Posted by Lancing Farrell 560 words
This is the second post in this series. The first post discussed the type of measures needed to manage for performance. This post looks at how you can design an integrated performance management system.
The starting point for developing a performance management system is the ‘performance logic’ of the organisation. What are the most important indicators or measures of performance for your organisation? What are the key requirements of customers and the main strategic business needs of the organisation? The idea is that you have less than five.
Once you have your three to five key organisational performance measures (too many and it ceases to make sense), the intention is to move from these measures to end of process measures then to sub-process measures then to function measures then to work team and individual measures. If done properly, the series of linked measures will provide a ‘line of sight’ connection from corporate objectives to the expected accomplishments of each individual in their job.
Organisation level measures
Rummler and Brache provide a neat way to show how measures at the organisation level, process level and job performer level are integrated. I have reproduced a modified version of it below for a notional process, Process A. I have reversed the process flow to emphasis the cascading hierarchy of measures. Normally the process would run from left to right.
- Measure ‘M1 External’ is an ‘end of process’ measure of an output that meets customer requirements.
- Measure ‘M1 Internal’ meets an organisation business requirement.
- Measure ‘M2’ is the output of a ‘sub process’.
- Measure ‘M3’ is for critical process steps that must be monitored.
- Measure ‘M4’ is the output of a work team or individual.
Each measure is linked and organisational goals are cascaded down through measures at each level.
End of process measures (M1 or M2 depending on complexity)
Rummler and Brache use ‘swim lane’ process maps to show major steps in the flow of work and the involvement of each functional area in a process. I have created a very simplified example below to show an M2 ‘end of process’ measure.
The contribution of the three functional areas involved in each step in Process A is clear. The responsibilities of each function for outputs can then be identified.
Sub-process measures (M2 or M3)
The Functions and Responsibilities Matrix sets out how each function contributes to each process step and the output to be measured.
This matrix is useful to show exactly the output of each step. The next step is to develop a Function Model showing the measure for each output.
Work team or individual (M4)
The next step is to allocate responsibility for outputs directly to the various jobs within the functional area. At this level the outputs are the accomplishments of individuals contributing to the function or process.
This can then be further broken down for each person in the team.
At this point, the performance of each individual or their work team is inextricably linked to key organisational processes, which in turn, are linked directly to key organisational goals. The measures at each level should provide the information required for management action to improve performance.
This might seem to be a complicated process, and compared to some of the performance measurement occurring in local government, it is. Having said that, it is also logical and each step in the process is simple and should be able to be performed by anyone working in a management or supervisory role.
Rummler, Geary A., and Brache, Alan P. 1995. Improving Performance – How to Manage the White Space on the Organisation Chart.