Measuring Up
Here are 10 tested ideas for a good performance management system for your own organization
By Reylito A. H. Elbo; Illustration by Frantz Arno Salvador
What's the right approach for a manager-entrepreneur like you? What style suitable to your company's culture and standard will help you create an objective process with your employees?
What most people focus on when they ask these questions is finding out what the experts are doing in the first place. But before you can make sense of what's out there, of course, you need to understand that results alone will not necessarily tell you all you need to know about the performance of a task and of its target results.
The key word here is "measure," a task can also be expressed in so many other ways: appraising, assessing, calculating, computing, determining, evaluating, or gauging the performance of your people in the workplace.
The good news: you don't have to start from scratch. You can get a leg up by learning from the experience of others. The beauty of this exercise is that you can avoid some of the mistakes they made. You can simply adopt or adapt the techniques and processes that took other companies to world-class levels of performance.
Aligning work performance levels
To make the whole matter of progressing to world-class levels more practical and accessible to you, I am distilling here hundreds of complex descriptions into just five key levels, each of which should fit your current practice and where you want to go. The descriptions are based on directly observations of a great variety of management practices and on studies of what practical things organizations can actually do.
Surely, one of the following levels can be a workable formula for your organization:
Level 1 - SMART (specific, measurable, attainable, realistic, and time-bounded) objectives are agreed upon annually in every department. Teamwork is strongly expected from all hierarchies, even during pressing and changing conditions. Yearend result is generally achieved at 100 percent.
Level 2 - There is an appreciative degree of SMART objectives agreed upon and made known to all employees who know how they can contribute. Department heads coordinate their efforts with one another well. At least 90 percent of objectives are achieved.
Level 3 - Top management alone decides on the general objectives for the organization. These are translated into more specific objectives at each department level. Teamwork has slight operational problems. Yearend result is at least 80 percent achievement.
Level 4 - There is a semblance of SMART objectives in place, but they are not seriously observed and monitored. Top management knows its general objectives but the rest of the management team do not understand them, or are not sure how to implement them. Yearend result is 70 percent achievement of target.
Level 5 - Top management gives direction, but most of the time, it changes that direction in midstream. Workers do their jobs only as much as they are told to do on a daily basis. Objectives are rarely written, with managers justifying the omission by saying, "We don't need it, this is a small company anyway and we know what to do." This way, they are in luck if they achieve 60 percent of their perceived target.
Now, face the mirror and find out how you fit into any of those five levels.
Revisiting management by objectives
Of the organizations you will know on this planet, 90 percent would profess that their employees are the most important asset in their business. Surprisingly, however, majority of them don't know how to treat people the right way and why, except perhaps for some managers who will blind you with complex programs like the "Balanced Scorecard," "360 Degrees Feedback," "Forced Ranking," and many more such things.
The problem is that these buzzwords are basically Western-oriented and may not necessarily and immediately appeal to the local setting, not to mention the possibility that they are difficult to implement in more ways than one. This explains why there are only a handful of organizations that are into this kind of practice; some of them, in fact, just set up a "murdered" version if only to catch the bandwagon.
But such is not the case at Nokia Corp.-a global leader in mobile phone devices and communication network infrastructure. Nokia (Philippines), in particular, has learned it the simple but effective way: by revisiting the time-tested Management by Objectives (MBO) approach popularized by Peter Drucker in 1954! MBO is, of course, the process of agreeing on certain set objectives within the organization so that managers and their employees can easily understand what they are, how to achieve them, and measure individual performance-and in the process also know who to reward and what to reward them.
How could one argue against MBO? And, more importantly, how could Nokia make a mistake with MBO, with which it has made great progress after custom-building it into a program called "Investing in People"?
Not to be outdone, Manila Water Co. (MWC), a local corporate hero in water distribution, has made its own version of MBO, which became the basis for its being adjudged the 2006 Employer of the Year by the Personnel Management of the Philippines.
Indeed, through its "Total Management System," Manila Water has overhauled a system previously dominated by government bureaucrats to make the company what it is today-an Ayala-led conglomerate that relies on the SMART approach on its way "to establishing winner's mindset." Today, MWC has improved its franchise area's 24-hour water supply from a low of 26 percent in 1997 to 98 percent in 2006!
Rey Elbo, head of Kairos Management Technologies, is a pioneering business consultant specializing in teleconsulting work on human resources and total quality management as a fused specialty. Teleconsulting is a cost-effective means of using the professional services of an external consultant by using the most common technologies like e-mail, fax, and telephone. He can be reached at Tel. (02) 822-6660 or by e-mail at kairoshq@info.com.ph .
