Are you measuring performance or results? HR is often measuring the wrong one.

04/06/2012 at 21:49 2 comments

It is impossible these days to open a HR magazine, go to a HR conference or read a HR book without being overwhelmed by terms such as ROI on HR, HR analytics, KPI’s, measurement and Human Capital Management. These buzzwords which are trying to make HR ‘harder’ have really gained acceptance in the HR world today. In many ways, this is a good thing.

The problem with metrics and KPI’s is however, that they actually do work. That is, if you start to measure people in certain ways and you link their pay to meeting those measures they will in most cases try to meet these goals (KPIs) at the cost of other things.

“What you measure is what get’s done” as the old saying goes. It is therefore imperative that you measure the right things.

I was recently inspired by a Ted-talk about measuring performance. The talk was given by Dr. Chris Shambrook who supports organizations with leadership development. He makes the argument that when organizations talk about performance they are usually talking about results. So when you ask a person about how his performance is, what most people think of is results – how well are you doing against the goals set for you. What performance really means is “doing the things you need to do in order to get the things that you want”. He argues that organizations should focus on performance more than results. I totally agree.

I recently wrote about something similar when I advocated that HR also should track effort in the performance management system. Inspired by John Wooden, arguably the best coach in sport’s history, who famously never talked about winning games and wasn’t focused on the points on the board but instead for him it was about sticking to the fundamentals and making an effort to reach your potential. If you do that, he argued, the points will come.

Jon Ingham is a big more cynical when he state that “the easier something in HR is to measure, the more likely it is to be pretty low value”, but I agree with him. It is easier to measure results but HR should be more focused on measuring performance. However just because it is more difficult does not mean impossible. It just means that you should look somewhere else for your best KPI’s.

I freely admit, that I believe  HR can add significant value through good analytics, metrics, ‘true’ evaluation and cleaver KPI’s. However I also believe that they are difficult to get right, and if not done properly you can actually do more damage by using ‘ugly’ KPI’s. If you want to do it, make sure you do it right. In that sense I am not a true ‘Demming’ who believed that “In God we trust, all others must bring data”.

By focusing on performance instead of results you focus on how much potential you have and how you need to develop that. That in return will give you more control over delivering your results. Isn’t that what we are supposed to do?

Entry filed under: Analytics, Measurement. Tags: , , , , , .

Cognitive dissonance and HR Analytics is a bad cocktail HR analytics: Don’t think for a minute that data or information change behavior. Knowledge does.

2 Comments Add your own

  • 1. Andrew Marritt | OrganizationView  |  12/06/2012 at 09:54

    There are 3 good reasons to measure / report information:

    1) That doing so reduces uncertainty / risk in decision making and this decision has an economic benefit
    2) That the information can be used to influence behaviour in others,and that behaviour has an economic benefit
    3) The information itself has a value & it can be sold (either directly or in-kind)

    In HR the first two typically apply, usually in combination. We always need to be conscious of unintended consequences. Fortunately we can often spot their presence in the data.

    Reply
  • […] is not always the case that the best person gets paid the most. Performance Management systems are simply not that effective and efficient.  At the same time, I expect that the IT infrastructure, processes, products and brand contributes […]

    Reply

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