6 ways to Redefine Performance
Managing and monitoring performance is used by many organisations to achieve sustained growth, adapt to changing environments, adhere to regulatory requirements and ensure they are operating within acceptable tolerances. To manage and drive performance successfully organisations clearly define, measure, report and manage progress and outcomes in order to continually improve. Performance management works best when undertaken at a corporate level as well as an individual level.
Key Performance indicators (KPI’s) are a great way to link organisational vision to individual action. In an ideal world KPIs are set at an overall strategic level of an organisation and can cascade from level to level by way of achieving strategic goals and objectives.
1. Establishing Effective KPIs
Organisations should aim to take a number of key steps before choosing the best key performance indicators relevant to their desired performance outcomes. Firstly an organisation must establish clearly defined business processes. This can be assisted by setting requirements and parameters for the business processes which then leads onto outlining, qualitative and quantitative measurements of results. Once the framework has been set an organisation can then determine any the accepted variances that are tolerable to the outcomes set out to define performance and then continually adjust these processes to meet short-term objectives which can often feed long term goals.
When using KPIs to measure particular and critical areas of performance there are specific ways that leaders can help departments characterise and define a KPI and what they are being used to measure. These characteristics are typically defined by 5 qualities:
- Relevance – Are KPIs relevant to the outcomes and performance of people that are managing them and are the right people within your organisation structure driving them?
- Strategically Aligned – Are KPIs aligned with overall business goals and objectives and how do they feed into the long term strategy?
- Realistic – Are KPIs challenging enough to allow for change and innovation to happen while not being impossible to achieve?
- Measuring what is Critical – Do your KPIs measure what is crucial to a specific department’s success?
- Predictive – Are KPIs providing results that can be used to make projections and correlations to broader business goals?
The true value of KPIs doesn’t have to be in the measurement of performance alone. In actual fact it is found that when KPIs are used effectively within organisations they inspire factual data-driven conversations which in turn allow for better decision making at various organisational levels. Well-designed KPIs should provide a clear picture of current levels of performance and whether an organisation is tracking as it needs to be. skefto strategic planning software allows key performance indicators to be defined, associated with objectives, business units, processes and activities. Result data is able to be periodically recorded against KPIs with scheduled reviews allowing results to be assessed providing an opportunity to pivot the strategy in instances of underperformance or to seize an opportunity.
2. Monitoring Organisational Health & Strategy
When developing strategies for any healthy workplace there are three critical success factors:
- Commitment from senior organisational leaders
- Employee participation
- Ongoing communication
These success factors that must be implemented into relevant policies and procedures that lay the groundwork for ensuring the success of your strategy.
Key Performance indicators (KPIs) allow management and organisations to clearly communicate to their employees which goals are most important and in turn KPIs provide organisations with an immediate snapshot of the overall performance of an organisation from an umbrella perspective right down to understanding how individual departments are performing at any given time.
While KPIs are mostly related to overall organisational goals they sometimes may also focus on the operating efficiency of individual parts of the and how they affect the whole. Developing and tracking departmental KPIs effectively can drive departments to communicate more clearly and work closer together to achieve the organisation’s goals. They also highlight how individuals within each department can play an active role in contributing to corporate success and driving the health of a strategy. skefto allows organisations to demonstrate value and instill confidence with stakeholders, customers, investors and staff by providing meaningful insights into the organisation’s performance and initiatives, via an automated system of reporting and business intelligence.
3. Encourage Accountability & Boosting Morale
A good Performance tracking system can often increase the capability of employees. In keeping leadership abreast of a team’s performance, managers can use performance information to document employee action and progress, discuss their findings and provide feedback which can ultimately increase job satisfaction as targets are met.
It can be rewarding and motivating for employees to receive positive reports for meeting certain KPI’s. Striving toward and achieving KPIs gives employees a sense of purpose and keeps them focused on meeting their goals. This is most effective when one person is directly responsible for the success of each KPI. For this reason an organisation’s leadership must ensure that employees help define which KPIs fall within their department, the parameters of their measure and how they can use these factors to measure performance and provide direction that will ultimately drive their success. In this way management can define what success looks like not only on a strategic organisational level but on a team and individual level also.
It can be a challenge for some teams to stay focused and positive when goals are too large, unattainable or too long-term in nature. Employees feel empowered to make a difference when they feel that they have some portion of control over their outcomes. As such breaking down goals into smaller bite sized processes and reporting on key indicators can give employees the opportunity to achieve the goal in stages. Focusing on achieving milestones and celebrating the wins along the way improves morale and keeps everyone focused on the prize. skefto links organisational & staff performance and allows management across all levels to monitor staff performance and outcomes for activities emanating from their business units. skefto dissects objectives, actions and performance indicators into practical and achievable portions and assigns these to staff for execution and monitoring whilst maintaining alignment with the organisation’s strategy.
4. Create an Atmosphere of Learning – solve problems or tackle opportunities
We have spoken a lot about meeting KPIs, hitting targets and celebrating the wins but the reality is that not all reporting on KPIs can be favourable. In the instance of unfavourable results there is opportunity to create a culture where the result can be talked through with any individual or team involved with that specific KPI. It provides a chance to teach the employees how to do or see things differently that will drive better performance in order to reach set targets.
If results on certain KPIs are continually unfavourable an organisation must analyse firstly whether the set KPIs are perceived as realistically challenging or simply unreachable. This analysis should bring to the forefront understanding that an organisation is driving outcomes that are measured effectively, reachable, relatable and relevant to the teams and team members being measured against them. On the basis of this analysis continual reassessment and modifications will assist in finding the right measures that will drive positive performance while still leaving room to cultivate individual expansion and growth. skefto strategic planning software enables structured and proactive reviews of performance, providing an opportunity for high performance to be commended and issues to be identified and addressed through a collaborative and constructive approach.
5. Measuring Progress Over Time
KPIs results can provide valuable insights however in order to make results meaningful an organisation should allow for evaluation over a period of time. Results hitting or not hitting targets is instantly visible but time allows for the data to settle and hence provides a clearer overall picture of performance that can define the success of a strategy.
KPIs measure the goals and targets against actual, quantifiable data over a specified period of time. When set up correctly a KPI should have a specific time frame that is divided into key checkpoints for accuracy. Goals and targets are set at the beginning of a period and KPIs are then used during these periods (e.g. weekly, monthly etc) to measure progress and performance against these goals and targets.
When the same KPI is measured across periods (e.g. quarter over quarter) patterns in numbers can begin to appear. By using KPIs organisations can establish the data needed in order to make more enlightened predictions on business performance. An organisation could for example use performance data to foresee their slowest period and use that time to plan and prepare for their busy period.
Measuring progress over time not only creates predictability but also visibility over individual performance as well as corporate performance, an example of this could be a sales manager that might always forecast 5 deals over or under the actual result for a period or maybe a team that habitually under or over performs on their KPIs and can use this data to talk about opportunities for streamlining results and driving growth. skefto allows performance to be measured against targets and benchmarks and regularly reported to decision makers. skefto allows for the scheduling of KPIs with “just-in-time” system and email alerts ensuring users are always aware of their performance obligations.
6. Stay On Track with Lead KPIs & Reviews
Leading KPIs are measurable factors that change before the organisation starts to follow a particular pattern or trend. They have two characteristics being that they are measurable and that you can directly influence them. They are good KPIs to present on a dashboard to keep projects on track and ensure business services and activities are performing as expected.
The real-time data that KPIs provide allow organisations to make systematic adjustments as they go as to avoid having to make frantic unmeasured changes at the end of each reporting period inorder to reach goals. Leading indicator KPIs provide early warning of missing targets before it’s too late and help predict what will happen in the future and future results.
KPIs do not necessarily need to be set in stone which is why tying KPIs back to routine activities is so critical. When KPIs are assessed and tracked routinely, leadership can see where changes are necessary and where measurements need to be adjusted to stay on track in driving strategic outcomes.
Used well, KPIs support your organisation’s goals and strategy. They allow an organisation to focus on what matters most as well as monitor progress and define performance. skefto allows lead and lag KPIs to be set against specific items in a plan, such as objectives, actions, or broader KPIs, and also against business units, processes and activities. KPI Result Targets provide real time traffic light alerts that highlight how we are operating with respect to acceptable business tolerances. skefto allows for a periodic review of performance allowing KPIs to be amended as required based on the changing environment.