You have to measure to understand
- Ginni Rometty
By the end of this chapter, you will be able to do the following:
1. Argue that perfo rmance invo lves both behavio rs
and results and that perfo rmance is evaluative and
multidimensional in nature.
2. Prepare a list of the factors that determine performance,
including abilities and other t raits. knowledge and skills
(including declarative knowledge and procedural knowl·
edge). and context.
3. Propose a list of contextual factors (e.g .. HR pol icies.
organizational and national culture) that have a d irect
impact on performance.
4. Plan interventions involving deliberate practice
and extreme ownership with the goal of improving
5. Propose how to address and anticipate performance
6. Create a performance management system that
includes key performance indicators (KPis) of each of
the four types or dimensions of performance: (a) task.
(b) contextual. (c) counterproductive, and (d) adaptive.
7. Set up a behavior approach to measuring performance
(e.g .• competency modeling). which basically focuses
on how the job is done. as opposed to the results
8. Set up a results approach to measuring performance,
which basically focuses on the outcomes of work, as
opposed to the manner in which the work is done.
Part II System Implementation
This chapter marks the beginning of Part II of this text, which describes how to implement a performance management system. Whereas Part I addressed strategic and
organizational and other macro-level issues, Part II addresses operational concerns. In
this chapter, we begin with an issue that, at first glance, may seem simple, but it is not:
What exactly is performance and how can we measure it? Answering this question is
absolutely key if we want to implement a successful performance management system,
because if we do not have a good artSwer, we will not be able to craft actual measuresa topic that will be addressed in Chapter 5. Let us begin by defining performance.
4-1 DEFINING PERFORMANCE: BEHAVIORS AN D RESULTS
As shown in Figure 4-1, performance includes (a) behaviors and actions (what
an employee does) and (b) results and products (the outcomes of an employee's
behavior).1 Both of these components are important and they influence each other.
For example, if a student allocates a sufficient amount of efficient time to preparing
for an exam (behavior), it is likely that he will receive a good grade (result). In turn,
receiving a good grade (result) will serve as a motivating factor for continuing to
allocate sufficient time to studying in the future (behavior). So behaviors and results
create a virtuous and self-reinforcing cycle that together constitute performance.
There are two characteristics of the behaviors and results we label "performance.''2 First, they are evaluative. This means that they can be judged as negative, neutral, or positive for individual and organizational effectiveness. In other
words, the value of these behaviors and results can vary depending on the extent
to which they make a contribution toward the accomplishment of individual,
unit, and organizational goals. Second, performance is multidimensionnf.l This
means that there are many different types of behaviors and results that have the
capacity to advance (or hinder) organizational goals.
As an example, consider a set of behaviors that can be grouped under the
general label "contribution to effectiveness of others in the work unit." This set
of behaviors can be defined as follows:
Works with others within and outside the unit in a manner that improves
their effectiveness; shares information and resources; develops effective
working relationships; builds consensus; constructively manages conflict.
Contribution to the effectiveness of others in the work unit could be assessed by
using a scale that includes anchors demonstrating various levels of competence. For
example, anchors could be words and phrases such as "outstanding," "significantly
exceeds standards," "fully meets standards,""does
not fully meet standards," and "unacceptable." This
illustrates the evaluative nature of performance
Performance: Combination of Behaviors and Actions. and Results
this set of behaviors is judged as positive,
neutral, or negative. In addition, this example illustrates the multidimensional nature of performance
because there are several behaviors that, combined,
affect the overall perceived contribution that an
employee makes to the effectiveness of others in the
work unit. In other words, we would be missing
important information if we only considered, for
example, ''shares information and resources" and did
not consider the additional behaviors listed earlier.
Defining Performance and Choosing a Measurement Approach
Performance management systems also include measures of results or products that we infer are the direct result of employees' behaviors. Take the case of
a salesperson whose job consists of visiting clients to offer them new products
or services. The salesperson's supervisor is back in the home office and does not
have an opportunity to observe the salesperson's behaviors firsthand. In this
case, sales volume may be used as a performance measure. In other words, the
supervisor makes the assumption that if the salesperson is able to produce high
sales figures, then she is probably engaging in the right behaviors.
4-2 DETERMINANTS OF PERFORMANCE: ABILITIES AND
OTHER TRAITS, KNOWLEDGE AND SKILLS, AND CONTEXT
Why do certain individuals perform better than others? What factors cause an
employee to perform at a certain level? A combination of three factors allows
some people to perform at higher levels than others: (1) abilities and other traits,
(2) knowledge and skills, and (3) context.4
Abilities and other traits include such things as cognitive abilities (i.e.,
intelligence), personality, stable motivational dispositions, and physical characteristics
and abilities. Also, knowledge and skills include job-related knowledge and
skills, attitudes, and malleable motivational states. Knowledge and skills can be
divided into declarative J,:nowledge, which is information about facts and things,
including information regarding a given task's requirements, labels, principles,
and goals; and procedural knowledge, which is a combination of knowing what
to do and how to do it and includes cognitive, physical, perceptual, motor, and
interpersonal skills. Finally, contextual issues include HR policies and procedures
(e.g., compensation system), managerial and peer leadership, organizational and
national culture, issues about time and timing of performance, and resources and
opportunities given to employees to perform.
As shown in Figure 4-2, performance results from a combination of all three
factors. Also, the three factors have an additive relationship. This means that two
employees can achieve the same level of performance by having different combinations of factors. For example, one employee can be more motivated and spend more
hours at work, whereas another can work fewer hours, but have higher levels of skill.5
In addition, however, if any of the determinants has a value of 0, then overall performance is unlikely to be satisfactory. For example, consider the case of
Jane, a sales associate who works in a national clothing retail chain. Jane has
excellent declarative knowledge regarding the merchandise. In particular, she
knows the names of all of the brands; the prices for all products; sizing charts for
clothes for women, men, and children; and sales promotions. So her declarative
knowledge is very high. Jane is also intelligent and physically able to conduct all
of the necessary tasks- both considered important traits for the job. However, her
interactions with customers are not so good (i.e., procedural knowledge regarding interpersonal skills). She does not pay much attention to them because she
is busy restocking clothes on shelves and hangers. She does not greet customers
and is also not good at providing answers to their questions. Her overall performance, therefore, is likely to be poor because although she has the declarative
knowledge necessary to do the job, as well as cognitive and physical traits, she
Jacks procedural knowledge. In short, it is necessary to have at least some level
of each of the determinants of performance.
Determinants of Performance: Abilities and Other Tr8lls, Know1edge and Skills. and Context
(lr1om'lalion about facts and
lhir'w;)S, inctuding lnfonnation
regarding a fjlten taSk's
and goats). procedl.l'al
what to do and
Defining Performance and Choosing a Measurement Approach
4·2·1 Abilities and Other Traits, and Knowledge and Skills
An important d ifference between abilities and other traits and knowledge and
skills is that knowledge and skills are more malleable-meaning that they are
easier to change. For example, cognitive abilities and personality traits are fairll
stable.6 For example, the following personality traits are called the "Big Five" :
1. Extroversion: being sociable, gregarious, assertive, talkative, and active
(the opposite end of extroversion is labeled introversion)
2. Neuroticism: being anxious, depressed, angry, embarrassed, emotional,
worried, and insecure (the opposite pole of neuroticism is labeled
3. Agreeableness: being curious, flexible, trusting, good-natured, cooperative,
forgiving, and tolerant
4. Conscientiousness: being dependable (i.e., being careful, thorough,
responsible, and organized), as well as hardworking, achievementoriented, and persevering
5. Openness to experience: being imaginative, cultured, curious, original,
broad-minded, intelligent, and artistically sensitive
In general, individual differences that are less malleable are called "traits."
Those that are easier to change, for example, through a training program or other
organizational interventions, are called "states." For example, consider the fact
that employees vary in terms of their motivation: how much energy and effort
they allocate. Specifically, consider the following three choices:
1. Choice to expend effort (e.g., "I will go to work today")
2. Choice of level of effort (e.g., "I will put in my best effort at work" vers us
"I will not try very hard")
3. Choice to persist in the expenditure of that level of effort (e.g., "I will give
up after a little while" versus "I will persist no matter what")
The first two are more malleable and therefore considered state motivation.
For example, we could influence an employee's choice regarding w hether she
shows up at work- and on time-using HR policies regarding absenteeism and
tardiness. We could influence the second choice by setting clear goals. But the
third is less malleable and more likely to be a stable individual trait (rather than
a state). This type of trait motivation is considered a fairly stable personality trait,
called "achievement motivation," and is a facet of conscientiousness.
What can we do to improve our own knowledge and skills and therefore improve
our performance? Let us think about those individuals who have achieved the top level
of performance in their fields. Think about Leo Messi and Cristiano Ronaldo as soccer
("football" outside of North America) players, Beyonce as a singer and songwriter,
Bill Gates as Microsoft's founder, Magnus Carlsen as a chess player, Thomas Edison
as an inventor, Marie Curie as a physicist and chemist, and Socrates as a philosopher.
How did they achieve such excellence? What made these individ uals' performance
so extraordinary? How were they able to improve their performance constantly even
when others would believe they had reached a plateau and could not possibly improve
their performance? What these individuals have in common is that they devoted
a large number of hours to deliberate practice.8 Deliberate practice is different from
regular practice and from simply working many hours a week Professor K. Anders
Ericsson of Florida State University gives the following example: "Simply hitting a
Part II System Implementation
bucket of balls is not deliberate practice, which is why most golfers don't get better.
Hitting an eight-iron 300 times with a goal of leaving the ball within 20 feet of the pin
80% of the time, continually observing results and making appropriate adjustments,
and doing that for hours every day- that's deliberate practice." Top performers in
all fields engage in deliberate practice consistently, daily, including weekends. The
famous pianist Vladimir Horowitz was quoted as saying: "If I don't practice for a
day, I know it; jf I don't practice for two days, my wile knows it; jf I don't practice for
three days, the world knows it." Deliberate practice involves the following five steps:
1. Approach performance with the goal of getting better and better.
2. As you are performing, focus on what is happening and why you are
doing things the way you do.
3. Once your task is finished, seek performance feedback from expert
sources, and the more sources, the better.
4. Build mental models of your job, your situation, and your organization.
5. Repeat steps 1-4 continually and on an ongoing basis.
Think about a particular task at which you would like to do better. This could be
job-related, school-related, or a hobby (e.g., music, sports, cooking, playing poker).
Now, create a deliberate practice program for yourself. Who are the experts from
whom you could solicit feedback? How often would you practice? For how long?
What would be some of your specific goals you would like to achieve, and by when?
The third determinant of performance is context because performance is also
determined by what is happening around the employee. For example, HR policies
and practices can have an important impact on employee performance. Take the
case of IBM. In December 2016, Ginni Rometty, IBM's CEO, said that over the
next four years, the company will invest US$1 billion in training and development in the United States.9 In contrast to IBM, working for a company with an
HR function that does not offer much in terms of training means that, sooner or
later, performance will suffer as skills become obsolete.
As a second example, an organizational culture that does not promote
excellence will also have negative consequences on performance. Take the case
of a compensation system that includes paying everyone the same, regardless
of employee performance-this is unlikely to motivate employees to do better.
As a third example, time and the timing of performance is another contextual
factor that also p lays a role. Specifically, typical performance refers to the average
level of an employee's performance, whereas maximum performance refers to the
peak level of performance an employee can achieve. Employees are more likely
to perform at maximum levels when they understand they are being evaluated,
when they accept instructions to maximize performance on the task, and when
the task is of short durationw A key issue is that the relationship between typical
(i.e., what employees will do) and maximum (i.e., what employees could do)
performance is very weak. What this means is that measuring performance during
short time intervals may be assessing maximum, and not typical, performance.
Most organizations are more interested in what employees will do on a regular
basis, rather than what they could do during the short period of time when
they are observed and evaluated. In short, the time and timing of performance
observation and measurement also affect the observed levels of performance.
Defining Performance and Choosing a Measurement Approach
Fourth, resources and opportunities to perform are important contextual
issues as well. There is a harsh reality in organizations that involves some
employees receiving less resources and opportunities than others. 11 For example,
within the same firm, some consultants may have more opportunities to work
with important clients than others. This issue is quite obvious in sports: there is
a limited amount of playing time during each game. So some athletes have more
playing time than others. In both of these cases, although employees may have
the same levels of abilities and other traits as well as knowledge and skills, differential levels of opportunities will have a direct impact on their performance.
Finally, consider the issues of organizational and national culture. Take the
case of World Com, a company that was the second largest long-distance phone
company in the United States before it collapsed in 2002. One of the reasons for its
collapse was its" cult-like corporate culture" around a charismatic leader, former
basketball coach Bernie Ebbersn Ebbers exercised unquestioned authority and
demanded unquestioned loyalty from employees. Within this context, it was difficult, if not impossible, for employees to do anything different from what they
were told-even if this meant doing things that were clearly unethical. This was
an important contextual factor that affected the performance of all employees at
WorldCom, regardless of their levels of abilities and traits as well as knowledge
and skills. National culture can also affect performance in meaningful ways.
For example, cultures that are more hierarchical and power centered are less
likely to lead to outstanding performance regarding such issues as creativity and
innovation. On the other hand, these types of cultures can result in outstanding
performance regarding standardization, speed, and efficiencyn
4-2-3 Implications for Addressing and Anticipating Performance
The fact that performance is affected by the combined effect of three different
factors has implications for addressing as well as anticipating performance
problems. To do so properly, managers must find information that w ill allow
them to understand whether the source of the problem is abilities and other
traits; knowledge and skills; contextual issues; or some combination of these three
factors. If an employee lacks procedural knowledge but the manager believes
the source of the problem is declarative knowledge, the manager may give the
employee a manual with facts and figures about products so he can acquire
the knowledge that is presumably lacking. In the example of Jane discussed
earlier, this would obviously be a waste of time and resources for the individual,
manager, and organization because it is lack of procedural knowledge, and not
lack of declarative knowledge, that is causing her poor performance. This is why
performance management systems should not only measure performance, but
also be a tool to tmderstand the source of any performance deficiencies.
Another issue regarding the identification of performance problems relates to
what is called ownership, or what Jocko Willink, retired United States Navy SEAL
and former commander in the Battle of Ramadi in Iraq, calls extreme ownership.14
Willink served in SEAL Task Unit Bruiser, the most highly decorated Special
Operations unit from the war in Iraq. They faced tremendous difficulties along
the way, including being involved in a "blue-on-blue": friendly fire-the worst
thing that could happen. One of the American soldiers was wounded, an Iraqi
soldier was dead, and others were seriously wounded. This incident led to asking
Part II System Implementation
very difficult questions, and the most critical one was: "Who was responsible for
this debacle?" Willink notes that the very first step is to take ownership of poor
performance, no matter how painful this ...
Purchase answer to see full