Breaking free from individual KPI’s

A new way to inspire high performance
Today's prevailing management system suggests that performance can be controlled through the measurement of individual key performance indicators (KPI's) and monitoring by a manager or supervisor. Ever wondered where the process of annual performance reviews come from? Unfortunately, this model has become outdated as organisations can ill afford to spend time adding so little value to the customer, whilst reviewing past practices that have likely lost their relevance.

A shift in the environment demands a new type of workforce

Previously, the majority of work could be accurately broken down into simple tasks and all you needed were employees that could do these task as efficiently as possible. Motivating individuals through KPI's makes reasonable and logical sense in these conditions

As the world grows increasingly complex through rapid technological innovations, capabilities such as ingenuity and invention are in greater demand. Such behaviours will unlikely come frommeasuring KPI's and may even be inhibited by such systems. Instead, it is inspired through the communication of a compelling purpose and providing individuals the freedom to create and work on aligned objectives.

Take for instance a salesperson that is measured by the number of leads they attempt and sales converted. As customer needs and demands become more varied, a more creative and customer-centric approach may be essential. But instead of exploring this, sales staff are restricted to meeting arbitrary measures. Opening the door to the potential of disingenuous tactics being used as targets become harder to meet.

The issue of high performance and underperformance

What is often asked by people in response to this system of work is ‘how do you fairly judge individual performance?'. In a recent study of over 500 organisations globally, employees ranked peer motivation as the number 1 reason to go the extra mile, followed by an intrinsic desire to do a good job (2nd), feeling encouraged and recognised (3rd), and having a real impact (4th). Interestingly, money came in at 7th place.

What we see from this is that people don't need to be judged by KPI's to perform well, they innately want to do so for their peers and for themselves, all whilst making a real impact. For the small percentage that underperforms, there is no hiding. In fact, the increased accountability of a team would make it even harder to hide. Compare this to a system with individual KPI's that gives no incentive to hold peers to account.

The benefits of an aligned workforce

Whilst it may be difficult to change, there is much to gain. Team objectives would organically produce greater collaboration between individuals and reduce behaviour that undermines organisational goals and values.

Imagine:

  • Call centre staff unconcerned about completing calls within arbitrary time frames, but working to maximise customer satisfaction and preventing the need to call.
  • Operation teams not manipulating their systems to meet productivity measures, but working on reducing waste through process improvements.
  • Managers not just obsessing over their own department finances, but sharing resources to meet company objectives.


These are just a few examples of what this system of work can produce but best of all is an entire workforce aligned to achieving the same goal.

How do you start?

Start where you can. But if you don't know where then your organisational purpose is a good starting point. Is there one? Is your work aligned to this purpose? And if you need a hand, we'd love to have a chat with you. After all, The Agile Eleven's purpose is to ‘make work better for everyone'.

About The Author

Arnold Ho

Enterprise Agile Coach

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