Example — When two people are playing tennis, initially they lob the ball to each other. Then one player says lets play a game. What happens to the level of intensity when practicing stops and play begins? The reason the level of intensity increased is because you are now keeping score.
Performance measurement should be part of your management system, not accounting. It’s not about the numbers, but what management actions you take with respect to the numbers. You can only manage what you can measure.
For years my bonus compensation was based strictly on my organization’s financial performance. In the mid 1990's two Harvard professors, Norton and Kaplan developed the "Balanced Scorecard." They recognized that the health of an organization required more than just measuring financial results. In fact, financial measurements tell the story of past events.
In addition to the financial perspective the following perspectives are included in the "Balanced Scorecard":
- Innovation and learning – How do your employees feel about your organization?
- Customer – How do your customers perceive your organization?
- Internal process – Are you proactive in process improvement?
One key point to remember is that without satisfied employees you will not have satisfied customers, new and innovated process improvements and the "bottom line" will suffer.
What do employees want from the organization?
- Improved ability to achieve work and personal life balance.
- Increased appreciation of, and respect for, individual contributions made while working in a team environment.
- Active involvement in the creation of a shared vision.
- Empowerment to make the decisions to get the job done.
What do you believe your employees want from your organization?
Tom Nichols, president of Process Management Improvement, Inc., provides research, AP process improvement consulting, training and seminars to large companies and financial associations. Email Tom Nichols
