vrijdag 29 januari 2010

Performance management

Performance management seems to be the new buzzword in the field of business intelligence. Performance management is about measuring your business processes (% of wasted materials, revenue, etc), comparing the outcome of the business processes with your desired results (10 % wasted materials, 100 K revenue) and trying to adjust the business processes with performance measures (more efficient use of materials, sales promotions).

The above example sounds very analytical or like a system approach as thermostat works: temperature-sensitive automatic device that regulates and keeps the temperature within determined limits; If limits are exceeded it will adjust the temperature. As i said this is very system driven and this could be adapted in the years of industrialization but now organizations are more organic, needs more flexible and creative. Does plain performance management really motivate people? As Frank Buytendijk states in his book Performance leadership organisations could recieve undesired results by just adopting performance management without thinking what effect it could have on human behaviour. He distinguish two basic types of unintended behaviour:
  • People impacting on measurement. People are trying to play the numbers so that they don't have to alter their actions.
  • Measurement impacting on people. The metrics put in place drive dysfunctional behaviour. This is what i call "the system drives the people" and is defined by Frank Buytendijck as 'Measure fixation'. The numbers will become more important than running a successfull business.
So what is a proper performance management system influencing the right behaviour? That will be input for a  blog for later.

Greetz,

Hennie

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