By Sherif Attar
In a world of ever-changing ambiguity and uncertainty, executives have to face two challenges: excellent performance and people development. Where many managers think those endeavours are “competing”, this author believes they are “completing”. GET DOWN TO BUSINESS argues.
Adapted from Tomas
Chamorro-Premuzic & Ben Waber
Reliable, accurate, and bias-free measures of employees’ job performance, key to managing performance more fairly, is notoriously elusive. Indeed, despite ubiquitous tech tools, visualisations and dashboards, reliable quantification of workers’ value creation remains as distant from real-world management realities today as it was 40 years ago!
Despite clear advancements on the tech side, and some undeniable achievements in data science, there is still a large gap between workers’ output and their career success, status, or seniority. Ask any organisation to identify their top employees and to prove their selection with hard evidence or data, and they will look at you perplexed. In most organisations, success is more likely a reflection of winning a popularity contest than contributing to organisation’s success.
To overcome this problem, one first needs to identify what constitutes real, meaningful performance, tying to the high-level goals of the organisation. This means creating a continuum of performance metrics from individual employees to teams, divisions, and the entire company.
Quantifying the theoretical
A common reason for this organisational deficit is that job performance, defined as an employee’s contribution to organisational effectiveness, cannot be directly measured. Job performance is a theoretical construct that we can at best observe its manifestations. But to observe these accurately, we need the right incentives, a model, expertise, and reliable evaluation tools that should be refined and validated. That is: not our instincts.
Research in organisational psychology indicates that quantifying someone’s job performance is to rely on subjective ratings, whether by the employee (self-rating) or their manager (supervisory ratings). However, 96 per cent of the variability in employees’ self-rated is unrelated to how their managers’ view their performance.
Much of this situation stems from lack of quantitative measures of performance across different roles. Without agreed upon, quantitative KPIs (Key Performance Indicators), performance evaluation becomes even more political and emotional.
While employees are generally too generous in their self-evaluations, there is not much evidence for the superior accuracy of supervisory ratings in measuring workers’ true contribution, though aggregating ratings of different managers or sources will significantly boost reliability.
Needless to say we should improve how others see us through factors unrelated to our actual job performance. For example, if you are a boss, being friendly with your employees, giving them flexibility, and ensuring they have a good time at work, may all translate into positive 360-degree feedback ratings, without boosting your team’s performance.
Creating your organisation’s
hierarchy of needs
A challenging problem here is building the connective KPI tissue to top level business such as financial KPIs, profits, turnover, growth, and innovation.
This requires defining a hierarchy of quantitative and qualitative KPIs. The KPI definition needs to include nearly everyone in the organisation, from the CEO to front-line employees, identifying what metrics matter for their role/team/division and how that relates to outcomes defined as important in related groups. These definitions need to be validated. Tooling can then be put in place to continuously measure these metrics and provide feedback across the organisation. As the predictive power of these KPIs inevitably changes with business conditions, the definition process needs to be repeated.
It is also clear that people don’t enjoy having their workplace data microanalysed. As a result, employees will likely regard analytics as either creepy or crappy. This is why the KPI definition process has to be transparent and inclusive. Creating ethics committees with independent members, engaging in regular discussions with stakeholders across the organisation, and admitting when certain metrics are a best guess rather than the absolute “right” metric, are essential for building a fairer, faster, and more data-driven organisation.
The ever-increasing complexity of work has also cemented the importance of effective, large-scale collaboration for organisational success. The success or failure of large projects is less about the performance of a single individual and more about how people work together. So assessing and rewarding performance at the individual level, while necessary, is scientifically at odds with what is actually important in modern organisations: working with others, co-operating effectively, and making organisations better.
For questions or suggestions, please send your comments.
Sherif Attar, an independent management consultant/trainer and organisation development authority, delivers seminars in the US, Europe, Middle East and the Far East.
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