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Press Release Senior managers urged to look at more sophisticated measures for performance 18th Septmember 2009 1-5 The Stud Offices, Redenham Park, Redenham, Andover, SP11 9AQ
Most measurements for performance are limited and encourage potentially dysfunctional behaviour and senior managers should think more laterally about the types of data they use. Speaking at a meeting of the HR Society, the Dean of London Business School Sir Andrew Likierman urged business to move to more sophisticated measurements. “Current measurements are often linear and numbers-based,” said Sir Andrew. “As a result they are often misleading, both in what they actually tell you about performance and also how they may drive behaviour. In some cases, performance is skewed to what is measured – sometimes with unwelcome and unexpected consequences.” For example, a fast food outlet may view see success in terms of the number of franchises it has nationwide. While a high number of franchises might prove success from one perspective, many franchises in a small geographical area will do little for the owners who are fighting over customers. So relying only on numerical information, and in particular one number, can be problematic. “There is no one established formula or framework, and frankly, simply working harder to get one is wasted effort,” said Sir Andrew. “What we need is an approach which uses a judicious mixture of quantitative AND qualitative measures, of numbers and words. The mix of these numerical and non-numerical measures will depend on the organisational context. “Take the measurement of a talent management programme in the public sector, where its success is measured in the number of people you bring into the organisation. Attracting the best people from the private sector with restrictions in salary might be very hard indeed in a normal economic climate – but it’s a lot easier in a recession, where the public sector is seen as a safer option. The increase in numbers doesn’t say anything about how good your programme is.” “In HR, I think people understand how to calculate the financial cost of people – but have much more difficulty in calculating their worth in the same terms,” Sir Andrew added. “So my approach suggests less concrete measures, more indications. As a result, senior managements need to be able to cope with less solidity in performance measures, more sophistication and complexity – and HR needs to learn how to communicate these without getting bogged down in the detail.”
Commenting on the presentation, Andrew Mayo, President of the HR Society said:
The HR Society is a UK network for practitioners and thinkers in the professional application of value added and business related HR, in all types of organisation.
For further information, please contact: HR Society: Sir Andrew Likierman |