One of the most important aspects of good performance management, and therefore performance measurement, is to have goals that are both aligned to the overall business strategy and balanced-- covering all aspects of the business operations.
Robert Kaplan and the Defining Book
In the 90s and early 2000s, this guy named Robert Kaplan took the notion of have a balanced approach to managing the business and broadened into what he called a "Balanced Scorecard." If you recall, in the first module of this course we took a very modified version of this too explore how managers should be held accountable.
I strongly believe that when building a set of goals for your team and the individuals on your team, you need to take that same balanced approach. And, Kaplan's Balanced Scorecard is the perfect tool for doing so. The graphic below defines each of the four quadrants. Note: One change in the graphic-- Kaplan calls the Employee Perspective, Learning and Growth. For managers, I believe the Employee Perspective should remain. We can always have managerial goals centered on employee satisfaction. For independent contributors, I replace the Employee Perspective and the Team Perspective. In other words, setting goals for folks to support team relatedness-- notice the connection to the motivation stuff in Module V.
Sample Metrics
Below are a bunch of sample metrics, by scorecard category, that could be incorporated into goals (as defined in the previous Library resource).
FINANCE
- Sales #s
- Budget adherence
- # of contracts signed
- Improve new product time to market by a week
INTERNAL
- Error rate reduced by 10%
- 98% of customer calls resolved first time
- Reduce cycle time by 3% on manufacturing floor
CUSTOMER
- Retain 75% customer base quarter to quarter
- Customer Satisfaction at 95% or better
- Inbound call wait time reduced by 25%
- Product returns drop by 25%
EMPLOYEE
- Employee Satisfaction up 5% from last year
- Team turnover down 15%
- Increase Coaching time by 15%
- 10% of team promoted to high level jobs
INDEPENDENT CONTRIBUTORS
- Score x% higher on team 360 degree assessment
- Team meets group objectives