The Human Dimension – The Forgotten Element of Performance Measurement (PM)

The Leadership Driven Method to Performance Management can help senior leaders in the public and not-for-profit sectors make informed decisions and meet their strategic goals. 

Today’s post is by Bryan Shane and Patricia Lafferty, authors of THE LEADERSHIP-DRIVEN METHOD TO PERFORMANCE MEASUREMENT: The How-To Book on Improving Performance Measurement In The Public And Not-For-Profit Sectors (CLICK HERE to get your copy).

While many articles and approaches focus on the science of Performance Measurement, meaning the step-by-step methodology, and the business processes required to analyze, interpret, report, and the quality of performance measures, this article will focus on the human side or the art of performance measurement.

What are the requirements for employees to fully participate and effectively use the PM System?

The first requirement is to understand the context of performance measurement. In other words what is a Business Plan and why is it important to performance measurement. Well, the answer is easy. The Business Plan provides the strategic direction of the organization in terms of its vision, mission, and objectives. It also provides a framework for decision making so that all decisions support the achievement of the strategic direction of the organization. But, in order to be effective each employee needs to know where they fit and how they contribute to the organization in terms of their function and daily work. Also, the Business Plan provides the standards against which the performance is measured. Without understanding the purpose and their fit within the business plan, the staff member has no context to understand the need or benefits of PM.

So, what is PM?

The next requirement is to understand performance measurement. The most frequent misunderstanding is that it is performance appraisal. It is Not. Many people confuse performance appraisal at the individual level with performance measurement at the organizational level. These are distinct concepts. A collection of individuals working as a group in an organization can achieve dramatic results. But no one person at any level, is responsible for overall organizational performance in isolation from their peers. Dispelling this myth makes performance measurement an innovative and positive force for creativity and achievement.

For our purposes we will define Performance Measurement as a management system – an ongoing process that provides a balanced, methodical attempt to assess the effectiveness of an organization’s operations from multiple vantage points – financial, client satisfaction, internal business and innovation/learning. It is used to provide feedback at all levels – strategic, tactical or operational – on how well strategies and plans are being met. This performance information is necessary to improve decision making within the organization, to enable proactive problem correction and to promote continuous improvement.

Why bother with Performance Measurement?

Performance measurement provides a framework for decision making to:

improve resource utilization,

demonstrate accountability,

facilitate excellent programs/services,

ensure motivated and productive employees,

enable a high level of employee client cooperation and coordination,

allow for the use of innovative best practices, and

provide the ability to deal with unexpected challenges or emergencies.

In short, it is a navigation system that helps management and staff adapt their operations to meet the goals of the organization while adjusting processes to the ever changing requirements in finances, programs, client needs, etc.

Organizations are constantly bombarded with ongoing changes to their finances, personnel, strategies and initiatives. Their external environments, especially client requirements and economic and political changes, are also in constant evolution.

So how does an organization move towards its strategic direction as outlined in its business plan when the foundation upon which it was built keeps shifting. The answer is the PM System. It acts as a navigation System allowing the organization to steer around the changing shoals of business.

How to break down resistances to a threatening project?

A performance measurement system can be perceived as very threatening to staff. In order to break down resistances, a process-oriented approach should be used. This process-oriented approach to developing and implementing a PM system ensures its acceptance through a gradual process of change in organizational culture. Stakeholders begin to understand that the focus is on identifying and dealing with issues that are interfering with attainment of the organizational mission, linking business plans with operational decision making, and on identifying and rewarding achievement within the organization.

As the development process continues, stakeholders in the organization shift their attitudes from awareness to understanding and from acceptance to use of the PM system. Over time this approach allows the development of an organizational culture that values and supports balanced and comprehensive feedback as an essential element in both rewarding achievement and providing the information necessary for effective business and operational decision making.

Is there a code of conduct used to develop and operate the PM System?

Organizations often make decisions based upon an implied set of values. The challenge of this approach is that implied values or principles can be misunderstood or misinterpreted. The LDM (Leadership Driven Method) approach to performance measurement requires that principles be defined, stated and communicated to the entire organization. These principles provide a code of conduct that govern behaviour for the development, implementation and operation of the PM system.

There are numerous techniques that gradually reduce/eliminate resistances and increase ownership of the PM system, the most important being ongoing leadership. Senior management must be directly involved and charged with communication to promote understanding and acceptance and provide financial support. These interventions create a climate of acceptance within the organization by stressing the importance of performance measurement and the need for staff to participate and cooperate fully in this endeavour.

Bryan Shane and Patricia Lafferty are the authors of THE LEADERSHIP-DRIVEN METHOD TO PERFORMANCE MEASUREMENT: The How-To Book on Improving Performance Measurement In The Public And Not-For-Profit Sectors. They are also co-founders of BPC Management Consultants, a client-centered, management-consulting firm based in Ottawa.

For more information, please visit www.bpcgallery.com.

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