How to Measure Performance Effectively: The Merits of an Outcomes-Based Approach

How to measure performance at work

How to Measure Performance Effectively: The Merits of an Outcomes-Based Approach

In a recent letter posted to this blog, Radcom President Angie Dianetti observed that, “Performance improvement has never been more important, and stakes have scarcely been higher for achieving it.” 

Pandemic-related business pressures have left many leaders with dwindling resources available to them, yet their need to maintain output and service levels remains undiminished. To make the difficult decisions necessary to keep their businesses afloat, they may suddenly wish they had a better understanding of performance levels within their teams. 

Even leaders who have thus far avoided implementing layoffs, furloughs, or pay cuts still need to understand how their staff is performing to ensure they can remain competitive in a “new normal.” Teams working remotely or in staggered shifts back at the office makes it more challenging than ever for managers to understand how well their direct reports are carrying out their jobs.

Measuring performance and finding ways to improve or even maintain it is indeed more important than ever. Yet many organizations often lack an effective, established means of measuring performance and look at the wrong metrics when attempting to do so.

Organizations often focus on employee behaviors when measuring performance. In this model, employees are assessed based on what they do and how well that aligns with desired behaviors of people in their roles. This makes sense when thinking about measuring the effectiveness of training—assessing how well a learner can “show what they know” by exhibiting behaviors that prove they understood key concepts they learned—but it does not account for what truly creates value for a business. 

The best measure of employee performance is not behaviors, but quality of work outputs.

In the words of Dr. Thomas Gilbert, often known as the founder of the field of “Human Performance Technology,” “Human competence is a function of worthy performance, which is a ratio of valuable accomplishments to costly behavior.” It is these “valuable accomplishments” that should be measured when assessing “valuable performance” within an organization. 

Numerous people within an organization could have the same responsibilities and exhibit similar behaviors, but produce work outputs of far different qualities. One may provide far more value to the business than another, but how do you shift to an outcomes-based performance management model that measures this value effectively?

Creating a Work Output-Based Performance Model 

As widespread of a problem as ineffective performance measurement may be, the solution is not overly complicated. There are a few basic steps to follow:

  1. Start by identifying valuable work outputs per role. Work outputs are visible to managers and leaders even if the workers themselves are remote. Determine what valuable outputs are produced by someone in a specified role and clearly document what they are.
  2. Develop standards for high-quality work outputs. You need a definition of what “good” looks like before you can hold someone to it, so be sure to agree upon and document quality standards by which work outputs should be measured. 
  3. Determine the behaviors necessary to create these outputs. This is where behaviors come in. Find out what it takes to do a “kick-ass job” when creating a given work output and also document that. Make it as easy as possible for someone to replicate that success.
  4. Create job descriptions based on everything documented so far. You have done all the work necessary to define a high-value output and what it takes for someone within a specific role to create one, so take this opportunity to make that part of job descriptions used to hold current employees accountable and hire/onboard future workers. 
  5. Focus on improving performance. Once you have worked through the steps above, focus on how you can improve performance (i.e., improve the quality of high-value work outputs). This may mean investing in training programs or developing new processes for expectation-setting, accountability, or coaching.

Make Performance Improvement Sustainable with Smart Measurement

Making the shift from measuring “what people do” to “what people produce” is the first step towards creating sustainable performance improvement processes in your business. Even after things get “back to normal” to an extent within our workplaces, you will find that measuring performance based on work outputs is not only more useful, but easier than measuring behaviors.

Need help getting started? You have a couple of options.

  • Do your own analysis of your business, working through the steps above to create a better path to performance in your business by becoming more focused on outcomes.
  • Work with specialists trained to identify valuable work outputs and establish the desired behaviors and criteria needed to achieve them, so you can sustain performance improvement.
  • Have performance improvement specialists conduct a thorough performance analysis within your business, identifying opportunities for performance improvement and developing a plan.

If you do decide you could use a hand, give us a call. We’d be happy to talk to you about what a performance improvement plan could look like and how it could deliver value for your organization.