Do You Measure Performance for Compliance or Commitment?

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The monthly performance reporting and review is done in every business. Employees diligently produce the dashboard and business leaders meet on a scheduled day to discuss the results. As common as it seems, the exercise is a dreaded one in many organizations. For those who don’t appreciate the value of performance measurement, they do the work to comply with management requirements. For others who understand the purpose, they are committed to distil the insight from the results and take action to improve the business.

There are differences between the compliance and commitment attitudes toward performance measurement.

  1. Measurement approach

When viewed as a requirement to satisfy management need, the mindset focuses on getting it done. From identifying which results to report on to compiling and analyzing performance, the preparer of the dashboard aims to get the work done as expediently as possible. Expediency is good but it doesn’t imply quality. The selection of the key performance indicators (KPIs) might orient heavily on financial matter, industry benchmarks, and trivial operational statistics. Producing the dashboard is perceived as work which competes for time that could have been devoted to ‘real’ work.

On the other hand, the committed attitude focuses on making the performance measurement work meaningful. Much energy is devoted to ensure that appropriate results are monitored. The chosen KPIs support the business strategy and desired results. The strategic and tactical KPIs are aligned, though they might change over time to realign priorities and resource allocation. There is conscious effort to garner as much insight as possible.

  1. Review and follow up

In organizations where results monitoring is viewed as just a routine to update management on the state of the business, there is less rigor in dissecting the information presented. Gross analyses and deductions offer general directions the business needs to pay attention to. The lack of ownership and follow through undermine the value of performance measurement. The lack of ownership and follow through undermine the value of performance measurement. Share on X

Conversely, businesses with a committed attitude look for insights to drive change. They are disciplined to assign ownership so that someone is held accountable for performance. This ensures that there is proper follow-up on issues. At the same time, the tightly integrated measurement approach makes it easier to foster collaboration across departments, advancing the business mandate and outcomes.

  1. Culture

The key difference between the compliance and commitment attitudes is how individuals throughout the business embrace performance measurement. The perception shifts from a required assessment tool to a critical discipline for performance optimization.

It is difficult to get employees excited about results monitoring when there are concerns about reprisals. No one wants to look bad. As a result, employees keep a lid on known problems. On the contrary, an embracement culture displays confidence in openly discuss poor results and issues. Employees collaborate to improve performance. They strive to understand the work of their colleagues in order to better support each other. They look out for improvement opportunities. Essentially, the business gains coherence in the day-to-day decisions and operations.

It is possible to switch the attitude toward performance measurement from compliance to commitment. It needs to start with the leaders demonstrating value the work brings. It will take time for the transition, but it is worthy of the effort because the business will become laser focused on top priorities. The results monitored reflect useful insights and everyone is prepared to collaborate for the best business outcomes.

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