Performance management or progress tracking

What is the success rate of your organisation in meeting its monthly key performance indicators? Clients we have worked with fall in 3 different categories. Category 1 are founder led businesses, where usually (of course there are exceptions) the targets are so stretched that success rate against them averages below 70%. Category 2 are large incumbents where management is able to convince the board to set targets that are achievable, though they run the risk of getting disrupted. Success rate is usually 90-120% and most employees get their bonuses. Category 3 is where we enjoy working the most – organisations that set difficult, not impossible targets, and end up achieving 90%+ usually. I am going to share further in reference to Category 3 organisations, that’s where we have learnt the most from. What sets them apart from others is not only the target/objective setting process (which we have covered in previous points), but a very robust management infrastructure that is in place. This is a huge, powerful and deeply researched subject, and there are now choices available to make in different aspects such as the traditional balanced scorecard based KPIs vs. the fast growing OKRs (both are very old systems), bell-curve vs. power-law based reward & consequence management (debate made famous by Laszlo Bock of Google) and so on. There is more guidance available now on the future of performance management and agile performance management. Our is a modest experience and learning as such and I will state it in 4 parts, that we have witnessed in most category 3 organisations. Part one is setting up the key metrics to track performance of individuals & teams. These are very tightly linked to the strategic objectives of the organisation. Part two is data collection against the key metrics, making it as real-time as possible, so that meaningful action could be taken by teams & individuals. Part three consists of the cascade of reviews, feedback and coaching – aimed at making teams & individuals aware real-time as much as possible, how they are performing and where they can improve. Part four consists of the science and art of rewards & consequences and motivation. All 4 parts collectively define the robustness of management infrastructure in place for performance management. It often takes years of iteration to make each individual part serve its purpose and collectively the system to create a high-performance organisation. And this I find as a very compelling reason why the systems, processes and culture built by an organisation are sometimes considered an asset and intellectual property on how work gets done there. Learning #4 Ensure that the 4 part performance management system – key metrics, real-time data collection, nearly real-time feedback, coaching & reviews and rewards & consequence decisions, is working well to support the implementation & execution (Clue: start with assessing the success rate)

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