When Performance Measurements go Wrong

Are your performance measurements limiting your teams performance?

Performance Measurements

The old adage still holds true, what gets measured gets done. Can you imagine what the outcome would be for a business if the wrong things are being measured?

In over 25 years’ experience helping businesses to improve performance I have found that it is still surprisingly common for organisations to be measuring the wrong things and focusing their team’s effort on achieving the wrong goals.

While their teams are focused on the wrong goals they are distracted from the work that adds value. In the worst examples I have seen the wrong performance measurements drive bad business practices that directly impact bottom line performance.

In one example a newly appointed executive, who was tasked with driving down labour costs, only measured head count in his loan processing team.

The workload in his teams would fluctuate by 50-100% (generally a customer reaction to interest rate changes). When work volumes increased his managers initially responded by bringing on more resources to manage the increased work volume. However, the additional resources lead to the managers not meeting their head count target and they received a poor performance rating.

His managers quickly adapted and learnt not to bring in extra resources to manage the higher work volume; interestingly the resulting poor customer service was not a performance metric.

His managers became frustrated and felt disempowered to do their jobs and their employees were frustrated and stressed by their workload and the increasing customer complaints.

Through a change program the executive shifted his performance measurements from “head count” to measuring “cost per unit throughput” and “service level to customers”

This change in performance measurements  empowered his managers to meet customer expectations by varying  resource usage in response to fluctuating workloads. This empowerment removed the managers frustration and resulted in the employees being less stressed.

With some additional coaching the team managed to reduce processing costs by over 240%. The change in performance metrics achieved a significant reduction in head count, improved employee engagement and empower his managers to deliver results.

Are the metrics in your business driving the performance of your business, empowering your managers and lifting employee engagement or are they hampering your business performance?

Consulting Australia

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Ian helps leaders to motivate and inspire their teams through a combination of developing strong operational management systems aligned to your strategy and a focus on leading people using techniques that we know improve employee engagement and lift team’s performance by between 30% and 220%. To find out how you can benefit from Ian’s expertise select the “leading for performance button” and begin your journey to higher performing team.