Key Performance Factors and Indicators

 

Introduction

1 Organisations divide up their work (their objectives). They group together various pieces of work (objectives) and call them positions (= jobs). They give a position to a person (a Position Holder).

2 Thus, each Position Holder (PH) does different pieces of work i.e. tries to achieve different objectives.

3 Assumption. Some work (objectives) which a Position Holder does (or should do) rates as more important than other work.

4 In other words, if a PH (Position Holder) does not do some work well (achieve some wise objectives), it will mean that their Section or Division or the Organisation cannot perform well.

Key Performance Factors

5 These notes use the term “Key Performance Factors”* to describe such important pieces of work (= important areas of a position).

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Checking – Part 1

Introduction

1 These notes (Part 1) define “checking”, list the stages in checking, and discusses the two major processes in checking. The notes list the inevita­ble elements involved in all checking and discuss some important ideas in measurement and the point that some measurement scales appear to offer evaluations when really they just measure something.

2 Next they discuss (a) ‘Why measure something and (b) when to check under the two headings of (i) the possibilities for deciding when and (ii) the factors which Checkers should use to decide when.

3 Finally they discuss who should check and who should receive the check.

4 Part Two of these notes discuss what to check. Then they concentrate on the evaluation part of the checking process and cover standards (meaning, purpose, the need for Subordinates to accept, and when to set them); who should evaluate and the relationship of checking to controlling.

A Definition Of Checking

5 The definition of checking given below probably agrees with the common usage of the word – Checking: The Measurement Of Something And A Comparison Of The Result Of
The Measurement With A Standard

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Exercise – Improving the Performance of Sales Managers

Introduction

1 The ABC Company operates three different Product Divisions throughout Australia. Each division has its own Sales Representatives.

2 The number of Sales Representatives in each Division varies. Division “X” has nearly as many Representatives as Divisions “Y” and “Z” combined. Each Division has a Sales Manager in each State, except Tasmania where the one Sales Manager manages Representatives who sell the products of all three product groups. In Victoria, New South Wales, and Queensland all three Divisions have one or more Sales Supervisors. Division “X” has Sales Supervisors in all States.

3 The Marketing Manager asked an outside Consultant for assistance in Improving the performance of the Sales Managers/Supervisors.

4 The Consultant asked the Company to indicate both the strengths and weaknesses of the Sales Managers. The Marketing Manager consulted State Managers and other appropriate people and presented the Consultant with the information.

5 The following shows the weaknesses identified.   In introducing these weaknesses, the Marketing Manager pointed out that he had only included an item in the list where a majority of the people consulted believed that the weakness existed in at least five Sales Managers and/or Sales Supervisors.

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The Evaluation of a Sales Manager’s Performance

Introduction

1 The following questions should help Sales Managers to evaluate their performance. They will identify areas of their work that they have (a) considered and (b) not considered.

2 These notes do not attempt to lay down any standards of performance; they identify the areas to which a Sales Manager should pay attention.

Questions

Objectives

3 What objectives exist, in writing, for:

(a) the Sales Department

(b) Representatives

(c) other Members of the Department?

4 What variations between objectives should exist between

(a) the various types of Representatives* (if the Organisation has different types of Representatives) and

(b) different Representatives within the one type?

5 Do the Sales Force understand their objectives?

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The Evaluation of a Sales Manager’s Performance

Introduction

1 The following questions should help Sales Managers to evaluate their performance. They will identify areas of their work that they have (a) considered and (b) not considered.

2 These notes do not attempt to lay down any standards of performance; they identify the areas to which a Sales Manager should pay attention.

Questions

Objectives

3 What objectives exist, in writing, for:

(a) the Sales Department

(b) Representatives

(c) other Members of the Department?

4 What variations between objectives should exist between

(a) the various types of Representatives’ (if the Organisation has different types of Representatives) and

(b) different Representatives within the one type?

5 Do the Sales Force understand their objectives?

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Definition – Evaluating

Evaluating – Any activity which tries to (a) measure the performance of something and (b) compare the performance with a standard.

Notes

Activity

1 The definition describes evaluating as an activity which includes the activities of measuring and comparing.

Tries

2 This activity tries to achieve a comparison and a measurement. This definition calls the achievement, an evaluation i.e. successful evalu­ating. However the definition does not necessarily define a wise or good evaluation.

Measure

3 This definition uses the following definition of a measurement the assessment of the class, magnitude, or quantity of anything.

Performance

4 The activity of measuring relates to a something – usually the per­formance of something.

5 Examples. Measure the distance of something, the time to do something, the number of something, the class (eg. col­our) of something.

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Framework – Continue, Start, Stop (CSS) – Improvimg Performance

1 In criticising the performance of a person or a group,  the three words: Continue, Start, Stop (CSS) provide a useful framework for help­ing to analyse the performance.

2 Example. A Sales Manager observing the performance of a Sales Representative can discuss what the Representative should continue to do, start doing, and/or stop doing.

Practical Application

3 Sometimes people forget that they need to identify what people should continue to do. They take it for granted that because they ap­prove of something the other person knows of the approval. Thus en­couragement for a person to continue to do something will not only help them to continue doing it but provide a useful piece of encouragement.

4 In addition the three verbs provide a simple classification to help think about ideas to improve someone’s performance.

5 People can use the framework as one approach to planning and con­ducting appraisal/counselling interviews.

6 They can just have it in the back of their mind or tell the Inter­viewee the framework as well.

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Framework – Evaluation: Four Inevitable Activities

1 The following four inevitable activities must occur in evaluating anything.

(a) Select a Scale

(b) Measure Performance

(c) Set a Standard

(d) Compare Performance Measurement with the Standard

Application

2 In evaluating anything, something can go wrong with any one of the four activities. A Manager can:

(a) select the wrong scale (e.g. measure a Sales Representative’s performance by sales as opposed to profitable sales).

(b)  measure performance incorrectly (e.g. sales to the Representative’s territory wrongly allocated to a different Representative.)

(c)  select an inappropriate standard and therefore make a decision which rests on an incorrect evaluation (e.g. three large factories close down in the Representative’s sales territory and no new ones open and the Company uses the same standard as the previous year).

(d) make some error in comparing the performance measure with the standard.

3 All too often people evaluate something without realising one or more of the inevitable activities involved.

4 A thorough recall and understanding of this framework will help to (a) analyse errors/weaknesses in evaluating and (b) plan better evaluations.

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Framework – Performance Elements

1 Managers often have objectives along the lines of – Improve performance of …………..  (e.g. Tom, Mary, Dick,) with respect to …………….  (e.g. writing a letter).

2 Thus they need to look at the elements in performance to (a) analyse the important parts related to their objectives and/or (b) plan to achieve something useful with respect to improved performance.

3 The following useful framework identifies three elements of perform­ance:

(a) Ability

(b) Motivation Pattern

(c) Role Perception

4 Role Perception refers to the objectives a person believes rate as appropriate for any job performance.

5 Sometimes people have both sufficient ability and an appropriate mo­tivational pattern but the wrong role perception (i.e. inappropriate objectives). They try hard for the wrong objectives. Even if they achieve them, their performance would rate as low quality.

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Some Ideas for changing the Standard that a Person has for a particular Piece of Work *

Introduction

1 Sometimes people do not perform part of their work satisfactorily – according to the standards held by their Manager.

2 Sometimes Subordinates feel they have performed satisfactorily because they have a lower standard than their Manager uses. Thus, while the Manager criticises a below-satisfactory performance, the Subordinates classify the same performance as satisfactory, because they use a different standard.

3 When Managers find out this situation exists they should realise that it will prove of little value to keep pushing the Subordinate to improve performance because the Subordinate already believes the performance rates as satisfactory or better. A Manager who wishes a Subordinate to increase his/her performance will need to increase the standard that the Subordinate rates as satisfactory.

4 These notes examine some ideas for changing a standard held by a Subordinate. This action assumes that once Subordinates increase the standard they will automatically feel dissatisfied with their performance and want to increase it.

Some Specific Ideas

Produce Evidence that Others Use a Higher Standard

5 Sometimes Managers will find that other people use a higher standard than the Subordinate whose performance dissatisfies them. In this situation they can give this information to their Subordinates and create some doubts in their mind regarding the suitability of the standard that the Subordinates use. Continue reading