Tying Employee Performance to the Strategic Plan (Part 2)

December 24, 2013 Selling Comments Off on Tying Employee Performance to the Strategic Plan (Part 2)

By Bill Phillips, Strategen, Inc.

In November we discussed the basis of Strategic Plan metrics and the three areas for metrics. They are:

1. Performance metrics
2. Follow up to determine progress and status
3. Visual management tools to show continuous progress and status

This month we will start the discussion of all three in detail and discuss methods for all three areas.
The dictionary defines a performance metric as a “metric that determines an organization’s behavior and performance.” This sounds clear and to the point but many people struggle with establishing and utilizing this concept. We suggest a three step process when dealing with performance metrics:

1. Identify, develop and establish requirements that define critical processes internally and externally
2. Identify measurables that are quantifiable
3. Establish targets for the measurables and track progress towards the results

This initial step requires the establishment of Key Performance Indicators (KPI’s) for both your organization and individual departments. Our focus should not only be on the overall company KPI’s but on how these metrics and the mentality they create are driven to each department manager and his/her people.The strategic plan is a management tool and not just another document that takes up space in the office and it is critical that the KPI’s tie back to the strategic plan to close the loop.As with developing the strategic plan, developing the KPI’s and other requirements requires management to know their business and make strategic decisions about what it is they really do and what they need to measure and watch. This can be tough for many people but as with anything we recommend you start simple, building as the plan develops and the team has experience to fall back on. Over time KPI additions and deletions will be made and doing so will help establish a solid basis from which to grow.

The KPI’s developed have to be quantifiable. Numbers make the world go around and in business they are the drivers for success. It is critical for management and staff to understand the important numbers that they will be measured against and that will drive the business.

Once the KPI’s have been established the targets need to be defined, that is the goals that the company and people will be expected to meet. Goals must be realistic, simple and attainable.For example, while we all want 100% on time delivery we have to accept that something along the way is going to happen that many times prevent this from occurring and at times these things can be out of our control. So setting an on time delivery goal of 98.5% is a fair option. Do this with every measurable you established and write it down.Once the KPI’s and the overall company goals are established the management team can work to finesse the list and the numbers. This brings us back to why it is so important that your measurables be quantifiable.

So for this month you can work on establishing these KPI’s, identifying the measurables and establishing the targets for each. Next month we will look at the follow up required to use these tools.

Coaching these skills is a critical part of what we do. We are here to help you develop and implement your Strategic Plan and coach and develop the skills to implement the plan successfully.

We are having great success coaching and implementing these methods and skills and our clients love it!

About Strategen, Inc.

Bill has over 25 years of experience in manufacturing organizations. Bill will go into a company and develop tailored strategies to assist with management and growth and then help implement those strategies. Visit www.strategen1.com for details.