ASQ - Team and Workplace Excellence Forum

March 1999

Facing The Music In The Global Marketplace

Military Intelligence - Not An Oxymoron

Starting A Revolution Where Everyone Wins

The New Leadership Class

Let's Give Them Something To Talk About

by Peter Block
Sorry We're Closed: Diary of A Shutdown

Brief Cases
Business News Briefs

Views for a Change

Sites Unseen

The Quality Tool I Never Use

Book Review

Views For A Change

Dave Farrell answers:
I am delighted to respond to a question which goes so directly to the heart of an organization’s effectiveness. It has often been said that what gets measured, gets done. I recall hearing an employee say not long ago, “If management doesn’t measure it, they don’t really care about it”. Can you imagine a company not measuring revenue, profit or market share? These are among the fundamental metrics by which the business is valued. You can bet they are measured.

There is an important message in that employee’s comment. When you establish the metrics and commence measuring, you are sending clear signals to the people being measured about what is important to management, and therefore what should be important to them. So be careful of the messages you send; make sure they are the right messages and that they are aligned with your organization’s values, goals and expectations.

Since measurements have such potential for affecting behavior, they need to be balanced. Even a .400 hitter would be of questionable value if he or she only showed up for half of the games, or was unable to catch a ball. Hence, the increasing interest in “Balanced Scorecards” which define a diverse and balanced set of goals and only then identify the metrics for tracking performance against those goals.

A good portion of the work in engineering and software development organizations is project- driven. Many such firms require “value propositions” on each project for which funding and approval is sought. The value proposition defines expected outcomes and the economic value of each. They use the language of senior management: dollars. Unfortunately, many value propositions are sales puffery, “pie-in-the-sky” goals which are rarely measured and seldom met. A truly “leading practice” is to create meaningful value propositions, and to establish clear metrics with which to track each defined project outcome. With that foundation, one of the powerful measures of employee performance is their contribution to achieving the value proposition.

Leading practices regarding employee performance frequently start by distinguishing customer-related measurements from those that are internal and business focused. Customer-focused measurements are driven by identifying all stakeholders, internal and external, and establishing their needs and expectations. All points of contact are identified, as are what is delivered at each, and the customer’s needs and expectations regarding both contact and delivery.

Customer satisfaction measures should be included in the balanced portfolio for employees who have direct contact with external customers. For others, internal customer survey results, peer input to performance ratings, and objective measures of meeting agreed-upon specifications have all been used effectively to measure internal customer satisfaction.

As a Process Improvement Manager, you are quite familiar with the ways processes are measured. Many process measurements can also apply to employee performance. Consider these possibilities:
- effectiveness (quality)—improvement in meeting defined requirements, reduction in defects produced, waste or rework required, response times, progress toward error-free performance, etc., and . . .
- efficiency (productivity)—as you mentioned, output versus the resources used, but also reduction in the cost per unit of output, lowering of process cycle times to accomplish tasks, proportion of value-added to non-value-added effort or work products,
n adaptability—capacity for change, resilience, multi-tasking, additional competencies gained, range of projects contributed to.
Metrics for determining reward and recognition must also be carefully designed to stimulate or reinforce desired behavior. Consider the many organizations which espouse teamwork as a core value but have yet to find a way to identify or reward its daily practice - as opposed to formal team membership. In a recent article in this newsletter, I advocated measuring and rewarding “assists” as is done in basketball. Several ways to do that are to incorporate peer review in the performance measurement process with evaluation of the help that is received from others, or to require that project status reports always identify those not on the project who have provided assistance.
Engineering organizations typically place a high value on innovation and creativity. 3M, an organization highly regarded for innovative excellence has long included such measures as the percent of products or of revenue which is derived from products developed in the past three years. This is an example of qualitative performance metrics that have a direct and significant impact on the business.
With the increasing importance of knowledge as an organizational asset, measures of individual contribution to organizational knowledge bases are another excellent example, as are success in mentoring other employees. The latter can be measured either through surveys of those being mentored or by tracking their improved performance.

I’d like to close with two thoughts:
- pay more attention to rates of improvement than to the absolute values, and
- measurement without regular feedback is just another no-value-added activity.

Myron Kellner Rogers Responds

March '99 News for a Change | Email Editor
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