Performance management that builds culture and systematics for employee improvement through several small steps, could create extraordinary results.

KNOWLEDGE @BI: Performance Management

Performance management is in. It has a long history in management literature, with roots in an accounting and control perspective which casts long shadows. Key terms are ambitious goals and clear performance goals, as a basis for reward systems where the best are promoted.

However, research has shown the potential for major challenges in identifying precise key indicators for what is being measured, called Key Performance Indicators (KPIs). It is also costly to introduce, follow up and conduct the necessary adjustments of such measurement systems.

Potential for extraordinary results

Performance management easily becomes a question of administering a system for measurement and reward. The term performance management could, however, entail something more, a philosophy that emphasises the potential for development, exceeding goals and extraordinary results.

Such a perspective is most clearly demonstrated in professional sports. Can captains of industry learn from professional athletes? Or are professional sports too unique in such a context?

The answer depends on what aspects of professional sports are emphasised, though much indicates that businesses could benefit from adopting a few main insights from professional sports.

The concern of businesses and the public sector with key performance indicators and end results is often not balanced by a corresponding focus and systematics related to following up the processes that create the results.

Influence the behaviour behind performance

It is no given that more precise result targets and graded reward systems would create development. Usain Bolt’s 100-metre results are measured in hundredths, but exact performance measurement is not what cultivates result improvement.

However, in professional sports it is clear that performance management is about influencing the behaviour behind the performance.

Capacity for extraordinary results is built through targeted and systematic development work. We can’t all be world champions, but quite a lot of us have the potential for and interest in development.

In order to succeed, development work must be subject to continuous evaluation – where expectations are tested – and adjusted along the way if necessary. This requires precise key performance indicators (KPIs) related to development, but they must be anchored in an understanding of the concrete processes you are working on.

There must a connection between performance measures for the organisation and each individual employee’s training and development goals. This requires management involvement, and a sound understanding of the key elements in processes that lead to extraordinary performance.

Better chance of success

Analysis of value-creating processes is naturally of key importance in the private sector. In Norwegian professional sports, this is often called factorisation. Complicated processes are divided into sub-processes in a manner which results in increased focus and prioritised follow-up of development work.

An urban myth says that the violinist Arve Tellefsen watched Nils Arne Eggen train the Rosenborg players in corner-kicks. One of the players repeatedly kicked the ball towards another who would head the ball into the goal. But the first player kicking the ball often missed the second player and the second player missed the goal. Tellefsen noted that they were not practicing, but playing.

As for himself, Tellefsen differentiated between practicing difficult passages and positions in a piece, and the actual presentation of musical pieces, which was the performance. So, the training should be that the corner kicker practices hitting a point – which should be the second player in the game. And the second player must practice heading at the correct height and direction. And so forth. The whole is broken down into components that – when mastered – increase the chance of success. It might sound logical, but this type of development method is unfortunately not used much in businesses.

Motivated employees

The normal argument against any transfer value between athletics and businesses is that employees are not sufficiently motivated, and that businesses – unlike athletes – compete all the time and therefore do not have time to train. The motivation of a normal employee is undoubtedly very different from Norwegian champion skier Petter Northug, for example.

Recent research from working life shows that normal employees can often be motivated for development when this is facilitated. The fact that managers and employees do not have time for training, however, must rest on a misunderstanding of the correlation between training and competition in both sports and businesses.

In professional sports, training needs the same concentration as competition. In the same way, training in businesses should not be a distraction from the daily work, but provide increased focus and concentration on prioritised components that increase the capacity for result improvement.

Performance management that builds culture and systematics for the improvement of many people through several small steps could create extraordinary result improvements.

References:

  • Andersen, S.S. (2012) “Olympiatoppen  in the Norwegian sport cluster”, in Andersen, S.S. and Ronglan, L.T. (ed.) Nordic elite sport. Same ambitions, different tracks. Oslo: Universitetsforlaget.
  • Andersen, S.S. and Sæther, Ø. (2008) “How to achieve extraordinary results with all employees: mobilizing competence for performance”. HRM performance. Personalführung 11/2008.
  • Sonnentag, S. and Frese, M. (2002) “Performance concepts and performance theory”, in Sonnentag, S. (ed.) Psychological management and individual performance. London: John Wiley and Son.

A Norwegian version of this article is published in BI Leadership Magazine 2013/14.

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