Why have KPIs become the problem, not the solution?
I believe this occurred by a misinterpretation of the term Key Performance Indicator.KPIs have become confused with the bad old performance management process, simply because they share the word performance.Performance management uses achievement of personal objectives as the focus of the process. The hapless employee is measured against the demanded, or sometimes agreed,target. Little wonder that they feel like the goat tethered to the stake, waiting for theinevitable fate, as they are told that they have not achieved their KPIs.Achieved or Not Achieved? Bonus or No Bonus? Pay rise or No Pay Rise? Promotion or Demotion?The problem is that an individual cannot have a KPI. A person can have an objective, butnever a KPI.
A KPI belongs to a function; not to a person.
A KPI evaluates functional performance,contribution to the organizations performance and it belongs to the manager and the team.The manager is accountable and the team is responsible.As soon as you accept that a person can never have a functional KPI you transform your understanding of the purpose of a KPI Model.
The real key to resolving the problem of fear and greed.
Experience with high performing organizations around the world has enabled a robust process to be developed for gaining acceptance of KPI models and, implicitly, adoptionof sound performance management by the whole organization.The secret is to tap into the deep knowledge of the people doing the work. One simplequestion serves this purpose."How do you know if you have had a good day?"Ask this question in a workshop with all managers and supervisors present, and they willgive you the KPIs for their function. List them and use them as a point of reference. Now you have a base for constructing your KPI model, and it is simply a process of teasing apart, as a group, the sequence of functions that the organization must perform tosatisfy its customers.Yes; there are many iterations of the modeling process before you get it right, and it mayhelp to have an experienced facilitator, but there is no high tech gear needed. This is ahigh touch process of working together with pencils and lots of large sheets of paper.Along the way, managers learn what staff know about their work, and staff learn how adecision at some point in their process affects the overall business performance. Suddenly