...But be careful where you put the spotlight.
Do you have a performance management culture in your business? Are people held accountable for their performance? Do you hold yourself to account? As business owners or senior executives we also set the tone by what we deliver.
Are you a ‘learning’ organisation that consistently reviews performance and strives for improvement?
A balanced scorecard approach to measurement
Having clear financial goals is not enough. Work out the most important metrics for measuring the performance of your employees, your customer satisfaction, your operational delivery as well as having clear financial targets. Creating a long term sustainable business requires a clear focus on your people and customers. Then make the output visual, simple, accessible and current.
Are your measurements supporting your purpose, values and vision?
The ‘why’ is what makes your business unique. Think long term purpose and short term goals. Your vision and values provide the roadmap. Make sure that when you are setting your metrics they support rather than detract from your company goals. For example, if you want to be an ‘employer of choice’ what are your measures of performance against this strategic goal? Labour turnover, staff experience and retention are all key markers.
Make them relevant to your business priorities
A recent McKinsey article ‘Harnessing the power of performance management’ talks about how successful companies link employees performance goals to business priorities. People need to understand the relevance of their performance metrics to the overall success of the business and remember ‘less is more’ when setting goals. Even the best employee has a limit to their juggling skills!
Align day to day activity with business objectives
Having identified your key performance indicators you have just started the journey to ensuring what gets measured gets done. Having bold objectives is great but the achievement of such will depend on whether what your employees are doing day in, day out is aligned. Each function or department will have their own set of performance indicators (PIs) but they must support the business objectives and game plan. Create a consistent and uniform approach to reporting at all levels of the organisation.
Performance management framework
Having clear measures will not in itself drive performance. We now know the score but how do we manage the teams to put the ball in the back of the net! The rest is down to how your organisation inspires performance and the quality of management and leadership. Great companies get the right people on the bus and then have a culture of engagement where employees are involved, accountable, psychologically safe and celebrated.
Get started today
Start the measurement challenge today. The ultimate success is not just about having aspirational goals it is the ability to measure your progress towards achieving them on a daily, weekly and monthly basis. Be agile and be prepared to innovate where necessary but stay focused on your ultimate destination.