Once, a fast-food restaurant manager was in hot pursuit of a perfect 100% on his company’s “chicken efficiency” metric, which measured the ratio of chicken sold vs. chicken thrown out. To get it right, the manager just waited until the chicken was ordered before he cooked it. While he did win the metric’s award, the long wait time his approach incurred put the restaurant out of business.
You don’t have to be in the fast-food industry to notice how misguided the company’s metric was if the real goal was improving the bottom line.
When done poorly, performance measurement can be, as the American Management Association says, “dysfunctional.”
A performance measurement system that enables powerful insights for business leaders is one of the best tools for organizations in harnessing organizational data and predicting – and driving toward – better outcomes.
While it might be amusing to think about all the misguided steps poor performance measurement systems can inspire, we’d rather dig into the best ways to develop and refine powerful, insightful performance management systems that help focus and incentivize employees to improve their organizations.
What is a performance measurement system?
A performance measurement system establishes and monitors pre-established key performance indicators (KPIs) to help business leaders inspire good behaviors and practices and course-correct as needed. Essentially, this system ensures everyone is doing the right thing, doing that thing right, and doing it at the right time. Quality, cost, and time are typically cornerstones to performance measurement systems that help improve organizational performance.
But just looking at numbers on a report generally doesn’t do much for driving a business. Instead, performance management systems need to incorporate predictive analytics to guide what the next steps should be.
Transforming Performance Measurement with Artificial Intelligence
We probably don’t need to tell you that performance measurement systems today certainly shouldn’t be managed in a cumbersome series of Excel tabs. Your organization should leverage performance management software – or develop your own – that enables real-time access to key performance measurement data.
In addition, with the right software development services, your organization could also implement AI to monitor performance in real-time, and give in-the-moment feedback. This might mean the difference between spotting a training gap in a new employee and promptly getting him in the right class right away or having to let that high potential candidate go later on for performance issues.
Artificial intelligence can also eliminate human bias toward past performance, previous experience or general likability and simply look at the facts.
Building a powerful performance measurement system
To avoid going the way of the chicken restaurant, it’s important for businesses to thoughtfully implement performance measurement systems that provide useful and accurate insights. Some key questions to consider include:
- Can the system integrate information from across the organization? The ability to pull data from all its locations and integrate should be both possible and straightforward.
- Is the system portable? The days of plugging in at a desktop are long gone for most businesses – and a performance measurement system should reflect that. Give mangers real control by ensuring the software is compatible with phones and Tablets, and accessible anywhere.
- Is the system reliable? Whether you’re developing a proprietary software from scratch or leveraging an enterprise solution, understanding the support model – including the people’s support – is critical to ensuring business leaders won’t lose access to performance measurement due to faulty software issues or a lack of IT support later on.
And finally, the most important question to ask is: will this performance measurement system enable business leaders to manage performance in a way that is easier and, ultimately, more profitable for the business?
Is your business ready to take control of performance measurement and enable better performance management? TechGenies is ready to provide our expertise, whether your organization is looking to implement an existing software or build one from the ground up. Along the way, our Genies will be just as invested in getting it right, because we’re only as successful as you are. And, you’ll tell us when you’re finished with your team of Genies because we’ll stay to support your business as long as you need us. Don’t leave your performance management in a disparate system – contact us today at email@example.com to get started.