Why Performance Reviews Based on Individual Efforts Are a Waste of Time

Feb 5, 2019

In the final analysis, no one cares about your effort, results are all that really matter in business. That’s why I think Performance Reviews (Based on Individual Effort) are a waste of time. Of course, every company must operate at the highest level of integrity. I’ve written countless articles the topic in this column. I believe that integrity is the bedrock on which a business is built and flourishes.

My point here is simple: your customers and other important stakeholders are not interested in understanding the level of difficulty required to delight them – they just want to be delighted. Delight them and your business grows, disappoint them and your business fails.

The message is clear. We should stop applying metrics that measure individual effort and place an unyielding focus on the establishment of measurements that lead to desired results. As we do, business outcomes will improve. Here is why:

You see, when you start to track desired outcomes (instead of each person’s individual performance), your team will begin to recognize ways to improve its execution. That’s not to say slackers, now, have a place to hide. Rather, staff will learn how to keep one another honest. When they can’t, you will certainly hear about it and that will be your cue to address an individual’s specific behavior.

Here are some steps that you can take to get started in transforming the ways in which you measure performance:

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Measure for Outcomes, Not for Outputs

For example, I’m working with a client who has made “do whatever it takes to delight the customer” the overarching goal for everyone in the organization. Consequently, the firm is recasting its metrics to better align with this goal. For instance, a standard measurement like, “the number of complaints handled per month per customer support person” is being replaced with “average time to complaint resolution.”

While subtle, the difference is hugely important. The desired outcome is to resolve customer problems quickly. It is not to handle more complaints in a day. The metric now reflects this fact. Be sure that your metrics reinforces expected outcomes, and doesn’t simply count how much is being accomplished in a workday.

Provide the “Why”

This was critical to achieving the business results that my client was seeking. We had to help staff understand “why” putting the customer first was essential to business growth and maturity. Once the reasons were well understood by her team, my client could encourage her team to participate in identifying the best path to get to the outcomes that mattered most and to devise the right measurements to track achievement.

Let the Performance Measurement System Fade to the Background

Once measures are properly aligned with desired results, the need to use a system to track performance isn’t half as important to improving an individual’s performance as is providing hands-on coaching and additional training and development. So, let the performance system take a backseat. Instead of worrying about filling in the systems tracking forms, encourage your leaders to regularly coach and teach their teams. The performance system can become a place where meaningful leader/staff interaction is recorded for posterity.

To close, measure for results, not performance and you will see your business outcomes improve. Reshaping your performance measurement criteria in this way will not only simplify your performance tracking systems, but will enable the delivery of better business results. For the measurement of a specific individual’s effort is often far more challenging to quantify than the business results by a team.

Note: Content Originally Published on inc.com: Jan 18, 2019

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