Metrics: How to Improve Key Business Results Part 22

Believe it or not, most deserving workers will feel embarra.s.sed to nominate themselves, so they will feel even more slighted that you are forcing them to do so or get someone else to nominate them-again, it should be management's job to notice.

The Halo and Horns Effect. Workers already believe that there are "favorites." When you inst.i.tute a program that continues to reward those believed favorites, even when they haven't done anything "lately," and continues to ignore the good works someone who hasn't been in the limelight in the past performs-the workforce is rea.s.sured that the wealthy become wealthier and the poor become poorer.

Of course, you can attempt to base your rewards and recognition on performance measures, but that has its own set of problems-including encouraging "chasing data." In the end, these issues are only important in as much as they affect the metrics you will develop and use to determine your organization health.

Measuring Organization Health.

Understanding the underlying viewpoint of the workforce will help you properly design metrics for this quadrant. When you look at each of the measures, you have to keep the possible issues and missteps in mind.

Employee Satisfaction Measures.

No surprises here. You'll have to include the task of asking the employees how they feel. But besides gathering the subjective responses to interview or survey questions, we'll still lean on triangulation to gather other measures. We'll want some objective measures like retention and turnover. We'll want to know the number of types of grievances logged. The rules of creating good metrics haven't changed-just the focus.

Training.

Training measures should include skill levels, changes in skill levels, and the amount and quality of training received. You can also have maturity-based questions like: Do employees have training plans?

Is there a professional development program used?

How often are skill levels a.s.sessed?

Is there a cross-training program in place?

But other simple measures also work, and include the following:.

The number of training hours used.

The number of workers received training.

The number of employees taking advantage of in-house training.

The difference between required skill levels and existing skill levels-and whether it is improving.

Training should also include skills. Besides the suggestions already given, you can measure how many of your employees are seen as experts in their field? Do other companies seek them out for advice? Do your peers consider your staff to be experts? Are your workers published? Are they presenting at conferences? Are they encouraged to be recognized as experts?

Work Environment.

Again, surveys will work well to determine employee satisfaction levels. But as with employee satisfaction, you should find other means of gathering the measures; hopefully more objective ones. The following are possible measures of the health of the work environment: Number of sick days and/or vacation days used (extremes in either direction can be an indicator of an unhealthy work environment ).

Employee turnover.

Laughter in the halls (and if it continues when the boss walks by).

The number of pictures on employee's walls (do your employees make their works.p.a.ce pleasant for themselves or does it resemble a jail cell?).

Early arrivals, late departures.

For all of the examples, the question isn't what's good or bad, but whether you're seeing extremes or anomalies. In either case, they are indicators that there may be issues with the health of your work environment. While negative extremes (high absenteeism rates for example) may be worrisome, any extreme (workers not taking their vacation time) can also be an indicator of problems. Besides extremes, you will need to investigate when anomalies (things out of the established norms for your organization) pop up.

Reward and Recognition.

It is important that you know if your people feel valued. Besides measuring if the employees are rightly rewarded and recognized internally, you'll also want to measure if they are being recognized and rewarded by outside inst.i.tutions. Some questions leaders.h.i.+p or management may want to consider include the following: Are employees doing great things?

How well do you know your workforce?

Do you know what your employees' hobbies and pastimes are?

Do you know if they are winning awards for non-work related efforts?

Are your workers contributing significantly to the community?

If you want to measure the effectiveness of your "reward and recognition" program, you may want to use the employee satisfaction measures. It will be hard to measure the worth of your program without seeing if the workers believe you are doing so properly. You could measure the program itself, including the following: The number of awards distributed The number of workers nominated for awards The number of unique workers recognized each year These would be the measures I would suggest for an immature organization. The problem with a reward-and-recognition program is that you need one. Funny how we reward and recognize our children without a formal program. Funny how we care enough to pay attention to their successes and failures. Parents know their children's accomplishments because they care about their success. Many times parents feel their children's successes are also theirs.

Too bad managers don't seem to be able to do this, even though there is normally a concerted effort to ensure people don't supervise too many individuals.

For some reason, managers seem unable to pay enough attention to their workers' successes. Conversely, managers seem to know each worker's missteps and mishaps intimately. This may be because errors are elevated to the manager while many times good works go unheralded. I'm not going to try and solve the complexities of trying to implement a reward and recognition program. But I do want to stress that measuring the program will be problematic since you probably don't want to need a program. It would be much better if you had a culture of recognition.

That's something worth measuring.

Future Health.

The next quadrant I suggest you tackle is Future Health, Quadrant 4, as shown in Figure 11-3.

Figure 11-3. Quadrant 4 of the Answer Key.

Concepts.

Let's look at Quadrant Four of the Answer Key. When I talk about future health, I'm not referring to the projected financial situation of an organization. You may have noticed that I haven't mentioned the financial stability at all. That's because the metrics I'm presenting in this book are around health in terms of maturity, not finance.

There are many existing measures of financial health (the Fortune lists are an example) and for measuring the future potential for financial growth. This area is well trodden and I doubt you are being asked to develop or inst.i.tute these types of metrics. You should be able to find many resources on measuring a company's financial health-like price-to-earnings ratio, liquidity (how much cash the company has on hand), or leverage (the amount of money a company is borrowing in relation to its capital).

The future health of an organization from a maturity standpoint includes how well the organization can take on and achieve large-scale projects and programs. Implementing a metrics program would actually fit under this umbrella. How well can the organization take these complex tasks on? Is the organization capable of more than just getting the day-to-day operations accomplished?

When I coach others on vision setting, I remind them constantly that they can't afford to get bogged down with the tactical. They have to see things at a strategic level, plan at a strategic level, and stay focused on long-range goals. Immature organizations can't do this. If you find that you're swamped with the daily grind and can't lift your head up long enough or look up high enough to see the long-range goals of the organization, your future health is in question.

At basic levels, the organization must be able to set strong goals for the future, prioritize its work, and be able to complete project- or program-level work. If the organization can't do any of these components, chances are it will never grow. It will be stuck in the present.

Project/Program Status Measures.

To measure project and program execution requires that you have policies and procedures for carrying out these larger-scale tasks. Normally, projects require cross-functional involvement and sharing resources across different units within (and possibly outside) the organization. The simplest measures to start with around projects are health metrics of the efforts themselves. These can be built around status updates, which may ask the following: How many projects are active?

How many are in the queue?

How many are on hold?

How many have been completed?

You can go further with the project metrics. Our organization has developed a comprehensive set of measures, including: How well projects met the schedule.

How much we deliver against what was expected.

How well we deliver to budget.

Quality of the deliverables (how many defects are present).

As with the first and third quadrants, we also want to use triangulation to ensure a rounded set of measures. To that end, you can add in measures of Sponsor/project owner satisfaction with the results.

How well the products of the project are used (level of inst.i.tutionalization).

Many of the measures of Project/Program Status look like the measures you'll use for goal attainment. This is logical since most projects can be described as a concerted effort to achieve a specific goal.

Strategic Planning and Goal Attainment Measures.

If you've developed SMART (specific, measurable, attainable, realistic, time-bound) goals, the measurements have already been defined. These will be measures of success for the goals. Even in this case, I warn against chasing the data rather than realizing the dream.

Say your goal is to "increase members.h.i.+p by 50 percent over the next six months." That's a pretty clear goal (specific). It's definitely measurable (current members.h.i.+p compared to members.h.i.+p in six months), attainable (let's a.s.sume there are enough potential members to make it attainable), realistic (again, a.s.sume that it's not beyond reason), and time-bound (six months from now).

So, you may argue that if you achieve the 50 percent increase, why not chase the data? The goal is in the data-to increase members.h.i.+p! And to a degree you would be absolutely correct. The problem is that we are only working with the stated goal and not the reasons for the goal. This is why the measurement area includes strategic planning. If you purely chase the data, you may find ways to increase the members.h.i.+p that wouldn't meet the underlying intent of the goal (long-term or permanent expansion of the members.h.i.+p base). You may change the rules of what const.i.tutes a "member" so that you can achieve the number. You may offer incentives that only result in a temporary increase (meeting the goal but missing the mark).

Besides the stated measures within the goal definition, you may also want to measure the following: The cost to achieve The time to achieve (showing progress over time).

Realized benefits of achieving the goal (a tough one that is rarely captured).

Specifically for the Strategic Planning portion, you'll want measures of the effectiveness of your planning. These may include the following:.

Overall goal attainment (as components of the plan).

How well you met the plans timeline.

How well you met the plans resource plans (costs, time, effort).

How well the plan was followed.

How often the plan was revised (the more it is adjusted, the more likely it is a living, useful plan vs. shelf-ware).

While measuring the worth of your strategic plan, achievement of your goals, and the effectiveness of your projects and programs, you will realize that to do these well requires a level of prioritization. They can be either formal or informal, but you need a process for setting priorities in either case.

Priority-Setting Measures.