BOTH the results and the underlying employee behaviour need to be measured and evaluated if a performance management system is to drive both short and long-term business success.
The Human Capital Telescope with Brett Chulu
At the back of the minds of many business leaders in Zimbabwe is an awareness that both results and behaviour matter, but in the absence of accepted practices, results are what is formally measured.
In our consultancy assignments, business leaders agree that both results and employee behaviour need to be measured.
To illustrate the importance of having a performance management system measuring both results and behaviour, we shall briefly consider a real business story that happened recently.
An owner-manager of a fast-growing business in Bulawayo recently explained to me how his company severed ties with a well-known software developer who had been contracted to install and support enterprise resource planning (ERP) software.
When I asked if the reason for ditching this well-known supplier had anything to do with lack of competency (technical skills and knowledge), he surprisingly told me that when it came to technical proficiency the supplier was unrivalled.
He revealed that he had a problem with a senior technician assigned to deal with his company, though the technician could do his job very well, he had a big attitude problem.
Our owner-manager friend simply cut business ties and opted for another supplier, whom in his words “you enjoy working with”.
Here is a company that perhaps prides itself in superior technical competency as its competitive advantage. Perhaps, in their performance management system, the ERP supplier measures their technicians on their ability to successfully install and maintain a client’s software.
They could be tracking that by measuring the number of requests to rectify installation and maintenance-related problems. Perhaps our technician is considered a high-performer on the basis that his clients do not request for re-works — he gets things right first time.
After all, by a consistent record of right-first-time installations, is he not saving the company on fuel costs and unbilled re-work time?
However, what the company in this situation might be oblivious of is that the behavioral side of the technician is posing a serious business risk. It might take a while for the company to realise the damage to future business prospects the brilliant but-behaviourally-risky technician is causing.
Those who are against the formal evaluation of behaviour almost always advance the argument that measuring employee behaviour is notoriously difficult and highly subjective. When we interact with our clients in consultancy assignments, we like to pose the following scenario: John is a high performer who is a straight 5-pointer (the highest score on a 1-5 rating scale).
John is well-known for exhibiting poor behaviour in the course of his work.
Such negative behaviour includes being rude, abrasive, individualistic, for instance. Max is another straight 5-pointer and has a strong reputation for being collaborative, emotionally intelligent, for instance. Who is a better performer, John or Max? The answer is pretty obvious—Max is.
Ironically, the results-only performance management system ranks John and Max equal.
Should John and Max get equal rewards? Almost always, our clients come to see the point we would be driving at—John is destroying the business’s long-term sustainability.
Another interesting dimension to the John-Max dilemma is brought to the fore of discussion when we ask the question: If John and Max do the same job, who would you recommend for a promotion? As expected, Max gets the vote.
Beneath the glitz of John’s apparent success are peers and subordinates not reaching their potential as a result of John’s negative behavioral tendencies.
Results measure past performance. Behaviour points to future performance. Clearly, measuring both employee and organisational behaviour is of strategic importance.
Seen from this angle, a performance management system that focuses on behaviour, in addition to results (past performance) becomes a business-risk management tool — a business-risk mitigation tool, to be more precise. That should not be too difficult to see; by recognising and rewarding behaviour, a forward-looking performance management system becomes a tool for building and sustaining a culture valued by consumers, potential investors, shareholders, regulators and other external interest groups.
Column three years old this week
This column was launched on May 7, 2010 and I would like to thank all its regular readers. It is humbling to meet readers who stop me and offer appreciation of what they learn from the column. It is also humbling to know that some business leaders formally discuss some of the ideas with their teams, the ideas from the outside-in performance management article published last month, being a case in point.
I am giving away five books on performance management to five regular readers of this column.
All you have to do is to email me and share with us how a particular idea or ideas discussed in this column in the past three years have had an impact on you either at the personal or organisational level. In case you are wondering why I am doing this—I am practising what I preach—recognition is a non-monetary reward that you can liberally use to reward performance.
Reflect on it
That formally measuring the behavioral performance of employees is notoriously difficult and highly subjective should not be used as an excuse to shirk measuring employee behaviour.
Instead, innovative solutions should be crafted so that both behaviour and results are measured and rewarded. We have already come up with innovative solutions that are being implemented in Zimbabwe.
Chulu is a strategic HR consultant who is pioneering innovative strategic HR practices in both listed and unlisted companies. — firstname.lastname@example.org.
Chulu is a strategic HR consultant who is pioneering innovative strategic HR practices in both listed and unlisted companies. –email@example.com.