November 18th, 2010 | 6:00 am

The Other Side of Performance Metrics?

filed under News, Office Politics

iStock_000004944174XSmallBy Elizabeth Harrin (London)

If you complete timesheets, you’ll know how important it is to make sure the numbers at the end of the month look good. After all, you’re judged as much on the time you spend at work – which might even be billed to clients – as you are on what you actually do.

But what would happen if we scrapped the insistence on measuring time spent at the desk and focused solely on results? Surely the working world would be a happier place, with employees judged and rewarded on their contributions, and able to go home early if they meet their objectives before 5pm. Unfortunately, there are also issues that come with adopting this type of working culture. Employees could focus on their targets to the detriment of being a team player. It could increase competition in the office and have a damaging effect on morale. These are some of the reasons that managers fail to embrace an organisational culture that looks at performance metrics as more than just hours chained to your laptop.

What do you have to lose?

“I don’t believe we lose anything – either in off-site or traditional settings – by evaluating performance based on outcomes,” says Linda Pophal, author of Managing Off-Site Staff. “In fact, I think that should be the preferred way to manage people whenever possible. We are, after all, not buying people’s time, but their results. If somebody takes more or less time to produce the same results, should they be paid more or less? I don’t think so.”

The conundrum is that managing by timesheets is easy – managing by setting goals tied to corporate objectives and measuring performance against these through ongoing quantitative and qualitative metrics is hard.

“Managing based on specific outcomes is more difficult,” says Pophal. “It requires, first of all, that they have quantified what the outcomes are that they’re looking for and placed a value on those outcomes. It’s much easier to just ‘pay by the hour.’ But, not necessarily, more beneficial, for either the employee or the organisation.”

Breaking Down the Silos

One of the challenges of using performance metrics that relate directly to work done is that people could end up focusing only on their piece of the picture. If people are only rewarded for their bit, there’s no incentive to see the impact of the task as a whole.

“Employees who are focused on results can be viewed as working in a silo,” says Meryl Rosenthal, CEO and President of FlexPaths, LLC. “However, working in a silo is not sustainable nor is it desirable and is a mindset that must be broken. The reality is that communications and collaboration among individuals, teams, departments and divisions is essential to fostering diversity of thought, creativity and innovation.”

That means putting results-based performance metrics at the heart of the company. “Creating a results-based organisation does not happen at the individual level,” Rosenthal says. “It requires a commitment from the senior-most leaders. Therefore, it is critical to create a clear outcome-based performance measurement system that begins at the top of the organisation and cascades to individual performance goals and metrics that are tied to corporate objectives and priorities.”

Seeing the Corporate Benefits

It’s not every company that has flexible working policies in place, but most good managers will tell you that we need flexible ways to address management challenges in an ever more complex international marketplace. “Competing in today’s global work environment requires more advanced approaches to how work gets done,” says Rosenthal. “Numerous studies indicate that results-based management – where performance is measured by results, not face time or hours booked – increases loyalty, engagement and productivity, and fosters greater teamwork leading to increased revenues and profits per full-time employee.”

A flexible workforce motivated by metrics that reward their contribution, not just their presence, driving increased profits? Sounds like every manager’s dream. So why aren’t all organisations buying into measuring performance this way?

“Depending upon where companies are in their flexible working journey – initiating, enhancing or advancing their culture – they need to evaluate and solve for training, education, tracking, administration and performance measures that support a results-based culture,” says Rosenthal. “Only then will companies move toward de-emphasising when and where work is done.”

Rosenthal’s own company, FlexPaths, is an interesting case study in results-based management. As a global provider of web-based flexible working solutions, they don’t have office buildings and all staff work from wherever it suits. “Every employee and contractor works virtually and is able to customise their own work schedules to meet the needs of our business, which is effective with the right talent,” Rosenthal explains.

Having the “right talent” is key to making this type of performance measures a success. So much depends on how people view ‘traditional’ results-based metrics in comparison to rewarding outcomes. It’s a big shift in mindset.

Overcoming Perceptions

“When the metrics are fulfilled, both men and women will state that ‘performance is what matters’… but in reality men look at more than just the actual performance,” says Shaunti Feldhahn, author of The Male Factor. “Part of their ‘unconscious performance metric’ is, ‘Does that person share the weight of the world on their shoulders, and are they sharing the same pain as me?’ That is a very real part of the equation to them. That is why you almost never hear men say what women say frequently, such as, ‘It shouldn’t matter if I leave at 4pm to get my kids as long as I’m getting the job done.’ When there are other unconscious ‘male culture expectations’ out there, that is going to impact how the performer is viewed.”

Whether this mindset is held by men or women in the workplace, it can undermine the positive difference that performance-based metrics can bring. That’s why a top-down, corporate adoption of this approach to measuring work will have the most success. There might be challenges to creating a working environment where people are measured and rewarded for their contribution, not their hours, but as managers we should be looking for ways to make this type of culture the norm. After all, if we’re to be measured by results too, we need to be making a positive difference every day.

3 comments

  1. Jennifer Peek

    “It’s a big shift in mindset.”

    How true…and not just for the employer but also for the employee. It requires management to be able to recognize the right talent to work in an environment that is results-based. It requires employees who are comfortable and motivated by a results-oriented culture (vs. a time-based one).

    Having results-based measurements, though, can be a great step in the direction of work/life balance when done well. Employees are able to structure their activities to meet the defined goals and feel empowered with the results (since that is the real focus). Management can get away from managing the clock and focus on the projects. Win-win.

    But it is a huge shift – and it will be a challenge for many to get there.

  2. ferd

    Sounds like you’re on the right path. However, I see two major stumbling blocks. First is “having the right talent”. Although it is true that appropriate talent is crucial, most managers do not understand and cannot recognize what “right talent” is and either squander it or chase it away. This is an extreme problem when non-technical managers try to manage technical talent. The second stumbling block is that through most of the article the author pushes the idea of teamwork, but then at the end falls into the old gender traps. If your focus is on unfair treatment between the sexes then you will never achieve the flexible performance-orientated teams that you seek. Yes, men and women think differently but successful teams take advantage of all facets of their members. Stop whining about perceptions and create a truly flexible work environment that educates all workers about individual differences and that includes reasonable compromises. Gender battles distract from the true goal, which is getting the best use out of team member talents.

  3. NEWS: Shaunti Feldhahn of “The Male Factor” Speaks Out on Overcoming Perfomance Perceptions In the Workplace « WaterBrook Multnomah

    [...] The Male Factor author, Shaunti Feldhahn a Harvard graduate and Wall Street veteran, is featured in GlassHammer.com’s article  “The Other Side of Perfomance Metrics?” Feldhahn knows what she’s talking about, having led nationwide surveys and confidential interviews with more than 3,000 men, ranging from corporate CEOs to factory workers. To read more click here [...]