Strategic Performance Management

Prof. K. B. L. Srivastava
Department of Humanities and Social Sciences
Indian Institute of Technology, Kharagpur

Lecture – 13
Measuring behavior and results

We discussed the different approaches to measure performance - behavior approach, result

approach, and trait approach. We will discuss the trait approach as it is a part of the behavior.
The traits, characteristics, and personality are a part of your behavior, which might lead to
better performance. It is not a direct measure of performance.

In this lecture, we will focus on these two aspects. How are we going to measure behavior
and results? It is important when it comes to measuring performance. You have to see the
different kinds of systems used to measure performance.

(Refer Slide Time: 01:14)

How are we going to measure results? When it comes to measuring results, it is the
performance standards and the targets that person has to meet. Once this performance
criterion is established, you use to measure the performance against the criteria. There are
three important factors. At the first stage, we identify different areas. It is called key
accountability areas, or key performance areas, or the key result areas.
Then in each area, we try to find out what are the specific objectives, and for each specific
area, you identify the kind of standards that we need to achieve.

(Refer Slide Time: 02:24)

(Refer Slide Time: 02:33)

When it comes to measuring results, we three things, then we discussed objectives and
standards.

First of all, we identify three important performance or result areas that contribute maximum
to the performance. For example, teaching, research, training, and consulting for a faculty in
a higher educational institute. Once we have identified these performance areas, the next task
is to identify the objectives, which is going to be very specific in all the three cases. For
example, in the first case is teaching, the second case is research, and the third case is training
and consulting. A specific objective is that we will teach two courses effectively to get good
feedback about these courses, and it relates to the first case that has established a specific
objective. The second is the standards that we relate to the research.

Do the faculty have to publish at least two papers annually in a refereed Scopus indexed
journal? It becomes a specific objective. The quality is maintained If a faculty is teaching two
courses, and you expect to publish two papers annually that is a specific objective. Now, the
third is training and consulting. A faculty has to conduct at least one training program and
consulting assignment and generate revenue of at least 20 lakhs through consulting activities.

When we two courses, it means you have specified the objectives against future performances
to evaluate. Publishing two papers are performance standards. One training program and 20
lakh revenue generation is another standard in case of training in consulting. So, teaching
performance is measured through feedback. Publications are measured specifically through
publications in Scopus indexed journal. When you look at the standards, make sure that
meeting these performance standards mentioned. We discussed three things, key
accountability, objectives, and standards.

(Refer Slide Time: 07:26)

When it comes to determining key accountabilities, what are the things that we need to do?
You collect data through the job description, information the tasks, duties and
responsibilities, and also job specifications required by the individual to perform the job.

The first step in collecting information is the job description. We have identified this for a
faculty that is teaching, research training, and consulting, and this comes from the job
analysis of the faculty. It has to be aligned with the department's goal and also the
organization. The organization has a goal to publish say 100 papers by all faculty, and you
also contribute. If there are 50 faculty, so each faculty is going to contribute two papers. If we
ask to generate 10 lakh rupees to every faculty, then the organization will be able to generate
100 lakh rupees.

Your objective is aligned with the organization's goals and objectives. You decide the
performance standards, and depending upon key accountability areas, you contribute to the
performance.

The tasks in the job description are the various activity that you perform. So, teaching,
research training consulting everything is related to each other. It is the key accountability or
the key performance areas of an individual. These key accountability areas contribute
maximum to your performance.

If you know key accountability areas, objectives of each of these key accountability areas,
and what the standards against which your performance will be measured, then you can
produce better results.
(Refer Slide Time: 10:29)

Once you determine key accountabilities of a job, then you prioritize how much importance
you give to each of these key accountabilities. When you provide relative importance, you
have to see how much time you spend on them. You can also spend equal time on all these
three activities. For example, we discussed three performance areas, like teaching research
and training and consulting.

You need to decide to devote more time to teaching as it is your priority or give equal time to
all three areas.

(Refer Slide Time: 10:50)

The main job of faculty is teaching. You spend more time and give 50 percent weightage
because that is your primary job.

After identified key accountability areas and deciding the time to spend on each area, you
provide relative weight to each area because accordingly, you measure his performance. For a
teacher, teaching feedback is the most important thing. The next area is research, his
publications, and research. How much training and consulting activities he does?. It is related
to revenue generation, brand, and employee recognition

We identify the relative importance of each area and the time spent on it. How each of these
accountability areas is contributing to your job performance? Whether it has a significant
impact or not?

For example, you are the quality control manager, and one of your concerns is to ensure that
the rejection rate is 1 percent. So, in the case of a quality control manager, if the rejection rate
is more than 1 percent, you are making an error. If you are making a 5 percent rejection error,
it means it has a significant consequence because the product cost will go up as those
products get rejected, and it adds to the price.

It is important to ensure that all key accountability areas are identified. They are prioritized,
and the employee should know the extent to which it contributes to their performance. It
would help them to give relative importance and weightage to each of the key accountability
areas to perform the job. They also need to see how it will affect the employees in terms of
loss of time or money.

For example, if you are not engaged in teaching well, that is going to contribute not much to
your performance. If you involve more in research and other activities, you are not doing
your primary job. You are losing time, money, everything, but you are not doing your job
very well. You need to ensure and focus on key accountability areas. You make sure that you
go for relative priority. It is based on the relative importance of the job, which contributes to
spending more time. You also make sure that you do the job effectively by making fewer
errors because it is going to be not cost-effective. So, these are the issues related to
accountabilities.

(Refer Slide Time: 14:50)

I am taking one example here to explain how we go about determining accountability. It is an

HR role, and the company is known as data consulting. You can see that data consulting is a
specific role like a training specialist or consultant. The job description of a training specialist
is to identify the training need, analysis, designing, developing and delivery of training,
evaluating training, providing leadership, and also taking strategic responsibility for the
growth and development of the employees.

The job description is based on the role. You can identify the key accountabilities process,
leadership, supervision of nonexempt staff, coaching, team building assessment, instruments,
feedback, product improvements. Based on this, you can identify the key accountability
areas. After this, your next job is to look at the priority. What is more important- providing
leadership to the team or team building activities, and assessment of the employees in terms
of ensuring the performance, the kind of training that offered to see with the practice because
it is a product here.

It can be made more effective by getting feedback from the employees. The example of data
consulting is given to explain how to identify the key accountability areas. You can look at
the job description to start with, and then you can identify the key accountability areas.
(Refer Slide Time: 16:40)

After identifying the accountability areas, the next thing is to determine the objectives, and
you have to ensure that it is measurable.

For example, In the case of a salesman, you identify the targets that he needs to meet like the
number of customers added, number of deals, closed, number of sales made, number of
customers retained. It is the objective, but you should be very specific, like the number of
customers retained. How many deals closed?

So you are going to look at the goals and the measurable outcomes. You need to identify key
result areas, and for each key result area, you look at the results, which will have a significant
impact or significant impact on the success of the employees.
(Refer Slide Time: 17:57)

He is responsible for having loyal customers, retained customers, new customers, and sales
figures, the number of units sold. You say that these are the result areas. So, when you
specify objective, you identify how many key areas are there?. What does this show? Does it
show specific figures related to sales managers? You identify the key result areas, but you
specify the objectives which a person has to achieve.

This objective is measured against the performance standard. When it comes to determining
objectives, you have to see that once you can specify objectives. You can provide feedback.
You also see the things required by the individual. How it is linked with the reward. When it
comes to determining real, try to be specific to ensure that person knows, it is communicated,
and dependent upon what we are supposed to achieve?
(Refer Slide Time: 19:55)

When it comes to identifying objectives, you need to look at the characteristics of a good
objective. It has to be specific and clear. For example, you want to cut costs by 20 percent. It
is specific and challenging, depending upon the requirement. You can stretch, reduce, or
increase it. You are sure that it is agreed upon by everybody, including the managers and
supervisors. It is the objective to achieve. You make sure that it is significantly contributing
to the performance and success of the employees. You also go for prioritizing your goals.

For example, in the case of teaching, it is the most important priority. You make sure that it is
bound by time because you have deadlines and mileposts within which you have to achieve
these goals and objectives. You also make sure that it is achievable. Targets must be
achievable within a given time frame. People are informed about what they need to achieve.
If you are going to follow this, you will be able to set standard objectives and communication
it to the employees.
(Refer Slide Time: 21:02)

Coming to the point, you have to ensure that performance standard is the criteria against
which the performance gets evaluated.

For example, the number of sales figures shows that he can sell 50 units, but the standard is
100 units, which means that he is only able to reach 50 percent of his performance targets. If
the sales figure shows that he can generate 50 lakh rupees while the goal shows that he is
supposed to achieve 75 lakh rupees. What does it mean? It means that he has not been able to
reach the target. For each of the objectives, you need to set standards, and then the
performance is compared against the standard

It is related to specific objectives, including quality, quantity, and time. For example, how
many and what kind of product sold within a period? In a financial year, you expect a
salesperson to sell several products. If you talk about quality within a time frame of 6 months
to sell quality products. Everything is to be covered when you talk about a specific objective.

(Refer Slide Time: 22:47)

How do we go about determining performance standards?

?

When we discuss performance standards, three factors, namely, quality, quantity, and time
are crucial.

(Refer Slide Time: 23:09)

For example, you have the objectives related to research and publications. You have three
criteria related to performance that is quality, quantity, and time, against which you are going
to publish, and you have a specific objective like three papers in refereed journals in one year.

You have to see whether this outcome is meeting these performance criteria or not in terms of
quality, quantity as your publications is in quality journals. Quality has to be specified like it
is in the Scopus index journal or not. If it is in Scopus indexed, or it meets certain criteria
parameters, you can say that it is meeting the quality otherwise not and say the evaluation
period is one year. So, you need to ensure that it gets published within one year.

For each objective, you need to decide the performance standards, which have three
dimensions; quality, quantity, and time and the performance is measured against these
criteria. Quality speaks about the standard parameters of the objectives to achieve. Quantity
talks about the numbers, like how much is produced in terms of frequencycy and costs? You
need to sure that it is cost-effective and whether you have adhered to schedules cycle times
and deadlines.

For example, a production person has to meet the schedules of production and produces a
given number of items in a timeframe, which meets the quality standards, and the three
criteria, quality, quantity, and time.

(Refer Slide Time: 25:23)

Moving to the next part, let us some examples of standards that include action, results, due
date, and the quality and quantity. Look at the example, which says that reduce overtime to
150 hours per month from 250 hours per month by December 1, 2017, and at a cost not
exceeding 12000 rupees. You achieve these standards. One can create standards that describe
the minimum performance and outstanding performance. So, there are two things, when I am
talking about performance, are you meeting the standard targets that are minimum, or you
talk about outstanding performers.
For example, you have to reduce overtime from 150 hours to 40 hours per month. It means
that you are talking beyond the minimum performance from 50 hours, and you want to reduce
it to 40 hours by October 1, 2018, at the same cost. It means that you talk about outstanding
performance. If you look at these two examples, one talk about the minimum or standard
performance, the other talks about the outstanding performers. The question is whether we
want to achieve minimum performance or standard performance.

(Refer Slide Time: 27:18)

The characteristics of a good performance are to make sure that performance is related to the
job the person is doing; it is very concrete, specific, and measurable. Reducing overtime
within a time frame and how much overtime you are going to cut that is measurable, and it is
practical to measure because you go from 150 hours to 140 hours. It does not make sense, as
it is not significant. You make sure that it is realistic and achievable and within a given time
frame. When you set the standard in such a way so that it looks just realistic, somewhat
challenging, which is achievable within a given time frame. So, make a realistic assessment
of the standards. Then you go for a regular review to ensure that you will be able to achieve.
The manager and the individual have to ensure that he can achieve those targets.
(Refer Slide Time: 28:25)

When it comes to behavior, you are talking about the competencies that are the knowledge
and skill base, which is related to knowledge, skill, and abilities. It also contributes to
performance. So, behaviors are the competences. Do you need to assess competencies? How
will you serve your customers? What kind of communication skills you have? How you make
decisions? Are you creative in your thinking or whether your integrity is beyond doubt?
Whether you are dependable or consistent in your approach? You need to explore these
competencies.

Some examples could be related to different kinds of jobs. It is not specific to a given job.
You also need to measure skills to ensure that you can do yourself well.
(Refer Slide Time: 29:18)

What are the different kinds of competencies? We need to differentiatee between minimum
or threshold competencies and differentiating competencies. Threshold competencies are
having the minimum standard or minimum competency knowledge, skill base to reach a
standard performance level. Differentiating competencies means that you are above average.
So, your performance would be better. Those who have threshold competencies will be able
to achieve standard performance level, and those who are differentiating themselves or
having a high level of competencies they would be able to reach above average and superior
performance.

I will give an example of an IT project manager and a professor. For an IT manager, the
differentiating competency is process management, ability to manage project activities. The
threshold competencies are change management, knowledge of behavioral science,
operational skills, and sensitivity to motivate. What kind of competencies would lead to
standard performance, and what kind of competencies would lead to superior performance?

People need to have both kinds of competencies, but if you do not have to differentiate the
competencies, you cannot perform well. For example, in the case of professor, effective
communication is important, despite knowledge and skill base, and conveying information
within a given time frame is related to the differentiating competencies. The other one related
to threshold competencies.
(Refer Slide Time: 31:03)

Look at the example here. There is one competency known as leadership. This competency
has five indicators 1 2 3 4 5. These competencies are subordinate support, ask about the
wellbeing of the employee's life outside the work, encourage subordinates to reach the
established goals, get to know employees personally, respect for employees. If you look at all
these competencies which show his leadership competencies, it could be at the threshold
level, or it could be differentiating depending upon the extent to which this is present.

(Refer Slide Time: 31:48)

What are the different kinds of competencies or the components of the competencies? What
do you mean by leadership? You talk about the different indicators of the competencies.
What are the behaviors that you relate to each of these competencies? What level of
competency is being shown by the individual? The measurement of competencies depends
upon the judgment of the supervisors, line managers, and HR managers.

(Refer Slide Time: 32:26)

Based on identifying these competencies, we measure the competencies depending upon the
data given by the individuals. It depends upon the judgment, the level of competency present
in the individuals.

Thank you very much.