The Right Measure

This is the 3rd element of the 5Rights Wheel.

I shall start with what Peter Drucker allegedly said almost a century ago...

What gets measured gets managed.

That goes with people, too.

People need to be measured so that their performance can be managed.

A group of people find it's not politically correct and offensive that people are being managed.

So they've come with a counter quote...

People are to be lead not managed.

If this were true, how would you know if your leadership is having the intended effect if you don't have a set of goals?

And the instant you have goals or objectives, you'll have to manage the journey towards the goals. So, however, you want to dice and slice the issue, you're fundamentally measuring and managing people.

Who to Measure?

Short answer - Everyone.

Long answer - Every employee.

What to Measure?

Your measures are actual KPIs for each staff member.

• You should develop the KPIs that are relevant to the role.

For example, the CRO should have revenue and profit targets, but the CHRO should have other targets related to human capital, such as the speed of filling vacancies and the right fit.

• Ultimately, to ensure alignment of goals, the sum of every person who reports to the CEO should be 100%.
• Each target must also be weighted because the targets have priorities based on the company's strategy.

Back the CRO. Their revenue target could have a higher weightage than the profit target.

• Ideally, all goals should be objective, i.e., measurable. But in the real world, some goals may be challenging to measure. For example, how do you measure people living the organization's Core Values?

So, you can go for 70% measurable goals and 30% subjective. And that 30% opens you up to dispute since it's subjective.

• Finally, your performance management system should have a 5-point grading applied to it.

When to Measure?

Formally, the best practice is to conduct this at least twice a year: mid-term and end-of-year.

Some companies have tried to do this every quarter, but it becomes very taxing to formalize this frequently.

What Else?

In my interactions and observations with many organizations, I am shocked that many leaders conduct the measurements themselves without any input and discussions and definitely without communication with the employees, except at year-end.

The whole purpose of a performance management system is to provide timely feedback to your people so that they can improve and meet their targets.

What do you achieve when you communicate their performance level when the game is over on 31st December?

Ruminate on this...

That which is measured is improved. That which is measured and reported improves exponentially. - Karl Pearson

There have been negative thoughts about performance reviews, and some have proposed abandoning them.

Most people who oppose performance reviews voice the negative aspects of the process rather than the tool itself.

Rather than dumping the baby with the bath water, managers have to be trained to conduct effective performance reviews that empower their people instead of making them feel like losers.

Whatever you replace the performance reviews with, you will ultimately have to roll out measures to all your people and communicate with them about their performance status before the end of your fiscal year.

Bad Performance Review Story

In one of my previous companies, during the performance review period, every staff member looked forward to the fireworks that happened when the Managing Director reviewed the Head of Regulatory.

It always ended in a shouting match.

This was because too many of the Regulatory person's goals were subjective.

The amusing thing about these episodes was that the MD would be stressed out before the reviews, not the Head of Regulatory.

Kirkpatrick Model & KPIs Story

A few days ago, while conducting a strategy session for a potential client, I asked them what objective they wanted for their training.

They said every HR person will choose Level 4.

So, I challenged them on what they would actually do to ensure Level 4 was achieved.

They got it right when they said all participants must be monitored post-training to ensure they achieve their targets.

I challenged them further with what else needed to be done.

They were stumped.

So, I told them that the leaders themselves have to be given KPIs to achieve targets post-training.

Conclusion

You will need more than just creating goals and targets to affect your people's performance.

Your people's performance must be monitored frequently, and they must be helped to achieve or overachieve.

We'll examine how to do that in the next newsletter.