Set Standards of Performance

ONCE YOU have determined your key result areas, the next step is to set standards of performance for each one. As Yogi Berra said, “You can't hit a target that you can't see.”

For you to perform at your best as a manager, you must set standards of performance, and even standards of excellent performance for each job and for each function in your area of responsibility. People need to know exactly what you expect and to what level of quality.

These standards need to be specific, measurable, and time-bounded. Remember, “What gets measured gets done.”

When you ask other people to do a job, you must also tell them your desired schedule of completion and how, exactly, you are going to measure whether that job has been done properly.

Perhaps the greatest leap forward in business in recent years is the concept of “measurement-based management.” This is where you assign specific numbers, benchmarks, and standards to every area of activity in your company, right down to how many times the phone will ring before it is answered.

The Hawthorne Effect

There is a principle in psychology called the Hawthorne effect, which comes from the pioneering work on labor productivity conducted at the Western Electric Hawthorne Works in 1928. What they found was that when people are clear about a particular number or target, they continually compare themselves against that number and both consciously and unconsciously improve their performance in that area. This process of continuous improvement starts with you and your employees being clear about the number in the first place.

The achievement of standards of performance must be the only basis for rewards in an organization. Rewards in a top company go to performance, excellence, increased sales, and measurable achievement. Rewards must be based on performance and results alone.

In his wonderful book The Greatest Management Principle in the World, Michael LeBoeuf says, “What gets rewarded gets done.” The key question you have to ask yourself continually in your work is, “What is getting rewarded?”

Are you rewarding the performance you desire or require? Whenever you see an organization or a department that is performing below standard, you will almost always find that the wrong things are being rewarded.

Perverse Incentives

In one company I worked for, the telemarketers received a reward or a bonus for each potential customer that they could talk into attending a live sales presentation of the company's services. This system ensured that several hundred people would come to a large presentation each month. However, the number of those potential customers who actually bought the company's services was quite low. The managers discovered that they were rewarding the wrong things.

They then changed their compensation system to a base salary plus a commission on the sales made to the people who were invited to the presentation. The telemarketers, responding to the new incentive, became much more careful about inviting only qualified prospects who could become immediate customers. The company's business doubled and then doubled again within the next few months.

Inspect What You Expect

Once you have set performance standards, you must inspect what you expect. When you assign a task and set a standard of performance, also arrange to check back with the employee regularly, to be sure that the job is being done on schedule and to the previously agreed-to standard.

Employees value the importance of their work much more when they know that the boss cares enough to set standards and then check with them to make sure that the standards are being met. The reverse of this regular inspection is when the boss assigns a job and then turns to other things, leaving employees alone to perform without measurement or feedback.

Delegation is not abdication. Even though you have assigned a job to another person, you are still responsible for its successful completion. When you inspect what you expect, only then will people believe that you consider the job important enough for them to strive to meet the standards that you have mutually set.

Clarity Is Essential

In business and in life, clarity is one of the most important words associated with success. Thousands of employees have been surveyed and asked about the characteristics of the best bosses they have ever had. They universally agree on this point: “I always knew what my boss expected me to do.”

The reason you must be clear about key result areas and standards of performance is that, without them, neither you nor your employees can perform at high levels. If you cannot perform the job in an excellent fashion, you cannot earn recognition and promotion. You cannot perform with distinction. As a manager, the people under you cannot do their very best unless they know exactly what that is and how it will be measured.

The kindest thing you can do for your staff members is to help them to be absolutely clear about what it is you need them to do and to what standard of performance. When people are clear about the target they are aiming at, they will often amaze you with the quality and quantity of their production and output.