80 – Designing a performance management system. Part 1 – Some tips.

Posted by Lancing Farrell                                                              430 words

rummler and brache book

There have been several posts on performance (here, here,  here and here). The most recent by Colin Weatherby discussed his approach to developing a ‘dashboard’ for his department. This post is an attempt to consolidate all posts into an integrated performance management system based on the work of Geary A. Rummler and Alan P. Brache in Improving Performance – How to Manage the White Space on the Organisation Chart.

Before getting into the details of how to build a performance management system, it is worth thinking about what you are trying to achieve. From a management perspective, measurement specifically communicates performance expectations. It enables feedback to be provided against a standard and for any gap to be identified and addressed. High performance can be identified and rewarded. Decisions regarding resources, plans, policies, schedule and structure will be more effective. From a worker’s perspective, each person will know what is expected of them. They will know how they are performing and what they need to do to improve.

Rummler and Brache say that a successful performance management requires that the ‘right’ things are measured; that the measures are accurate and meaningful; that measures are integrated; and that there is a way to turn measurement information into management action.

The concept of the ‘levels of performance’ has been discussed in a previous post. I have reproduced the ‘nine performance variables’ matrix showing the link between the levels of performance and performance needs.

the 9 performance variables

Measures are required at each of the performance levels. They should be output driven, customer-focussed and have several ‘critical dimensions’ (e.g. quality and quantity and timeliness). The process to develop measures has been discussed in an earlier post. Three types of measures are proposed by Rummler and Brache:

  1. Regular formal measures against which actual performance information is gathered either continuously or periodically, depending on requirements.
  2. Regular informal measures in which performance information is gathered periodically using the ‘back of an envelope’.
  3. Irregular measures used when there is a ‘special’ situation, for example a key indicator is off track, until the situation is resolved, when measurement will stop.

A key issue in using the ‘nine performance variables’ is the need to link process and function (or department) measures. Each function needs to be able to measure their contribution towards process goals. Remember, it is processes running across organisations that do the work necessary to deliver services. Functions or departments are simply convenient groupings of people and resources in order to run the organisation.

Rummler, Geary A., and Brache, Alan P. 1995. Improving Performance – How to Manage the White Space on the Organisation Chart.