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Performance Frameworks and Measures

The importance of a relevant and healthy performance framework along with associated measures is of paramount importance in running any business.  Without these we cannot identify when we need to improve or indeed when we are succeeding!

However, problems occur when the framework or measure  drives dysfunctional performance.  A poorly designed performance framework or measure can lead to your people hitting goals but at the expense of some other fundamental area of your business.  Similarly the measure may well not be delivering the desired outcome.

An example of a dysfunctional performance measure would be the below:

A financial sales company has targets of 100 sales per week per staff member.  The deadline for the sales targets is the close of business each Thursday.  From Friday to Tuesday there are very few sales achieved.  On Wednesday and Thursday 95% of the weekly sales are being made and by the end of Thursday the target is met.

However, only 45% of the sales are actually realised as 55% of the sales are cancelled during the 14 day cooling off period.

Two of the issues that the above performance measures have caused are:

  1. Although the 100% sales target is being met, it should really be the sales after the cooling off period that is measured as this is what puts money in the company bank.
  2. It appears that the majority of the sales activity is taking place on Wednesday and Thursday.  Could the organisation perform better if the rate of sales on Wednesday and Thursday were repeated on each of the other working days?
    Has the measure allowed individuals to not work as hard on the other days?

The reality is often more complication than the above but this is an example of dysfunctional performance measures.

Performance Works consultants will work with you to ensure your performance framework is appropriate and ensuring that you are getting the best from your people.

Contact us now for a consultation, we cover Newcastle, Durham and Sunderland.

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