Performance Management - beyond count and comparison

If machines are going to do all the repetitive, boring tasks and leave humans to do only creative work, performance management has to be redesigned to measure creative work and creativityWork is an outcome of the collaborative effort of humans and machines. This is not surprising nor unknown, however, just to highlight how work is a collaborative effort, we can take the example of algorithms that help stock exchanges buy and sell at lightning speed, or the case of Alibaba that launched its biggest sale on Singles Day in Nov 2018 with their warehouse equipped with 700 robots who supported a handful of humans. Alibaba ended up selling products worth more than $30 billion on that day in a 24-hour period — a feat that could not have achieved by humans alone.Machines augment us, our ‘human’ capabilities at the workplace, and even in our personal lives. For example, we routinely pull out calculators or use spreadsheets to do the work had we been using the old-fashioned notebook. And while we delegate our menial and repetitive jobs to the machines, and dedicate ourselves to only do the creative work, the concepts of productivity and performance need to be reevaluated and redesigned, especially performance management that has to be renewed to measure creative work and creativity.

Beyond count and compare

But creative work cannot be measured in numbers – this is a qualitative aspect not quantitative. To design performance metrics for creative work can be a huge challenge as millions of managers across the world, who still face difficulty evaluating the performance of remote workers, have to be taught how to evaluate what can’t be counted.It is easy to measure outcomes when they are concrete. The number of widgets produced by one worker can be compared against norms to determine how much they need to be paid. It is easy to compare one sales person’s outcomes to another. You simply need to count and compare. Most managers still manage performance by counting and comparing.We still use Performance Management systems that do not address the intangible elements like trust, teamwork and collaboration. Performance management systems have not evolved beyond count and compare.

Performance management is a human process

Guidance is a pre-requisite to reaching a goal. A manager has to play the role of a coach and a skill-builder rather than be just a weighing scale, figuratively speaking. Work is getting increasingly complex that needs multiple viewpoints and collaboration beyond silos. It is time to measure the intangible elements underlying performance.Count and compare is at loggerheads with workplace behaviors like collaboration and creativity. Managers often focus on tangible measures to appear objective. Employees care about “fairness” and equity. Weak managers often keep noise levels low by distributing rewards equally.If all that matters is the results, then a machine could keep score. Why do you need a manager to evaluate performance? The role of the manager is to not just measure and judge output; it is to build skills that will help the employee to do the current role better, prepare for more complex roles in future, and be a better organizational citizen.

Intangibles matter

Intangibles can be measured through the value they create or erode. Take two areas where intangibles matter:

Reputation of the organization

The modern enterprise is built on intangible measures like reputation, behaviors at work etc. Google had to let go Andy Rubin, the “Father of Android” because of inappropriate behavior. When the terms of severance became public, it led to 20,000 Google employees walking out in protest and leading Google to kill its policy of forced arbitration.

From Input to Value Creation or Erosion

Elon Musk creates value with his ideas and erodes it with a single tweet. Even today, training departments are measured on archaic and meaningless measures like number of training days or the number of employees “covered” even for soft skills like collaboration and creativity. A student from an art college can reproduce a painting by a master. The role of the manager is to turn that employee into an original artist who goes beyond replication.

Learn from the “Mad Men”

Advertising agencies are judged on two parameters. The clients evaluate them on the impact they had on the additional sales and trust in the brand. The peers compete on the number of awards won. The industry judges the agency on the thought leadership and breakthrough thinking. The senior leaders are judged on the number of awards the team members have won under their leadership.If work is going to be all about creative output, maybe it is time for performance management to be designed along with people who have figured out how to evaluate and nurture creativity – the mad men.

====From my April 2019 column for People Matters. <read the column> 

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