Wednesday, May 27, 2015

Digital Master Tuning #92: Is it Possible to Evaluate Performance based purely on Objective Data?

The more meaningful and important the thing you want to assess, the harder it is to measure objectively.

You measure things for a PURPOSE. That purpose drives your metrics. You can measure anything, but often not directly, but about measuring INDICATORS, that may or may not be relevant to why you are measuring. KPIs are indicators, not the performance itself. From talent management perspective, Performance Management assessment is always subjective, controversial and contentious. Is there a way to take out subjectivity out of performance evaluation? What if you could translate every function into the universal language (mathematics) and have computers do the employee analysis? Is it possible that performance evaluation are based purely on objective data?

It is very hard to measure IMPORTANT THINGS, such as Performance objectively and meaningfully. The more meaningful and important the thing you want to assess, the harder it is to measure objectively. That's why you measure KPIs because you can't measure the important stuff. Overall performance includes soft skills that cannot be measured strictly by metrics; did you contribute to the team and how? did you demonstrate leadership skills? how? Did you offer creative and innovative input and solutions? how? However, you aren't evaluating machines and it isn't all about output. The idea is to measure so you can determine the VALUE that each employee adds to the company, because that's the ultimate goal, for each employee to contribute to the RESULTS the company is trying to create. Unfortunately, you can't separate the value of one employee from another because each one is simply one part of the employee value chain. Very sophisticated multiple regressions can be used to TRY, but the cost would be enormous for any company to do this. It would get closer to determining value, but not close enough.

Performance assessment has a human component, which cannot be eliminated by any metric. Furthermore, in modern socially responsible companies, it isn't just about WHAT you have achieved, but also about HOW you have achieved it. The HOW aspect in CSR is unavoidably subjective because it stems from perceptions. It doesn't mean that these aspects should be disregarded because they are not objective, but it does mean that good guidance needs to be formulated and deployed on consistently measuring and interpreting these "softer" aspects. Performance management must be such that it encourages and drives stretched goals or KPIs; encourages people to take initiatives, drive innovations and compete in professional way. It must question your achieved and mastered terrain and makes one try new things. This will be the sign of a growing and developing organization where each individual in an organization goes beyond the tangible and quantified goals on assignments.

The issue of Performance Management measurement isn't about accuracy, but of validity and reliability - does this measure what you want to measure, and if you measure repeated times, all things being equal, would you get similar results? If your work involves a standardized process where you have to follow a procedure to get to a desired outcome (like following a recipe) then performance is highly measurable. If the work demands problem solving, creativity, etc, where there is more than one road to an outcome, measurement is always problematic. Evaluators are by default biased and usually unaware of this. Performance feedback, unless it is the objective outcome of an almost mathematical process increases stress and decreases motivation and performance. The performance evaluations should be a combination of both an objective and a subjective measurement. When the subjective measurement is included, it becomes a chance for the manager and the employee to start a two-way communication. The manager should take this opportunity to coach, mentor his/her employee, address areas of concern, areas that need improvement and praise areas where the employee is meeting or exceeding goals. The two-way communication will also provide the employee an opportunity to discuss challenges and their desired career path. These are all factors that provide the foundation for goals to be set, motivation and attachment to goals to be formed by the employee.

Setting Key Performance Indicators (KPI) for performance measurement which are measurable and robust takes a lot of effort and needs the cooperation from various departments in the organization. Data based talent analytics is absolutely becoming more important for improving people management and performance management maturity. However, performance evaluation only works when it is part of an overall performance management system where the goal is for both supervisor and subordinate to continually provide each other with open honest feedback, not just measuring quantity, but evaluating quality to harness leadership, improve business culture and encourage innovation. It includes WHY do you do what you do, HOW you do it and WHAT you've accomplished for encouraging purpose discovering, autonomy and mastering.

Digitalization is like a flywheel, and Digital Masters are the one riding above it. Surf more Information about Digital Master:


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