Have you ever wondered why one contractor performs better than another? The tendency is to look at the differences as a matter of personnel, equipment, or just better luck with the weather. In fact, when two companies are facing the same uncontrollable variables, the company that performs best is the one that has developed a performance culture. I work with clients to focus on controlling the variables they can control and mitigating the impact of those they cannot. The goal is to create a company culture based on organizational accountability. The primary differentiator between the mediocre contractor and the top performer is a company's ability to execute its plans by creating key performance measures and holding people accountable to achieve those goals.
One key to developing a performance-oriented organization is matching the results expected from people with their competencies. To increase productive capacity, you must add to both sides of the equation. For instance, if you expect your field supervisors to implement a short-interval planning process, but you haven't provided the instruction necessary for them to learn the importance of that process in achieving company goals, then the initiative will soon lose momentum. When they understand how short interval planning minimizes delays and improves overall profitability, they are more likely to stick with the process over the long term.
As skills develop, people should be held accountable for delivering expected results. This begins with clearly understanding roles and responsibilities. Although writing formal job descriptions may seem daunting, it is impossible to hold individuals accountable for results if expectations aren't clearly defined. Specific responsibilities for decision making must be articulated. This is important both to rein in individuals with a tendency to overstep their authority and to empower employees to be responsible for achieving their goals. Once responsibilities and goals are established, specific performance criteria should be determined.
Measuring performance can be tricky. It is important that measurements not be used as a weapon to punish employees. People naturally distrust being measured when they do not understand why their actions are being tracked. However, when they are in on the game, so to speak, people want to get good marks. “What gets measured gets done” is the saying we often use, and for many years researchers have noticed that productivity improves as soon as employees know they are being measured. Because of this, it is important to determine what you need to measure to ensure that results match your company goals. Any measurement program should provide positive outcomes for the employee, the company, and your clients, and it is important that participants are aware of the results.
I recommend two primary methods for providing feedback to employees on their performance against pre-established criteria. The first is periodic (quarterly, semi-annual, or annual) performance appraisals. Base the performance appraisal on the individual's job description and performance against the measures set for that individual's achievement. Take time to reinforce how individual achievements fit with team and company goals. A positive appraisal will drive continuous improvement.
The second means of giving feedback is through simple charts and graphs that show company, departmental, or project performance relative to stated goals. Graphic representation of Key Performance Indicators (KPIs) is a great way to motivate people to improve. Some KPIs that can be charted are productivity gain/loss and schedule variance. Feedback should also be provided on less easily quantifiable goals, such as customer satisfaction and quality.
The final requirement for creating a high-performance culture is to ensure that incentives and motivators align with company objectives. Not only should you review employee compensation to make sure that rewards are in line with expected behavior and performance, you should also consider who will attend outside training, who should attend management meetings, who will be promoted, and a host of other non-monetary motivators.
Creating organizational accountability to achieve higher performance begins at the executive level. But, it doesn't stop there. It is not enough to have high expectations and then demand that the company deliver, or to develop a plan to achieve those performance expectations without putting a process in place to develop competencies, define expectations, measure results, provide feedback, and motivate performance.
—Brian Moore is a senior consultant with FMI. He can be reached at 919-785-9269 or by e-mail at firstname.lastname@example.org.