Thoughts on Performance Management

Reading “The Five Traps of Performance Management”, HBR, October 2009:

Great article.  Highly recommended.

1. Metrics should be derived from external sources whenever possible to avoid the bathwater and self-serving/self-replication problems.  When no external standard exists, ask your customer — and everyone has a customer.

2. Measure against your future, not your past.

3. Check back on your decisions.  You can’t learn unless you examine the results of past decisions, objectively, I presume, which is very difficult.  Be honest.

4. Use numerical metrics when the outcome is numerical and don’t shy from non-numeric metrics

5. Use multiple metrics to measure different aspects of the same goal and to reduce the potential for gaming the system.  There is probably a tree-structure of metrics.  It’s rarely one thing.

6. Keep your metrics a moving target.  They don’t need to be the same every year.  Add, subtract, multiply, and divide.