’ during the 90’s, something that was sold as a good idea (which it undoubtedly is when implemented properly), but without giving the client the holistic understanding.

    And building on Mike’s point. I would like to see individual performance scored much like diving – a maximum score based upon the degree of difficulty, and a percentage score on how well that was achieved. This would mean agreeing low quality objectives and acheiving them would actually count for less than setting high quality stretching targets and failing slightly. Currently with no measure of degree of difficulty, the lower level achiever gets the plaudits, the high striver gets nothing.

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