Category: Key Performance Indicators

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Key Performance Indicators Performance Management

5 COVID Lessons on Performance Management

As we start to return to the office and begin to feel a sense of normality in our working days, it’s worth pausing and reflecting on the past nine months and what’s changed.

It has felt like a whirlwind. Many businesses have had to pause larger projects and high-level strategic activities in favour of just getting through the next week or month to keep up to changes in market and customer demands.

What we know is that employees are still feeling uncertain and we’re concerned about how to retain them. If your business has managed to grow during the pandemic, you’re also probably thinking about attracting and hiring staff.

Working with both hiring managers and those seeking work, we’ve been able to see both sides of the coin and have summarised five lessons for business owners to reflect on over the seasonal break and into the new year to take advantage of what has been the year 2020.


team-members-employee-performance-inject-blog

 

1. Honesty is the best policy

What happens when you feel uncertain about something? Does your mind automatically go to the worst-case scenario? 

This is your brain trying to keep you safe, but it often doesn’t help in the moment and can lead to making poor or irrational decisions. 

It’s the same with employees. They’ve endured this huge period of uncertainty and are still feeling the negative effects of not knowing what was going to happen to them or their job. One way to minimise this feeling for them is to be upfront about how the business is performing (as much as is appropriate) and where you see their role in the months to come. Most likely, the reality is not going to be as bad as what is currently running through their minds.

Task: Schedule a meeting with your team members in early December to discuss the business’ journey through COVID and where to from here. Whether it’s virtual or you’re able to meet face to face, people like it when there is certainty and this allows you to tie up 2020, without anybody spending their festive break wondering what’s going to happen in 2021.

2. Flexibility isn’t always the answer

As we’ve mentioned, most employees don’t thrive on instability and the unknown. Many businesses have used this time to ensure their employees have flexible working hours, assuming this is what they desire in a workplace. 

“Work whenever you like, just get the results.” 

Whilst this can work for some roles and individuals, it’s not the case for the majority. Whilst there is a level of flexibility that is appreciated, what employees really crave is a sense of autonomy. 

Instead of telling them to work whenever they like, and then getting frustrated that they aren’t returning your calls at 12pm because they’re out for lunch, picking the kids up or getting some household chores completed, ask what hours suit their needs and let them know what you were thinking as well. 

This way, you’re on the same page and the employees feel as though they’ve had input into their working week, without feeling like they have to be constantly online. Putting these times in shared calendars can also help.

3. Avoid the need to be on video, 24/7

Whilst it can be easy to feel the need to replicate the office environment by scheduling all meetings virtually face to face, a study from the National Geographic found that ‘virtual interactions can be extremely hard on the brain’ due to the continuous partial attention of having to focus on many people at once, with limited body language and verbal cues to read. 

The term ‘self-correcting’ has also been used in relation to ‘Zoom fatigue’ because, in the physical face to face meetings, we’re not looking into a mirror and distracted by our own faces. This can cause employees to disengage and feel exhausted from a meeting, and end up contributing less, affecting good performance.

Task: Before scheduling another virtual meeting, ask yourself if it could be sorted with a phone call instead. This way, both managers and employees only have to focus on voice, and can use the time to get up and step away from the desk too.

 

performance-management-for-small-business-inject-blog

4. Routine and structure aren’t tedious, they’re energising

What normally happens when you go on holiday? Routine and structure fly out the window, right? It’s nice to not know where you’ll be going for dinner tonight, whether to hike that mountain or sleep in or what book to read on the plane (or car, COVID safe). 

For a time.

All of this is also in a positive context, and knowing your job will be waiting for you when you get home. 

What also usually happens when you get home from holidays is you’re relieved to get back to the familiar comforts and routine of life. This is because a large chunk of your brain has returned to autopilot and you’re able to use that energy again more efficiently. 

Put this in the context of COVID. Having to shift your workspace into your home space virtually overnight, plus the uncertainty of not knowing if your job will stay the same or you’ll lose it… some certainty and routine is starting to look pretty good right?

Helping your employees to be aware of this, and how they’re feeling, will help you both feel more positive about implementing a new routine or habits to allow everyone to be more productive and feel more positive about this unfamiliar situation.

Task: Schedule time in you and your team’s calendar for weekly meetings on operational matters to keep everyone informed of what’s going on. Then, scheduling monthly 1 on 1s with your employees will allow you to have more in-depth conversations and could potentially help them feel a little more at ease too.

5. Celebrate the wins

As the one in charge of business growth, it’s hard not to focus on the next challenge, the next mountain to climb or the next new customer. When setting goals and key milestones, it’s worth putting aside some time to reflect and celebrate how far you’ve come. 

This year, positivity and good feelings have been hard to come by both at work and at home. Without delving too deep into the performance indicators, give your team a boost by recognising some of the small stuff and you’ll likely see the benefits play out afterwards. 

Research from Berkley suggests that when workplaces practice gratitude, it helps to create an environment where employees feel appreciated and not just a cog in a machine. In a study by Gallup, engagement rates for employees whose managers focus on their strengths are more than double that of employees whose managers focus on their weaknesses.

This can’t be a one-off though. Like in the previous lesson, practice consistency over intensity. Something we’ve been doing as a team is taking time in our Friday afternoon catch ups to share one Win, a Learning and one thing we’re grateful for from the week. It doesn’t have to be work-related, and it’s a nice way to recognise your team for the effort and work they’ve put in. 

Did you enjoy this blog? 

If you are a small business transitioning from WFH to on-site, it’s worth slowing down and considering the emotional and physical health of your employees, and how that may affect your business. At Inject, we understand how a work dynamic can drastically change, and consequently affect the performance of the business, and the health of managers and employees. 

If you’re interested to learn more about Inject’s approach and management, or how we can help your business, feel free to connect with me on LinkedIn, or contact us here.


goal-setting-performance-management-for-small-business-inject-blog

Categories
Business Strategy Human Resources Key Performance Indicators

5 Important Recruiting Tips for Small Businesses

What is the best way to recruit employees?

From our time working with business owners and leaders, we’ve found they all have a few things in common. One is that they are incredibly time-poor. Two is that they spend a lot of that valuable time on areas that aren’t their high-value activities. 

They spend time on operational tasks like accounts payable, administration or reporting because they want to make sure that their business is moving in the right direction. It’s like a train driver leaving the wheel to check if the ticketing officer is charging passengers properly.

Some of the time it’s because managers are worried about things getting done correctly and don’t have strong processes in place to scale accurately. Other times it’s plainly because they haven’t hired the right people, into the right roles and they feel compelled to keep a close eye on their employees to avoid the train running off the track.

As you can probably tell, the impact that a poor recruit can have on small businesses, that already manage tight resources and marginal room for error, is massive. A poor performer can cost you money from your top line and then cost you precious time and energy managing them out of the business, not to mention the effort of re-hiring. 

We see easily avoidable mistakes made every day so we’ve put together our five tips for small business owners to help them get their recruiting right, so they can focus on steering the business to the next station.

1. Hire for attitude over experience. 

Employees with the right attitude, aptitude and behaviours will trump industry experience. 

We’ve put this tip first because we’ve found it to be a failsafe method of hiring the right people long term. Unless it’s a role where detailed knowledge is key to success e.g. a surgeon or lawyer or a crucial leadership position where experience managing people is a factor e.g. a sales manager or CFO, then everything else can be taught. 

If someone has the motivation, cognitive ability and drive…systems, products and procedures can be taught.

Don’t miss out on someone with a positive mindset, who’s switched on and is looking to invest their time and career in your business because there was someone who worked in the same field, brand or product.

We’re sure you’ll agree that it’s more efficient to spend energy training and coaching people motivated to learn on the right procedures and product, than trying to re-train people who know the product or process but don’t agree with the business’ selling style or target market because ‘that’s not how we did it in my last company’.

Getting rid of bad habits will cost you more time, money and resources in the long term, than training the right ones.

2. Read the person, not the resume

A candidate’s application gives you many clues into their disposition and behaviours that aren’t just about their career history. 

This is their first impression for you. Have they ensured they’ve taken the opportunity to make it a positive one?

For example, have they demonstrated they’ve read the advertisement thoroughly and addressed your selection criteria? This shows they’re conscientious and communicate with their audience in mind.

If you’ve asked for a cover letter, have they included one? If they haven’t, they might not be too excited about the role or they have poor attention to detail. Do you want to employ someone with neither?

Have they included a career summary in their resume explaining their objective and path? Does their career path make sense? When someone job-hops from one role to another every 6 – 12 months, it doesn’t mean they’re not a good employee but it does beg the question why they haven’t stuck around…

Reading through their job titles and achievements, look at the language they use to describe what they do and what they’re proud of. You might understand a lot more about their personality and motivations than you’ve realised. 

3. Create an engaging Employee Value Proposition 

An Employee Value Proposition (EVP) is the sum of what a business can offer and provides to employees in return for joining, staying and doing their best for the company. The fight for great talent is only growing so small businesses need to be innovative and think hard about what they can offer candidates that larger corporates aren’t able to.

For example:

  • Career development within the company
  • 1:1 mentoring, training and development opportunities
  • A friendly, positive culture and flexible working environment

Writing advertisements that specifically communicate what your business can offer employees means you’ll attract people who are interested in and value what your company provides. 

Different offers attract different candidates. And vice versa, you spend less time on people who don’t value what you offer.

4. Use rigorous and objective assessment methods

So now you’ve sifted through a pile of applications and shortlisted candidates to interview. But how do you know you’re assessing the right things? 

Using multiple objective assessment tools confirms not just what you suspected, but also sheds light on areas for development. No-one is perfect, but it’s about finding out from the start what you can work with, and what you can’t. 

This goes back to hiring for attitude, not experience. You may assess a candidate and find out that their customer service skills are second to none, but they have trouble keeping track of their schedule. 

Is this something you can manage and support to ensure your customers are looked after? If yes, then great. If not, well at least you know now and not 6 months into their employment.

On the other hand, you may be hiring a salesperson and find out a candidate’s natural energies and behaviours mean they’re more likely to be less confident in business situations and not enjoy negotiating or persuading. It’s probably not going to be a long term role for them if that’s the case.
You can read more about psychometric testing in our blog here.

5. Use an RPO and leave it to the professionals

If you want to get back to focusing on the bigger picture and steering the train, something to consider is outsourcing your hiring to the experts by using a Recruitment Process Outsourcing consultant (RPO). 

RPOs function as your internal recruitment team. They know and understand your business, the industry and the kind of person that will fit your team and culture. They solely focus on finding and hiring employees for your role and company and have deep knowledge and understanding of the market, average salary and what will attract the right kind of person.

We know you’re busy. We understand you’ve probably hired poor performers in the past and don’t want to continue making that mistake. You don’t have time to review applications and the mental load of deciding who to interview isn’t something you need on your plate. 

The great news is that there are people out there who love helping small-medium businesses grow their team, and who understand the importance of getting every recruit right from administration to operations. Do your homework and find someone that wants to understand you and your business.

 

In summary, we understand that one of the most crucial areas to get right in a business is its people. This has become even more prevalent during COVID restrictions and the challenges that a global pandemic has presented; when you’ve really needed to trust and lean on your team to pull through. In times of crisis and times of growth, having the right people on board your train can be the difference between running off the rails or continuing the journey.

Categories
Key Performance Indicators Performance Management Small Business Recruitment

10 Ways Your Business Will Benefit from Position Descriptions

position-descriptions

When we say the words “Position Description”, for some it can conjure up positive feelings, such as clarity, accountability and alignment.  For others, it feels like bureaucracy, being boxed in and doing paperwork just for the sake of it.  There are those of us who like documentation, whilst others have an allergy to it. I am neither a documentation nor non-documentation person – I am a person who enjoys good business practices that add value.  

Let’s explore where the value in position descriptions lies and whether or not it is valuable for you.  There are 10 benefits that I have broken up into 4 categories.


Hiring the right talent

1. Position Description can give you a better chance of selecting the right person

Take the job titles of Business Development Manager, Customer Service Officer or Marketing Manager.  If you want to increase the chance of hiring the wrong person, be unclear about what the job is.  A clearly defined position description provides what someone needs to be great at, what they need to be good at and what is irrelevant. For those people who just hire people based on who they like, then this may not matter.  But for those looking to bring high performers into their business and are using valid assessments, defining the position is critical to those assessments working.

2. Position Descriptions can help you to attract the right person

What am I signing up for?  If it is not clear what the job is, the high performing candidates may opt out of your job offer.  This is because they are the type of person to carefully consider their decisions and it also shows that you haven’t put in enough effort to complete a PD.  If you can’t be bothered with that, what else will you not be bothered to do?


Operational Excellence

3. Position Descriptions can help to reduce double-handling or tasks slipping through the cracks

When two people have the same task in their position description, it can result in double handling or worse yet – group think.  Whether it’s no one’s job or everyone’s job, having clarity over whose job it is, helps to get over this hump of confusion.  Similarly, the assumption that a task sits with a person who doesn’t know it’s their job (or is in denial about it) can create a lot of noise around the task.  

4. Position Descriptions can assist with reducing excessive hand-offs

By completing a position description exercise that looks at a business holistically, you can identify the best way to organise tasks for the greatest efficiency.  There are often tasks that have evolved over time as the business has grown and in many cases the person completing it is only doing so because that’s what has always happened.  The impact is that they become a bottleneck for everyone else, resulting in poor customer experience. 


Performance and Development

5. Position Descriptions can help with people performing the position you actually want done

Most of us like doing certain things in our job and dislike other parts of it.  There are tasks that we may not even complete at all.  It’s only once we review what the position is meant to be and compare that to what is taking place right now, that we identify the gaps.  Alternatively, where we have a clear position description from the start, the conversation can focus more on what the High Value Activities are within that position that each employee should be focused on to best help the business.  Once we have developed the HVAs, then we can talk about how they can find their way into the calendar every week.

6. Position Descriptions can form the basis of competencies and development

What should be in the training plan of a new starter?  If a position description is clearly defined, it creates a roadmap for what you should be training people one.  You can then circle back to it to check in and see where they are at with their development.  The tasks should all be visible and accessible, which reduces the awkwardness of discussing competency in a role.  Similarly, for those aspiring to the next level, a position description can help provide clarity to a junior employee on the gaps they need to close.

7. When dealing with performance matters, Position Descriptions can be a reference point for what they are required to do.

One of the most common performance issues that exists across all organisations is this: the employee wants to do part of the role, but not all of the role.  Why?  Because they don’t like doing certain aspects of the role and they lack the motivation and/or competence to overcome this hurdle.  The position description can help with everyone being on the same page as to what the job is.


Risk and compliance

8. When looking at whether someone is physically able to perform the inherent requirements of the role, Position Descriptions help to define what this is.

Some businesses will have a process where they ask a new employee to provide information on any pre-existing injuries that would prevent them from performing the job.  This is usually the case in physically demanding positions, although the same can be done for any position.  The trouble is that their method for doing so is not robust, as they have not defined the inherent requirements for the position.  If I have a shoulder injury and you are clear that the inherent requirements of the position require lifting above my head, then it is harder to deny than if you don’t be explicit about it.

9. Position Descriptions are referred to in most employment agreements

This is an obvious practical part of offering a job to an employee.  Your employment agreement (contract) will refer to a position description.  If there is not one that exists or if it is inaccurate or vague, then it makes for a less robust agreement.  Also, whilst modern awards can sometimes be confusing at the best of times, if you haven’t got a position description to compare it to, then it makes it that much harder.  The impact of getting this wrong could result in being in breach of a modern award term or potentially underpayment.  These breaches can come with fines and stress that you don’t want to be getting.

10. When restructuring and having to justify why a position has changed (or not changed), the Position Description forms the basis for that justification

You can’t plan for restructuring or redundancies that are going to take place far into the future.  The point at which you realise you need to take this action is too late if you don’t already have a position description.  If you are making the argument that a role hasn’t changed substantially and therefore would not trigger redundancy or conversely if you are arguing it has changed sufficiently to trigger a person’s position being at risk, if there is no starting position your argument is more open to challenge.

Summary

Not all position descriptions are created equally and not all processes for developing position descriptions are created equally.  Don’t mistake your borrowed version from your friend as having anywhere near the same impact as doing it properly.  By investing in the right expertise, as well as your time and focus to get your position descriptions correct, you will save yourself headaches in the long run.  You can choose to wait until you have learned the lessons directly, or else invest the time and effort now knowing that the above is true, reaping the rewards for years to come.  It’s not about whether you love documents or not – it’s about good businesses practices that help you achieve what you want.

Categories
Business Strategy Key Performance Indicators Performance Management Small Business Recruitment

Why you need to use psychometric testing when recruiting

People are like icebergs. You know the old picture – the one where the mass of the iceberg is hidden from view from those looking at the iceberg from the surface.

Much like the mass of an iceberg, the ability, drives, and motivations of people are usually hidden deep below the surface. Psychometric assessments give us a look at what is underneath the surface level of a person – it gives insight into what drives them.

Why is this important? 

At the end of the day, the primary goal in the game of recruitment is prediction – that is, how certain are we that Joe Bloggs is suited to the role? Can they adapt to the demands of the organization? Do they have the framework to cope with the busy nature of the role? Can they manage a team? Can they perform under aset of time limits? Or, do they enjoy selling?

While a magic crystal ball would be the only thing thatcould give us 100% certainty, phone interviews, behavioural interviews – and yes, even reference checks – can give us some insight into the above questions. Though none quite get under the surface of who someone is more than psychometric assessments.  

 

Not all recruitment measures are created equal

We have probably heard of a questionable candidate who did not work out in their new role. I hear of this all the time. The first step is to sit back and ask how they got the job in the first place, we see red flag after a red flag in the interviews, but their years of experience and outstanding references got them ‘across the line’.

 

References and experience are the least valid measures.

We connect with references because they are other people who know the candidate – surely they know best, right? The reference, caught off guard and not wanting to talk ill of their old workmate, says they were outstanding (despite always being late and nevermeeting deadlines).

And the years of experience they have in the industry, surely, they know how to perform? Though this ignores the fact they may have been flying under the radar and underperforming for 5, 10 or 20 years!

Not all tools will have the same ability to predict how a person will perform – yet we often put more weight on less valid assessments like reference checks and experience.

In a 2016 article called “The Validity and Utility of Selection Methods in Personnel Psychology: Practical and Theoretical Implications of 100 Years of ResearchFindings” Schmidt found that general mental ability as measured through psychometric assessments is the largest predictor of job performance. 

In fact, many assessments have been put to the test – but which ones come out on top in terms of prediction? Below is an outline of just that.

 

 

  • Aptitude tests = .65 correlation (42% of variance)
  • Structured interviews = .58 correlation (33.6% variance)
  • References = .26 (6.7% of variance)
  • Job Experience = .13 (1.7% of variance)


The above picture puts some interesting perspective and challenges the norm; reference checks and experience make up a small part of the pie when predicting job performance. If I had a dollar for every time, I have seen the dreaded 5 years’ experience requirement, I would be rich. And if you’re a business owner, you’d likely be just as rich if you had a dollar for every time a recruiter approached you with a candidate with some impressive number of years in or had great references.

 

These are the least valid measures of performance, yet we often put the most weight on them. We have been focusing on the wrong thing for far too long.

Job experience can be important, however, in my experience far too much weight is placed on this. If you are spending time focusing on experience, rather than what psychometric tests measure (like ability and personality traits), you are leaving yourself open to uncertainty and perhaps worse; missing the opportunity to bring on someone who can change your business.

Most people make supposed informed recruiting decisions and have the nervous wait to see if they have or have not made the right decision. When they are used correctly, and of course, in combination with other steps like structured interviews, psychometric assessments are a useful tool that can cut through the BS and get you that little bit more closure and certainty on your next recruit.

Categories
Business Strategy Key Performance Indicators Small Business Recruitment

What Should Small Businesses Look For When Recruiting?


I’ve seen business owners approach hiring like someone approaching a buffet. It can be tempting to grab what you can in a hurry before anyone else gets there. 

Whilst it’s important to move quickly when you’ve found great talent, it’s also worth slowing down to think strategically about what the most important characteristics in a successful hire look like for your team.

Don’t fall into the trap of hiring someone quickly, to plug a hole and sacrifice talent. That’s like grabbing the bread rolls then missing out on the pork roast at the end of the table because you were hungry and didn’t want to wait.

Deep down, you already know that longer-term, hiring the wrong person costs time, money and resources you can’t afford to waste.

You might be thinking about which soft or technical skills will be successful in your role, which is a great start. Inject looks past characteristics like industry experience and detailed product knowledge, to the behaviours. We work on the premise that past behaviour is the most accurate predictor of future behaviour.


Don’t fall into the experience trap in recruitment

You hired someone with industry experience, glowing references and they said all the right things in the interview. Bulletproof, right?

Just months after their first day, other employees are complaining about the new recruitment – they’re making decisions without consulting others, causing friction with staff and not following company procedures.


How could this have happened when everything indicated they’d be a great hire?


Whilst it can be easy to believe that years of experience in your field will result in successful hiring results, you may have missed others, just as, if not more significant, indicators they weren’t the best fit for your business.


Questions you need to ask yourself in your next hiring process

There is no one right answer, however, depending on the particular role – senior, entry-level, graduate, sales, manager… to break it down, below are some questions to ask yourself through each stage of the recruitment process when hiring your next employee:


1. Resume

Seeing through the resume and being critical about the person who wrote it helps create a broader picture of why them and why this role.

  • If you asked them to include a cover letter, have they done so? Has this person addressed you or the company and specifically mentioned what appealed to them about the role?
  • Is the application free from spelling typos and errors? This can be a challenge to spot if you’re receiving resumes from an agency, as they can often be formatted.
  • If they don’t have industry experience, does their work history make sense for them to transfer into this role? E.g. similar tasks, similar job description, transferable skills. Does their career path make sense? 
  • Have they job hopped around? Have they gone into management then moved back down, or moved into sales and then back to admin? 


2. Interview

Being objective in your interview style allows the candidate to give you a more transparent view of their abilities, unclouded by their industry experience or how they spoke on the phone.

  • Are you giving candidates the best chance of demonstrating their abilities or are you asking them to give answers you want to hear? Asking open-ended questions rather than leading questions allows the interviewee to answer unbiasedly. 

E.g. “Tell me about a time when you had to complete multiple tasks at once.” Rather than “So, do you use a to-do list and schedule your calendar to ensure you keep track of your time?” The answer is more likely going to be accurate and honest, rather than ‘yes’ or ‘no’.

  • Are you using behavioural interviewing techniques? A quick Google search shows that there are multiple articles citing strong validity between behavioural interviewing and predicting job performance.
  • Did the candidate ask specific questions about the role and company, appearing genuinely interested and motivated?


3. Psychometric Testing

Are you utilising evidence-based assessment methods like psychometric testing? 

There are many different tests that assess a candidates’ natural strengths and behaviours, giving you a clearer picture of whether or not they’ll be a good fit for the role.


4. Reference Checks

Reference checks aren’t the most valid form of assessment, but we can use them to confirm what we’ve observed from the rest of the hiring process.

  • Is the referee a direct manager or a colleague? 
  • Did they pause or stumble at any questions you asked? Did you probe enough on areas you were unsure about?
  • Is the referee recent or from 10 years ago? Have they provided their personal email and phone numbers or their work contact details?
  • Have you cross-checked this reference on social media or their company website to confirm they are who they say they are?


5. The In-Between

What we mean by this is the time in between formal interviews and assessments. When the mask is off and the candidate is relaxed. You can find out a lot from when people believe they aren’t being assessed or measured. 

  • Has the candidate been fast with their response, flexible with their availability and clear with their communication over email and phone?
  • Do they seem genuinely interested in the role? Do they have a positive attitude?
  • Have you given them the opportunity to provide feedback about how they’re feeling about the role? 
  • Have they reacted negatively toward participating in certain assessments or parts of the process?


Transform your business with the right hire

If you are currently hiring, it’s worth slowing down and asking some of these questions. At Inject, we work with small-medium business owners and understand that hiring a poor performer can destroy entire teams’ productivity and morale.

We also know and have seen firsthand how a high performer can transform a business.

We don’t leave your hiring to chance because we focus on the attitude, aptitude and behaviour of candidates, so you know exactly what you’re getting. We work with you to ensure your business has the right people, in the right roles, at the right time. 


If you think our approach could work for you, please contact us.


You may also be interested in our eBook – Building a High Performing Team on Purpose, for more insights. Chapter 5 is on talent management which you can read here.

Categories
Key Performance Indicators Performance Management Small Business Recruitment

Why are companies moving from KPIs to OKR and whether you should too

KPIs vs OKR
Small businesses are increasingly turning to OKRs instead of using KPIs. What's the difference? We talk all about it here.

First off…what’s wrong with KPIs?

When you mention the term “KPIs” (Key Performance Indicators) in most companies, you get a mix of reactions.  Managers feel a sense of energy because the certainty that having hard measures in place helps them to reduce the debate about performance.  Staff feel a sense of dread and anxiety, eye-balls rolling into the backs of heads in sequence like falling dominoes.   

Why does this seemingly ever-present dynamic continue to exist in so many companies?  Well, the thing is that KPI has become a swear word in many people’s worlds. It’s not that there is anything inherently wrong with KPIs.  It’s like the word Kit-Kat – this is generally a positive thing, right? But if I poked you in the eye with one over and over again, eventually you will start to want to break my fingers.

The problem with KPIs is that they are fraught with danger.
Below are the many traps managers fall into when developing and implementing KPIs:

  • They measure what is easy to measure, resulting in trivial matters being measured whilst more important areas are not tracked
  • They don’t involve their team in developing them, so staff feel that they KPIs are a punitive and controlling mechanism
  • They lose interest in them, so their lack of follow up proves them to be mostly useless
  • They are not aligned to the strategic and operational priorities, therefore not supporting the business objectives
  • They are not measurable, therefore resulting in a vague representation of performance
  • They have too many KPIs, therefore making the system too difficult to track and manage
  • They believe that the KPIs will do their job for them, so their discussions with staff are at best a waste of time, and at worst are highly demotivating

The end result is that a lot of KPI programs are abandoned, because they are too hard.  An alternative concept that is gaining more exposure lately is to use OKRs instead of KPIs.  OKRs stands for Objectives and Key Results. Now let me tell you, changing the acronym doesn’t mean people will make the same mistakes as in the past.  However, this model has a few differences to KPIs that might just give it a fighting chance. Also, sometimes bringing in something new that doesn’t have the same baggage from the past may help both staff and managers approach performance measurement with a positive mindset. 

What’s the difference between KPIs and OKRs?

What are KPIs?

KPI are measures that are tracked on an ongoing basis.  KPIs can be measured at a company level, divisional level, team level or for an individual employee.  In theory, there should only be a small number of KPIs:
Examples of KPIs are:

  • Cost per acquisition – how much it costs in search engine marketing to achieve one acquisition (whether a lead or sale depending on the goal) 
  • Delivery in Full and on Time (DIFOT) – manufacturing measure of producing goods within agreed timeframes and the order is complete
  • Net Promoter Score % – a customer advocacy measure that shows the comparison of promoters versus detractors
  • Employee engagement score % – an employee score of what proportion of staff in a business are considered “engaged”
  • Lost Time Injuries – the proportion of time lost due to injuries to employees out of the total time available
  • Average call handling time – the average amount of time a person speaks on the phone to a customer for.
  • Cost per ticket – the amount of cost required to close a ticket in IT helpdesk work

You might be looking at this list and think that they could be very useful in certain contexts.  If you are thinking this, then you would be right. They can also be very damaging in the wrong context.  I see many of these used in the wrong way or in the wrong situation and be more damaging than not having them at all.  Conversely, I have also seen them work very well. So my warning is to not simply take something from the guy over the fence and think it is going to work for you in the same way.  

What are OKRs?



OKR stands for Objectives and Key Results.

OKRs have actually been around since the 1950s, but have become significantly more popular since it was revealed that Google used OKRs during a rapid phase of growth.  How much of a part OKRs played in the ultimate success of Google is up for debate, however, what is reasonably clear is that their adoption was assisted by this famous association.  

Let’s look at the Objective part first.  This is a high-level outcome that the business is wanting to achieve.  It relates closely to the organisation or divisions overall success. Below are some example Objectives:

  1. Increase profitability of sales
  2. Build leadership capability
  3. Deliver on the customer promise
  4. Grow a national presence

None of the above statements are measurable as they are not SMART objectives (Specific, Measurable, Actionable, Realistic and Time-based).  This is deliberately the case, because they are designed to be simple and therefore easily relatable back to the company’s overall goals.
Now let’s look at Key Results.  They can be a combination of KPIs and/or SMART goals and this is one of the most attractive parts of OKRs.  The practical reality is that you need both KPIs – that is ongoing measures, as well as goals, which are finished once they are delivered and not ongoing.  Delivering on an Objective may require both Goals and KPIs, but easily summarised as Key Results.
Let’s take the first example Objective of “Increase profitability of sales”.

  • Achieve an average weighted margin of 45% (KPI)
  • Deliver $2m of sales revenue per month in Category A products (KPI)
  • Train and assess 90% of field sales staff in Category A core products by 30 June 2021 (Goal)
  • Align the commission scheme to profitability and implement to be effective from 1 July 2021 (Goal)

You can see that there is a combination of KPIs and Goals in the Key Results that relate back to the overall Objective.

In this example, Category A products are strategically important to delivering increased profitability.  There may be a point of difference that allows a higher profit margin. However, the sales team will need to be equipped to sell the products in the right way and their commission scheme needs to be aligned to support this overall objective if it is not already.  These Key Results would most likely be for a Sales Director or Manager. The Key Results for the sales team can then be cascaded down as well to include their own margins, sales of Category A products and being assessed as competent in the new product.

Where to from here?

OKRs provides a more rounded and relevant framework in which to measure performance, align priorities and to engage the team.  However, it also comes with the same risks and traps that KPIs have always had. Perhaps given they are less known and therefore have less baggage that they have a better chance of success.  The manner in which it is implemented is critical for success. So if you are going to embark on the OKR journey, please make sure not to repeat the same mistakes from the past, or else we may find ourselves jumping on the next model. 


If you have already done this, stay tuned for our 5H2G model of employee performance.
We always welcome questions, so send any our way through here.