How do you make performance metrics fair?

One thing I have found helpful in aligning metrics to goals is spending more time in articulating the problem we are trying to solve to the larger team. Goals are the solutions but if there is a lack of understanding of the problem itself, teams tend to focus the metrics more on the effort instead of the outcomes. Better articulation of the problem leads to more specific metrics than ambiguous ones. Additionally breaking goals and metrics it into shorter milestones helps create more alignment as people can visualise the progress or course correct sooner than later.

In my experience performance metrics are important for any business and to help colleagues understand how they’re doing and their contribution. How performance metrics are used is the important bit. If league tables are created where people at the bottom are not well led that can create poor behaviours and/or people to leave. Metrics looked at in isolation only tell a small part of the story. Other factors need to be considered. A balanced performance, how performance is delivered, colleague and customer impact, experience etc. Metrics in isolation in the wrong hands can be very damaging.

Metrics should align with the individual's and the organization's goals. When employees can see a direct link between their efforts and the organization's success, they are more likely to view the metrics as fair.

Alignment isn't just about tracking performance efficiently; it's also crucial for team morale. When employees understand how their tasks contribute to organizational goals, they are more likely to be engaged and invested in their work.

Before aligning with the corporate goals and strategies, you need to understand what you are doing now. For example, in physical asset management the Bad Actor Pareto charts and bubble charts, the chronic failures highlighted will need to be fixed to reduce inefficiency. Regardless of corporate strategy this is a fundamental requirements, no matter what.

To have a fair metrics to measure our team, it’s important to get them involved to have a clear understanding of the tasks and the target in a measurable way with reference to their KPI and in alignment with the corporate goals. Involving them doesn’t means they will be the one to set the Metrics but know what are the indicator to deliver as part of the large team and this will increase engagement and boost performances, Likewise there must be opportunity for routine review of deliverables and performance not waiting until complete failure. Thanks for this insight

I would disagree with this. The team being measured needs to know what they are being measured on, the criteria for success, and the mechanisms of the measurement so they can focus on the problem areas. They don't need to choose the metric to be used, that will come from which areas the company needs to focus on.

Fostering fairness in performance metrics involves your team's voice in choosing them. Think of it as crafting a shared story. By inviting input on what truly matters and discussing metric options, you create a sense of ownership. These metrics, a blend of clarity and relevance, embody your team's unique value. Explaining how data will be collected and used for growth completes the circle of understanding. It's about co-creating a meaningful journey, where each member's role is acknowledged and celebrated.

Ensuring that the metrics we use align with the company's goals is really crucial. Based on my experience in HR, a proven approach involves encouraging a collaborative discourse between managers and employees. This interactive conversation takes us into the "how" aspect of achieving goals and the individual contributions of each person toward achieving these goals. By adopting this approach, organizations can secure buy-in across their workforce and foster a sense of ownership; as employees themselves participate in shaping these metrics. This gets everyone on board and kind of makes the employees feel like these numbers are their own, since they had a part in creating them. That makes sense, right?

I think buy-in is important. When your team feels heard and is able to contribute feedback and insight... if nothing more than to stress test the performance metrics and provide validation, they feel they have context. Commitment to the goal will usually be stronger if this is handled properly.

Metrics are critical indicators; tangible milestones of accomplishment and progress towards a goal. They provide participants with a sense of certainty and security en route. What does one do when disruptive factors, beyond the control of the travellers, affect their capacity to continue? "...adjust(ing) the metrics as needed...etc" may seem to be a rational response but it is fraught with risk. It immediately introduces uncertainty and relativism. To endure, your design of a PM system (and the attitudes of its participants) needs to be robust and flexible, to take into account and appropriately respond to, the risk and impact of such forces. If your PM system is not custom-built to be VUCA-proof, don't use it! Rather reward results.

Continuously nurturing fairness in performance metrics involves a steady rhythm of monitoring and adjustment. Think of it as a dance where your metrics move in harmony with your team's evolving needs. Begin by regularly collecting and documenting your team's performance data, using reliable tools. Then, create a bridge between reality and expectations. Compare actual performance to desired levels, spotting trends or deviations. Sharing this data with your team opens the floor to their insights, a crucial part of the performance dialogue. Lastly, let the metrics be flexible dancers, adjusting to shifts in goals, standards, and circumstances. It's a dynamic cycle that keeps your metrics meaningful and your team aligned.

If the metrics aren't measurable and highly visible, nothing else matters. Out of sight, out of mind will creep in. I'm a big fan of relentlessly tracking and measuring reality versus expectations. What is working well, what is not, what are we learning, and what changes and / or adjustments need to be made going forward that can accelerate progress. If you're not tracking and sharing the report card frequently (weekly is best), then gaining this insight will be very difficult.

Something to consider would be, think about it from a simplicity lens. Are there available metrics to suggest a small iterations cross the business or team-by-team? Questions to ask yourself: Do you need to make an iteration or are 75% of your employees satisfied? Do you need to change the system or it is a small change adhered to a small problem? What is the smallest change you can make to see a resolve?

The pathway to equitable performance metrics involves harnessing them for constructive feedback. Think of these metrics as windows into growth. By channeling them for positive feedback, you infuse them with the potential for progress. Imagine this: Regularly providing feedback that blends acknowledgment of strengths with insights for refinement, all grounded in the data you've gathered. This process nurtures a space for coaching, mentorship, and individual growth. It's about spotlighting achievements, guiding improvements, and creating an environment where accomplishments are celebrated through rewards that truly matter.

Performance metrics to drive feedback is super important. Don't leave things open to subjectivity, the vast majority of people want to do good work and exceed expectations. Performance metrics allow leaders to better help employees do just that. Use the good metrics for very specific recognition, acknowledgement, and praise. Use the metrics that need more focus as a a gateway to open the dialogue around how you as the leader can help by removing obstacles, providing guidance on an alternative approach, and ensuring there'a an accountability mechanism in place.

Metrics and measurements have changed a lot since the mid 1980s. Still, there are many pitfalls. a) Using the wrong source data. For example, a Time Utilisation Model is needed for delay accounting. These must come from an operational system. Drawing them from an ERP like (say) SAP causes problems. b) UNderstand what each indicator tells you. E.g. MTBF is a trend only. At an equipment level it is not going to tell you too much about what to fix or why.

Steering clear of the pitfalls that can undermine performance metrics is paramount to fairness. Imagine it as charting a course free from obstacles. Avoid the extremes of too many or too few metrics, which can muddy the waters or leave blind spots. Beware of vague or subjective metrics that can lead to misinterpretation. Ensure that metrics stay current and relevant, avoiding irrelevance or obsolescence. Watch out for any biases or manipulation that can skew results. Lastly, remember that metrics should never substitute for genuine communication, collaboration, and trust-building, as they're the anchors of equitable evaluation and growth.

This is precisely why the alignment step is so important. The stronger the execution on aligning performance metrics to organization goals, the less vague and / or subjective metrics you'll have. I would also recommend applying the 80/20 principle here to ensure you don't become metric-obsessed and it becomes a full-time job just to track your KPIs. The fewer, high-quality metrics the better. Keeping it simple enhances focus and improves execution.

While technology provides powerful tools to collect and analyze performance data, it can undermine fairness if used improperly. Metrics derived from technology should align with goals, not define them. Automated tracking should supplement human judgment, not replace it. Beware of over-reliance on technology metrics leading to dehumanizing "people analytics." Lean Six Sigma methodology dictates that metrics should be tailored to the specific job at hand, allowing everyone in the workplace to take action based on the metric that might be specific to them only if required.

I suspect we all have too many metrics and that the business in the main have defined them as important. They may well be but I also ask myself if the customer would feel they measure the right things. My suggestion is to establish the customers definition of quality and design metrics that sit around it.

While metrics based performance assessment is a tried and tested method, it is becoming increasingly obsolete as work is becoming more and more specialized. People work on multiple projects during the year as part of small specialists teams (even if the overall project team is large). The reality of these projects are vastly different and need people to gauge and use abilities based on the peculiar project/client needs. Same standard metrics undermines these abilities and rather focus on targets which are often not under individual’s control like utilization. An evolved performance mgmt. Should be able to appreciate the unique individual strengths (rating on multiple attributes?) and allow rewarding behaviours that brought true value.