Mastering the Three “Sides” of Performance Management
by Wayne Ottum
“In business, words are words; explanations are explanations, promises are promises,
but only performance is reality.”
Harold S. Geneen
What is the performance “reality” in your business? Do you know for certain that each team and individual is performing to the best of their abilities? Do you have the tools in place to effectively measure and manage performance? Does your staff clearly know WHAT they are supposed to be doing? Do they know what it means to do their job well? Do they know what decisions they have authority to make and how to make them to drive revenue, create value for your clients, improve profits and attain the goals of your business?
These can be perplexing questions and the best way to ensure maximum performance and take your business to the next level is to master the three “sides” of performance management, as shown by the following diagram and defined below:
Responsibility is the foundation of performance management and you must clearly list and define WHAT an individual or team is expected to do so they can understand their role and what responsibilities (tasks) they need to accomplish in that role. Responsibilities are always defined with an action verb such as “build, design, manage, conduct, sell,” etc. For example:
- Build a mock-up of the design.
- Market and sell our product to new customers.
- Design the software.
- Manage the schedule and resources.
- Conduct research into the feasibility of the project.
Accountability is the MEASURE of performance for the tasks assigned. It is defining for the team or individual the level of performance expected in their work, the standards to which they are being held, and a true understanding (knowing) when tasks must be completed. Performance measures come in four (and only four) types: Quality, Quantity, Timeliness, and Cost Effectiveness. Examples of performance measures include:
- Build a mock-up of the design according to current architectural design standards by March 31st (Quality and Timeliness).
- Sell 100 or more units per month with 10% or greater profit margin (Quantity, Timeliness and Cost Effectiveness).
- Design the software to meet client specifications by June 30 (Quality and Timeliness).
- Manage the schedule to meet the project deadline and within budget (Timeliness and Cost Effectiveness).
- Conduct the research using quantitative methodologies to create a 90% certainty in the research results by May 31st (Quality and Timeliness).
Authority is defining exactly what the team or individual may independently decide and when they need to consult, or get authority from others. Examples include:
- Make all mock-up design decisions within the scope of the project criteria and budget. Consult with management and obtain authority for any design decisions that exceed project criteria or budget.
- Discount products up to 10% off suggested retail price. Obtain management authority for discounts exceeding 10%.
- Make all software design decisions within the scope of the client specifications. Consult with management and obtain a signed change order from the client before implementing any design decisions outside these specifications.
- Modify the schedule and reassign currently assigned resources to tasks, as needed, to meet the project deadline and budget. Obtain authority from management to add or change resources on the project or to exceed project budget.
- Make all decisions needed regarding research methodology and processes to create a 90% certainty in the research results.
When you clearly define the three “sides” of performance management, Responsibility, Accountability and Authority, your teams and staff will know what they need to do, how they are measured, and what decisions they can make. They will have the information they need to perform, and you will have the means to truly manage that performance. In fact, you will find that teams and individuals will self-manage as you will be tapping into their natural drive for mastery, achievement and self-improvement. When you have mastered the three “sides” of performance management then, and only then, will you know whether or not your team is truly performing to the best of their abilities.
About the Author: Click Here to find out more about author Wayne Ottum.
Interested in learning more about our Lead from Strength™ methodology and what we can do to help take your business to the next level? Click Here.