Oops! The input is malformed! Driving Performance Measurement: Keeping Your Employees on Course by David Gleason - BeyeNETWORK China


 

Driving Performance Measurement: Keeping Your Employees on Course How to Gain Control by Getting Behind the Wheel

Originally published July 24, 2007

One of the hot topics in the business intelligence world today is the use of business intelligence capabilities to provide employees with more timely and accurate performance measures. The thought behind this growing trend is to keep all employees focused on maximizing performance by breaking the analysts’ hold on information and sharing it broadly with personnel across the organization.

Until fairly recently, business intelligence has often been the domain of more technical “knowledge workers,” a catch-all definition for the collection of people who were involved in analyzing and planning company operations. They relied on business intelligence capabilities to help them understand patterns and causes in company performance, and to help them devise tactics and strategies for the future. This group included controllers, financial analysts, production analysts, quality control specialists, marketers, and other specialized disciplines. However, other employees such as rank-and-file production workers, shipping managers, and customer service representatives, just to name a few, were not direct recipients of business intelligence data, even though they make up the bulk of most companies’ payrolls.

The notion of tracking performance measures for employees at all levels of a company is hardly new. Nevertheless, it is only in recent years that large numbers of companies have been using business intelligence to widely distribute performance measures throughout their organizations. As companies increasingly provide metrics to their employees, they are learning that there can be some unintended consequences of measuring certain aspects of performance – and some of those inadvertent outcomes are not so desirable, as the following example illustrates.

Creating a Road Map

One of our client’s field sales forces had been complaining for years that customers were telling them that their post-sales support was lagging behind their expectations. Customers said that it frequently took them too many phone calls and too much time to resolve issues with their orders, compared to that of the company’s competitors. This company realized that their customer service teams, while generally competent and well-trained, weren’t necessarily aware that handling these customer calls as quickly and efficiently as possible was equally as important as providing the right answers. As a result, a measure was put into place to track average call times and numbers of calls handled by each customer service center on a weekly basis. These metrics were posted prominently throughout the service center work areas, and a performance bonus program was created (with bonuses distributed to teams that had the best monthly and quarterly metrics) in hopes to drive better performance and put the company ahead of its competitors. With these metrics in place, our client thought this to be a win-win situation for both the company and its employees. Unfortunately, this is where the reality of unintended consequences hit hard, and the company soon hit a “bump in the road” and steered off the intended course.

Be Careful of Wrong or Missed Turns

The customer service team simply did that which they were being driven to do by this performance-based bonus program: they handled more calls at a faster pace. The unintended consequence, however, of this performance measure was that representatives were now more focused on the speed of calls than on the actual satisfaction of the customer. Customer calls were being answered promptly, but it was taking several more calls for a customer to resolve a single issue. Representatives would answer a call, take pertinent information, and then inform the customer that they were opening a case and that someone would call them back. While the average time for a single call decreased, the average overall case resolution time soared, and customers had to call back repeatedly to check on the status of their cases. But, true to the letter, if not the spirit of the performance-based bonus program, average call times were way down and the customer centers were handling more calls per week than ever before.

Don’t Be Afraid of Using U-Turns to Get to Your Destination

So, how did this play out for our customer? They took a deeper look at the behavior they wanted to create or reinforce, and they developed better metrics that more closely aligned to that behavior. Rather than simply measuring the number of calls handled or the time spent on a single call, they began to measure more meaningful things. They launched an internal “first-call resolution” campaign, in which they tracked how many customer issues could be resolved on the first phone call. They also began to track more carefully the types of cases that were opened and the average overall resolution time for each case, including the time it took for the case worker to call the customer to gather additional information. And, most importantly, they realized that all of these metrics were designed to increase behaviors that resulted in customer satisfaction. This realization led to them measuring their performance more directly by, for example, having the field sales force ask customers to provide feedback on their support experiences. They also gained the knowledge that there is no magical set of measures that fits each situation and that as new business challenges arise, they will have to determine an appropriate set of measures that track their responses to those challenges. They learned a valuable lesson about picking the right results to measure.

The Driving Factor

As the old adage reminds us, “Just because you can…doesn’t mean you should.” Before considering what performance measures should be in place, companies need to be certain of the purpose and the results they’re looking to achieve. So what exactly is the purpose of combining performance measurements with business intelligence then? First, it’s used to drive the behaviors of business units, departments and employees – especially when they are tied to incentive compensation plans. Second, performance metrics can help keep people at all levels of a company focused on outcomes that contribute to that company’s strategic objectives, rather than focusing exclusively on short-term results or tactical objectives. A company must think long and hard about the measures they implement to gauge the success of individuals and the business, as they will play a significant role in charting the near and medium-term course of the business and can have a direct effect on the organization’s relationships with its customers, suppliers and employees.

It is important not just to measure processes, but to measure the right processes so that business success and good behavior are the result. It is also extremely important to not have measures that conflict with one another, which could drive “competitive” or counterproductive behavior.

Don’t Forget Routine Tune Ups!

As with all tactics, objectives, projects, etc., performance measures must be determined by, and aligned with, corporate strategies. Despite the inherent challenges of measuring performance and publishing those metrics broadly, this is something that is here to stay. More of us can expect to be accountable for specific job-related metrics. The secret to success is to carefully consider exactly what kinds of behavior each metric is going to encourage and how closely this behavior aligns to the strategic goals of the company. Moreover, we must recognize that the metrics themselves are going to need to be monitored and adjusted over time in response to a changing climate and new business priorities.

SOURCE: Driving Performance Measurement: Keeping Your Employees on Course

  • David GleasonDavid Gleason

    David brings 18 years of experience in the consulting field to his role, with expertise in data architecture, data management, business intelligence and data warehousing, as well as working with several Fortune 500 and mid-market manufacturing and high tech companies on their most pressing business intelligence-related needs. David served as VP of Marketing for Platinum Technology’s Global Consulting Organization, a position he was appointed to after serving as the company’s VP of Business Solutions for several years. He has also held leadership positions at Intelligent Solutions and Reltech Group. David holds a Bachelor of Science degree in Computer Science from The College of William & Mary.

     

     

     

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