Performance Measurement

Organisational Effectiveness: Process efficiency or process effectiveness?

Organisational Efficiency and Effectiveness, Performance Measurement, Process Design, Process Review / / / , , ,

Process efficiency and effectiveness are words often used interchangeably, but the reality is that business need to consider both process efficiency and process effectiveness to optimize revenue and profits.

Process Efficiency

Process efficiency refers to the close tracking and monitoring of the performance of existing processes.  It is an important aspect when measuring productivity and is often a pertinent aspect during the implementation of new technology.

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify inefficiency.” – Bill Gates

Regular review of the input provided by internal (team members) and external (customers) stakeholders serve to measure how efficient the allocation of resources is, efficiency in the execution of tasks and outcomes.  Reducing waste and costs, improving productivity and customer services (doing what is right) are amongst the things that continuously drive improvements in operational efficiency.

Process Effectiveness

The relevance and applicability of a process, measures the effectiveness of it.  Is it fulfilling the needs and demands of internal and external stakeholders?  An effective process will provide the right outcomes (doing the right things) for its stakeholders, at the right cost, the right time, and the right place.

“Excellent firms don’t believe in excellence – only in constant improvement and constant change.” – Tom Peters

Constant innovation and change through stakeholder engagement and interaction, supports the notion that business excellence is achievable.  Regular reviews and assessments of process effectiveness is a business imperative and ensures that processes remain relevant and deliver on business objectives.

Consider process efficiency and effectiveness on a continuum where both process efficiency and effectiveness are required to ensure that strategic and operational business objectives are achieved.

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Organizational Efficiency and Effectiveness: A pipe dream or a reality?

Organisational Efficiency and Effectiveness, Performance Measurement / / / , , ,

Have you redefined what organizational effectiveness and efficiency means for your business in times when our resources are not necessarily physically accessible and controllable?

Organizational Efficiency

Organizational efficiency measures the relationship between inputs and outputs.  That is, it means that the better the output (products or services) achieved with the inputs (resources) used, the more efficient the business is.  Efficiency does not mean that an organisation is automatically productive, effective and successful. 

If the efforts of business are not aligned to the goals of the organisation, efficiency is inconsequential.

Organizational Effectiveness

A simplistic description of organizational effectiveness is that it relates to the ability of a business to attain its goals by utilising its resources effectively.  Similarly, it does not necessarily mean that resources were used efficiently. Thus, strategy planning, goal setting and performance measurement is critical to set standards and obtain organizational effectiveness. 

“Efficiency is doing things right; effectiveness is doing the right things.” – Peter Drucker

Due to COVID restrictions we mainly manage our resources remotely.  Managing human resources remotely and keeping them engaged is challenging us to think differently.  Strategic planning, goal setting, key performance indicators and empowerment of resources is critical to organization efficiency and effectiveness.  Now more than ever before, it has become especially important to have daily interaction with your team on a personal level, to remove obstacles to performance and to track progress.

Consider collaborating with your team and others to define what efficiency and effectiveness mean for you.  A collaborative mindset will build a great team culture, develop team cohesiveness and encourage innovation.

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Performance Management: Traditional approach challenged by Covid-19

Performance Measurement / / / ,

A collaboration between Karlien Kruger: HR practitioner and Mpumelelo Mthembu: Research practitioner 

The onset of COVID-19 redefined the world of work.  Organisations and teams are now mostly working remotely, providing new challenges in managing individual and organisational performance. 

Traditional Approach

Traditionally perceptions about work performance were formed on the physical presence of employees.  Employees arriving at work early and leaving late were perceived to be better performers.  In the pre-COVID world of work, Managers often articulated this as the reasons to motivate for salary adjustments and incentives for such employees.  The perception being that those who spend long hours at work were the better performers.

The Lockdown

During the COVID lockdown many Managers confessed to being frustrated when they were unable to immediately contact employees, when employees did not answer their phones or respond to text messages immediately.  The attitude being that employees are supposed to be at work from 8 am to 5 pm and therefore they should be available during those hours and, in some cases, even after hours.

Remote Work

The idea of remote work has long since been discussed, but a clearer need to understand how to manage remote work was forced upon business with the onset of the COVID-19 virus.  This leaves the question whether employers now understand that their attitudes towards measuring employees’ performance need to change? 

Many an employee and Manager commented that their productivity and performance increased during the lockdown period.  When asked why, they noted that they do not loose time travelling to work and from meeting-to-meeting as they are conducting most meetings online, indicating that meetings were more focused and productive. 

If 75% of the workday is spent on online meetings, when is the physical work actually done?  When asked about this, answers from Managers are vague, indicating once again, that meetings are a gauge of productivity and performance.

Similarly, employees commented that their personal and work lives have now combined into a big blur of activity as they struggle to obtain work-life balance.  Whilst employees view the freedom to work independently as an opportunity to take responsibility for their own performance and to produce high quality work in the planned timeframes, they are required to better plan their days, weeks and months.

Thus, it forces us to re-examine how performance is measured, especially since employees are not necessarily physically present. The systems, preparation and planning of business, organisation and individual performance therefore needs to be investigated, together with the impact of various organisational, team and job linkages and interdepencies.

Conclusion

The world of work has changed forever.  Managers and employees must change their attitudes towards measuring performance, rising above the traditional perceptions of physical presence as a requirement.  It requires of Managers and employees alike to approach the preparation and planning of performance measurement with emotional intelligence and maturity.

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Performance Management: Much more than just a once a year …

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A collaboration between Karlien Kruger: HR practitioner and Mpumelelo Mthembu: Research practitioner 

The efficacy of performance measurement is often questioned. Organisations often experience major resistance to performance management systems, due to employees harbouring negative sentiments informed by prior experiences. 

The Mundane Tool

Employees view the annual performance review as a mundane tool wielded once a year with the intent to deny them salary adjustment / increases and/or bonuses. The experience becomes a scarring tug of war between management and employees because of the differing perceptions in what individual ratings should be.

Bearing in mind that employees see their performance ratings as the main driver of remuneration-related and other decisions, can performance management be utilised in a manner that is viewed as a positive and true performance driving process?

The Purpose

An understanding of the purpose of managing performance and how it links to business strategy is critical for a positive experience for individuals.  Taking into consideration that making those linkages and understanding the interdependencies is not always easy at the lower levels of an organisation. 

Management’s ability to communicate these linkages and interdependencies is critical to create a positive and well received performance management system.  Often, employees are unsure or do not understand how their individual performance affects the team, the organization and ultimately the business performance. 

Performance management systems are used for a multitude of reasons

  • Pay reviews
  • Bonuses / incentives
  • Poor performance management

For these reasons it is critical that Objectives are specific, measurable, realistic and timebound.  However, the linkages of these objectives to the rest of the organisation is often not scrutinized.  Leaving employees with a poor understanding of the horizontal, diagonal, and vertical linkages and interdependencies. An understanding of the above also allows for the identification of core and, what is deemed as, peripheral tasks.

Frequency of Performance Reviews

Following the ongoing communication at Executive and Senior Management level of strategic outputs to be achieved, frequent reviews of performance create a better understanding about the linkages and interdependencies affecting individual, team, and organization performance. 

Managers all too often see performance reviews as a task needing attention just prior to annual salary reviews and bonus payments, spending all their time on capturing it on the performance management system, rather than focusing on the quality of the discussion with the employee.

Conclusion

Progressing from the once a year performance review to more frequent, regular, and high-quality discussions with employees may lead Managers to better understand the cause and effect of changes in performance.  Employees will be informed, understand how their position links to the achievement of strategy and how it impacts the team, organisation, and business.

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Performance Management: Creating A Holistic Understanding

Performance Measurement / / /

A collaboration between Karlien Kruger: HR practitioner and Mpumelelo Mthembu: Research practitioner 

The challenge with human resource performance management systems is that performance is an outcome of various factors and inputs. The question is whether an organisation’s measurement program takes as many of these factors and inputs into consideration.

THE CHALLENGE

Beyond identifying contributors to performance there is also a need to understand the nature of each input and factor in relation to performance. Some factors have a direct impact on performance and others an indirect one. Moreover, how do the inputs and factors affect each other? Is the net effect of the interaction between these inputs and factors optimal performance? Just from these questions it becomes obvious that a performance measurement system is very intricate.    

The questions noted above also speak to the linkages and how they impact performance. In an organisational context, linkage is a structural phenomenon referring to the joining together of two or more objects. These linkages must be understood.   

THE RESOURCE

In their book, Organizational Linkages: The Productivity Paradox, the National Research Council in Washington DC discuss these different types of linkages.  The book also closely examines inter-role linkages, intra-role linkages and the complexity of such linkages and what its impact is on organisations.

INTERROLE LINKAGES

Interrole linkages refer to connections among roles. The connections could be between roles within a group, between groups, between organizational units, or between people and machines. These linkages contribute to understanding and tracing how roles affect each other with regards to performance. Interrole linkages can highlight activities outside the employee’s control that affect their performance. 

INTRAROLE LINKAGES

Intrarole linkages are defined as linkages within any role and its subtasks. It is possible that productivity increases in some subtasks may not affect (be linked with) the performance of other subtasks within that role.

LINKAGES CAN BE DESCRIBED IN TERMS OF MULTIPLE DIMENSIONS

Linkages can also vary in terms of complexity, that is, the number of links in any organizational context. The more linkages in an organization, the more complex the environment for tracing impact on performance. The degree of interdependence in a linkage condition also varies. One can conceptualize an organizational system in which all the objects are highly interdependent versus one in which objects are more loosely coupled.

CONCLUSION

A role of an employee in any organisation is complex and their performance too multidetermined. Paying close attention to all the factors and inputs contributes to building a comprehensive, effective, and fair performance management system.  Especially, where performance measurement outcomes are used both as an input and an output to business change.

As research and HR practitioners we can partner with you in building a comprehensive people performance measurement system.    

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Does Performance Management Work?

Performance Measurement / / /

A collaboration between Karlien Kruger: HR practitioner and Mpumelelo Mthembu: Research practitioner

The efficacy of performance measurement is often questioned. Organisations often experience major resistance to performance management systems, due to employees and top management harbouring negative sentiments informed by prior experiences.

Performance management efficacy

A once annual assessment of performance used as the basis for remuneration and reward decisions are frequently questioned by managers and employees alike.

Executives, Senior and Middle Management, on the other hand, grapple with whether such performance management systems really help organisations to improve business performance? HR Professional are thus often challenged about the relevancy of performance measurement, given the perceived lack of positive outcomes from such systems to the business.  It is often viewed as a time-consuming activity, preventing managers and employees from focusing on core business activities.

Cause and Effect

Given the observations in the previous two paragraphs it thus stands to reason that it is a question of linkage and of cause and effect. A linkage can be described as

  • a change (or hypothesized change) in the performance of one work unit as the result of a change in the performance of another
  • a change (or hypothesized change) in the performance of a team member on the rest of the team
  • a change (or hypothesized change) in the performance of different hierarchical levels of the organisation

Building an Effective Measurement System

In building an effective and positively received performance measurement system there are various considerations to be made. The first of these is a better understanding of the linkages between individual, team, and organizational performance, as well as performance at different levels of the organisation.

Changing a single aspect of an organization almost never results in a substantial change in organizational performance. Organizations are too complex, their performance too multidetermined, and their inertia is great for a single innovation at the individual level to have a substantial impact on organizational performance. Schneider and Klein, Automation of America’s Offices, 1985

Furthermore, a better understanding of the type of interdependence of units at an organisational level is critical to investigating the impact of the change on performance. Depending on the type of change, interdependencies moderate the extent to which changes have the desired effect on organizational performance and ultimately business performance.

Understanding the linkages among roles, as well as how subtasks within roles are linked, further explains how individual performance is impacted by changes in performance. Further examination of the complexity and the degree of the interdependence of these linkages is needed.

Conclusion

Closer inspection of the linkages and cause and effect of changes in performance may provide a better understanding of the interdependencies and provide for more fair and acceptable performance measurement.

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