Numerous organizations struggle with what is the appropriate method of measuring individual performance or contribution to the goals and outcomes of their organization. Time and again, I meet with organizations that know they are doing well, but have not found a fair and consistent method of assessing performance. Most equate their inability to the lack of a generally accepted and understood method of measuring performance. A common mistake is to assume that measurement has to be one way or another.
There are three major dichotomies that capture the essence of the measurement dilemma:
- Organizational – Individual
- Skill – Effort
- Potential – Actual
Organizational – Individual
Three levels of analysis play a role in positive performance outcomes: organizational, work unit, and individual. In other words, all three levels contribute to an organization successfully reaching its desired goals. However, it is common for employees to be concerned about their lack of control over what others might do as it relates to organizational and work unit performance. Employees begin to look at organizational and individual contributions as being a dichotomy when in reality they are closely related and should both be measured as part of a thorough review process.
Skill – Effort
As discussed in the previous post, employees possess strong opinions regarding potential and actual performance. Most employees desire recognition for the presence of skills as much as the utilization. Conversely, managers usually recognize that difference between an employee possessing the required skills and actually applying the necessary effort. A common mantra among managers is that the team has the skills, but do not seem to apply them to extent necessary. Skill is necessary, but not sufficient to reach positive outcomes. Consequently, both factors need to be measured as part of a performance assessment.
Potential – Actual
Several years ago I worked with a group of organizations that were dealing with employee concerns over their team’s potential performance if extraneous factors were favorable compared to actual performance when outside factors are not conducive. There are a number of factors that impact performance that are outside of an individual’s, work unit’s, or organization’s control. These factors are environmental and many times operate at a macro level. Some of the major ones include: actions by other organizations, resources available, quality of resources, and the outside environment. Performance measurement should not view these as dichotomous decisions since both on their own fail to capture important elements for assessing performance.