Performance Management and KPI

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Performance Management and KPIs

Managers talk a lot about employee performance. There’s constant pressure to achieve performance targets, to reach higher performance levels, and to ensure that people’s work supports and furthers the organization’s goals. Performance management is the process used to manage this performance. The key question asked is, “How well is an employee applying his or her current skills, and to what extent is he or she achieving the outcomes desired?”

Key Points:

KPIs are metrics that link organizational vision with individual action. If you think of strategic practice as a pyramid, as shown in Figure 1 below, with vision at the top and actions at the bottom, in the middle you find the KPIs that have been derived from the strategy, objectives, and critical success factors of the organization.

Below the KPIs are the activities and projects that are pursued by the organization in an attempt to achieve the KPIs.  To ensure that these activities are in fact aligned with the organization’s strategy, you need to concentrate on what the employees are actually doing. You do this through performance management. By applying the principle of KPIs to employee goals and performance, you create a direct link between all of the key success factors that have been derived from the overall strategy. The result is that members of your team actually do what they should be doing, and that your measurements for determining how well they are doing are clearly tied to organizational success.

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Donald L Kirkpatrick’s “Four steps to measuring training effectiveness”
This model uses four separate stages for the evaluation of the effectiveness of a training program.

The four stages are:

  • Reaction
  • Learning
  • Behaviour
  • Results

Level 1

The first stage is about the reaction of the trainee to the training. This sort of measurement is concerned with how the trainees “feel” about the course. The usual course feedback sheets are an example of the Kirkpatrick level 1 evaluation. Most organisations do not do any more than this type of measurement and analysis. The drawback is that we do not really know if the trainee has actually learnt anything. What really seems to be being asked of the trainee was how “happy” were you with the course; hence the somewhat derogatory description that is often applied to the “happy sheets”! We will now look at the next level of evaluation concerned with Learning.


Level 2

Things can be improved by using a pre-test and post-test and comparing the results. The questions need to be objective and closely related to the course objectives (more about that later). In this way we can determine if the training actually delivered knowledge and this was understood by the trainees at the time. An organisation that does this can be confident that the trainee has actually learnt something at that time. Why do I make the point that we have to make the measurement and consider the learning at a certain time? Well because we do not know if the learning has had time to be internalised and become “concrete”. All too often trainees (and delegates at conferences for example) will have difficulty remembering what was in the course or seminar they attended a few days later let alone months later. There are various techniques that we can employ to improve the level of recall but basically “if we don’t use it we will lose it”!


Level 3

This is concerned with “behaviour”. By that we mean the measurable change in an individual as a result of their attendance on the training course. This is, in my opinion, the least we should be expecting from any training program. After all what is the point of spending money and using resources if the training does noteffect some measurable change in the behaviour of the trainee?


Level 4

Kirkpatrick is now concerned with the training to determine if it has actually been translated into tangible benefits to the organisation. Quite simply has productivity and or quality been improved? Have the number of accidents or incidents been reduced? Has plant availability and or plant utilisation been improved? Has the morale of the workforce changed for the better? These are metrics which really have an impact on the “bottom line” and for that reason feature in the companies balance sheets and KPIs. We have to ask ourselves is this not the real reason for training? Training has to make a real difference in performance and effectiveness; this is tied closely to competence. Training has be proven to deliver results and be cost effective. It might sound simple but it is not for most organisations. The reason is that most do not have in place any system for measuring the improvement in competence of the individual; let alone a systematic approach to identifying the most effective means of assisting the individual to becoming competent.


Cost effective training
If we all now accept that the majority of organisations carry out training to change the behaviour of the workforce and improve their performance in the workplace we also must accept that this cannot be achieved without a clear plan and strategy.

Evidence or proof?
A goal can be considered to be something that the organisation strives to achieve through the meeting of specific objectives. Achieving the individual objectives in a methodical and logical way effectively maps out the process towards the eventual achievement of the goal. There are many tangible benefits and other benefits which are very important but more difficult to quantify.

Benefits can include:

  • Better productivity
  • Lower insurance premiums
  • Improved morale
  • Enhanced reputation
  • Reduced stress
  • No legal costs
  • No compensation cases
  • Lower staff turnover
  • Employer of choice


Input, Process and Output
Some leading companies recognised the change model (see below) and one (IBM) introduced the IPO paradigm. The concern being is training delivering the desired results within the organisation? The IPO model was designed to confront and solve problem. In this model a distinction is made between output (short term benefits) and outcomes (benefits which are longer term but actually determine the availability of future training resources). The following quote is particularly relevant here “The ultimate payoff or added value of an employee’s learning experience is how well he or she performs on the job.” David S Bushnell writing about the “Input, Process, Output: A model for Evaluating Training” 1990 Training and Development Journal.


Flow chart of input-output approach to training evaluation

inputandoutput


Conclusion
The training intervention has to be designed to meet the needs of the organisation by satisfying the competence development requirements of the individual. By achieving this goal we have a rational and justifiable case for training and we are able to prove that training really does deliver tangible benefits, not least to the “bottom line”.

Sources:
http://www.sentricocompetencymanagement.com
http://www.mindtools.com

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