Measuring organisational performance through Key Performance Indicators (KPIs) and then linking this information back to how individual staff are performing is a popular tool for many businesses to use as part of their performance management processes.
The phrase, “what gets measured, gets done”, which has been attributed to a number of different business brains, is a mantra that is often heard when discussing this subject. By using KPIs and having a clearly established set of metrics that are vital to driving business success, you can easily link them to teams and individuals to see how they are performing and contributing to the organisation. The targets and indicators will be different for each business and can be anything from volume of units produced in a set period, to the time taken to successfully respond to a customer enquiry. It’s important that the KPIs are set up correctly in the first instance to measure the right information and provide insight into what really matters to an organisation. Data for the sake of data is pointless. Furthermore, it’s crucial that staff understand the KPIs and are able to see on a regular basis whether they are exceeding, meeting or falling short of these targets. Some businesses will communicate the targets and performance indicators at weekly team meetings, others will have the figures available via a staff intranet or other electronic format like a dashboard report or the data might be printed and displayed on a staff noticeboard or even in staff toilets to ensure that they capture attention.
Where KPIs are used as part of individual performance management and objectives, information on progress and dealing with any issues should be regularly discussed. This can be achieved through informal check ins with staff or in a more structured way at 1-1s or specific objective review meetings. Where targets and performance aren’t regularly discussed they lose impact and staff lose engagement with them so communication is really important as it maintains accountability.
Of course, measuring everything that is done within an organisation isn’t possible and in fact it isn’t healthy or productive to try to apply a measure to everything. Back in the 1950s V. F. Ridgway wrote a paper on this subject entitled, “Dysfunctional Consequences of Performance Measurements”. This was long before data dashboards and reports but Ridgway absolutely hit the nail on the head in saying, “Not everything that matters can be measured. Not everything that we can measure matters”.
The use of KPIs in performance management when implemented correctly does have a place. Make sure that what is being measured intrinsically matters, that measures are clear, are understood and are well communicated but also don’t make KPIs the be all and end all. They are part of the bigger performance picture and you’ll only know how well someone is performing by stepping back and taking a holistic and well rounded view.
Do you have questions about Key Performance Indicators?
Give us a call at CUBE HR on 01282 678321, we’ll be happy to advise you and we have policies and templates available to meet every HR need.
Why not check out our blog on a similar topic 360 degree feedback.
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