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Posts Tagged ‘Performance Management’

Practitioner Interview: Ihab Ibrahim’s Take on Aligning Sustainability Targets To Strategy Plan

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In an interview with The KPI Institute (TKI) Publishing Team, Ihab Ibrahim Mohamed Alsakkti, a Strategy and Performance Manager at Alkifah Contracting Company, shares his insights and expertise in organizational performance management for the next issue of Performance Magazine – Print Edition.

On the one hand, investing in sustainability is no longer a nice-to-have strategy. But it is absolutely a need-to-have strategy to ensure compliance with governmental and regulatory requirements.

Here is an excerpt of the interview, where Ihab highlights the effect of sustainability in strategy planning and performance management.

Practitioner Interview: Hassan Al-Asaad on the Pursuit of Employee Happiness in Running a Successful Organization

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Hassan Khalid Al-Asaad, Strategist and Business Developer at Gulf Cooperation Council Interconnection Authority (GCCIA), believes that one of the future major challenges in managing performance is achieving employees’ happiness.

Employee happiness is one of the most important factors in running a successful, profitable company. Happy and engaged employees tend to miss less work, perform better, and support company innovation.

In this interview, he explains the critical role of pursuing the employees’ happiness, how it affects the performance of employees, and why organizations should exert more effort in research and development in attaining the happiness of employees.

Up the Career Ladder or Across It?

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Horizontal progression or lattices started to spread among employees, particularly millennials, years ago. Many individuals are working to progress their career paths horizontally instead of vertically. This raises two important questions: Is it better to move up the ladder or across it? Is it better for the companies to hire those who progress vertically or horizontally? 

Vertical career progression refers to usual career growth within the same field. Being promoted from a marketing executive to a senior marketing specialist, and then to a marketing manager is an example of that progression. As for horizontal career progression, it refers to growing skills in more than one field. For instance, an individual may start working as a marketing executive, and then decide to shift to the sales department to gain more experience in selling products and dealing with customers.

Vertical career progression has always been the common career path in the workplace across the industries. However, change has been going on at a fast pace. All types of organizations (profit, non-profit, public and private) are all experiencing quick changes in various areas. Especially after the pandemic, things have developed massively, and new skills and competencies are arising everyday in the workplace, particularly in companies working on creating innovative and agile environments. 

Benefits of Horizontal and Vertical Career Progression

Both types of career progression are essential and beneficial in the workplace as they will enable managers and leaders to have a wide range of skills within one department. With organizations reducing their boundaries every day due to the changes occurringmanagers, leaders, and recruiters need to look at career progression from a different point of view other than the traditional one. 

Employees going up the ladder will benefit their departments with their long experience and in-depth knowledge in terms of delivering their projects or tasks on time and with high quality. Even when they deal with their clients, they will be able to reflect easily using their long experience in the field. Moreover, they will be able to transfer their experience and knowledge to the younger ones via coaching, feedback sessions, and on-the-job learning.

Due to the wide range of skills, employees moving across the ladder are also vital and  bring a positive impact to their departments. Despite their short experience within one field, they are equipped with a set of skills that will be beneficial to various situations. For instance, an employee who spends some time in the marketing and the sales department will have some experience not only in promoting the company’s products but also in communicating with the customers.

The marketing department can benefit from such employees in enhancing their customer outreach and passing on knowledge to others through tips or advice in communicating with customers. This can be valuable in companies trying to embed agility within their cultures. Most common types of agile environments include scrum and lean. These types of environments require flexibility, continuous problem solving and discovering solutions. As a result, both types of employees will provide lots of ideas and solutions. They will look at problems from different angles. 

How Companies Support Employees’ Career Progression

According to Deloitte, due to today’s flatter organizational structures, businesses have less options for developing their employees and moving their career up the ladder. So, lattice organizations are expanding career tracks to incorporate lateral, diagonal, and planned descents as a strategy to help employees progress. They report that employees become more adaptable through career movements across organizational silos, improving their strategic flexibility.

Incorporating different options of career development will require companies to change the way their job structures, work cultures, and career development plans. However, companies will reap its sweet fruit through having more motivated and productive employees, innovative culture, better performance, as well as more flexibility and adaptability. Moreover, it will help companies face their current challenges such as high turnover rates and employees with limited skills that cannot balance the needs of today’s industry.

In the end, it is believed that even with all these changes undergoing in the world, both career paths are needed within the workplace. Employees get to choose the career path that suits  their priorities and future plans. But at the same time, their choices have to be well planned and thought of because there is a huge difference between growing horizontally in a structured manner and hopping from one job to another. In the same context , companies need to go beyond the traditional linear career path and embrace other ones to be able to come up with the changes going on.

Whether you go up or across the ladder in choosing a career growth, it is important to be competent. Invite your colleagues and join The KPI Institute’s Certified Performance Management Professional course to boost the knowledge and skills on improving performance at all organizational levels. Visit The KPI Institute’s website for more information.

   

Big Data: The Next Frontier of Performance Management

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Image Source: Tumiso | PIxabay

The value of Big Data has found its way to the core of many organizations. NewVantage Partners’ 2021 executive survey showed that 99.0% of the companies they surveyed are investing in data initiatives while 96.0% attest that Big Data and AI efforts were generating results. 

However, working with Big Data is not easy for all companies. The survey revealed that 92.2% of leading companies consider culture (people, process, organization, and change management) as the top reason why becoming a data-driven organization remains challenging.  

Organizations should recognize that integrating Big Data into performance management would allow them to further improve their performance , make strategic decisions, and achieve higher efficiency in many areas of business. 

How does that happen? First, it is important to know what Big Data is and what it is not. 

Big Data is not about having a higher volume of data. IBM defines Big Data as “a way of harvesting raw data from multiple, disparate data sources, storing the data for use by analytics programs, and using the raw data to derive value (meaning) from the data in a whole new way.”

Mayer-Schönberger and Cukier, authors of “Big Data: A Revolution That Will Transform How We Live, Work, and Think,” wrote that Big Data can generate new insights and develop new forms of value in a manner that changes how people live.  

The reason is that Big Data can reveal trends and patterns. In an ever-changing business landscape, organizations working with Big Data would allow them to make decisions based on facts. This echoes what Geoffrey Moore, a famous American organizational theorist & author of “Crossing the Chasm,” was quoted saying: “Without big data analytics, companies are blind and deaf, wandering out onto the web like deer on a freeway.”

Big Data’s Role in Performance Management and Measurement

The value of Big Data lies in improving the performance and processes of an organization. 

For instance, Big Data can provide insights into customer preferences. Understanding customer preferences and using them as a basis for strategies can lead to increased sales. With better forecasting, Big Data can guide companies in determining where they need to invest. A manufacturing company would be able to accurately identify the equipment that needs replacing. Moreover, the automation of high-level business processes can make organizations more effective and efficient. 

In the conference paper, “Is Big Data the Next Big Thing in Performance Measurement Systems?” the authors concluded that the presence of a variety of data could expand the horizons of PMSs due to the application of different kinds of metrics. The applications of Big Data in PMS are in planning, controlling, and improving business performance as well as in strategic planning, controlling operations, and processes improvement.

The authors found the reasons for using Big Data and PMSs similar, and they revolve around decision-making and action-taking. “PMS supports decision-making [by] providing meaningful and appropriate data [developed] through a series of activities, such as analyzing and interpreting data from past actions to influence the future performance.”

Big Data in Action

The success of Netflix,  a streaming service company, is attributed to their usage of Big Data. For content development, their objective is to determine what their audience would want to watch next. To analyze the behavior and preferences of their over 140 million subscribers, Netflix used metrics, such as “What day you watch content,” “Searches on the platform,” “User location data,” “When you leave content,” “The ratings given by the users,” and even “Browsing and scrolling behavior.”

Netflix also uses Big Data in addressing challenges in production planning, such as determining shoot locations and arranging a shoot schedule. With prediction models, Netflix can minimize their efforts and reduce their expenses.

Xerox, the world’s largest provider of digital document solutions, once faced a problem with its workforce and needed to cut employee training costs and lower the premature attrition of its employee pool. With the help of Big Data, the company executed a predictive recruiting program in order to assess and filter applicants. Big Data and Big Data analytics helped them recruit people who have more technical skills and are more likely to stay longer with them. This means lower cost of training. The reduced attrition successfully helped the enhancement of Xerox’s bottom line.

Big data is a new source of competitive edge for any organization as it permits them to provide faster and more intelligent decisions, makes information more transparent, generates unprecedented insights into market situations and customer behavior, and optimizes business performance.

If you would like to discover new knowledge and the practical application of best practices used in analyzing statistical data, sign up for The KPI Institute’s Data Analysis Certification.

The impact of the pandemic on performance management practices

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Image Source: aleksandrdavydovphotos | Canva

The COVID-19 pandemic has left a strong mark in all aspects of our lives. It has impacted society – our habits, routines, and the way we interact. It has pressured the economy, its financial stability, and the way we do business.

Thus, what has changed in the way managers are doing performance management in these volatile times?  

1. The way we do strategic planning

Before the pandemic, risk management, scenario planning, and business continuity plans were specific to large corporations. Nowadays, even small organizations will have a plan B ready for different scenarios of the COVID-19 evolution. There are industries, like retail, where all planning revolves around foresting based on historical data. Nowadays, using data from the past to plan the future seems a futile attempt to regain the feeling of control.  

Moreover, most organizations, regardless of their industry, rely on annual if not 3 to 5 years planning. It is obvious that in the present circumstances and given the complexity of managing a business nowadays, these strategic planning practices seem useless. 

2. The importance given to performance measurement

More than ever before, real-time data is a vital management tool. Access to data is critical in managing a crisis. One of the positive side effects of the pandemic was the pressure to digitize operations that create opportunities for data collection and better measurement of operations.

3. The way employees can be evaluated

Remote work and hybrid systems (combining work from home with office time) are no novelty, but in the COVID-19 circumstances, they gained significant recognition and became the norm rather than the exception for many organizations.

Managers and team leaders can no longer directly observe employees. There is a series of soft competencies, like communication, collaboration, proactivity, and creativity that are very difficult to evaluate in an online working environment, and yet they are essential skills for many jobs.

What is the way forward?

1. A different way of planning

Risk management must be an inherent part of organizational strategy, regardless of the company size. You don’t need a risk management office to have a proactive management approach and handle risks well. Small organizations can use their performance scorecard and populate it with leading KPIs or Key Risk Indicators. 

For example, setting a red line level for # Days in accounts receivable can help you manage better cash flow, monitoring # Safety non-compliances can provide insights into the risk exposure to # Work accidents resulting in mortality. Identifying different scenarios in key areas of business and having contingency plans can give any organization a heads-up in case of a crisis.

Strategic planning must concentrate on shorter time horizons and reassess a series of factors that organizations may not have considered on a quarterly basis. 

Government interventions, international economic context, competitors’ reactions, customers’ preferences, customers buying power, suppliers’ situations, internal capabilities and optimization potential, and employees morale and productivity are factors that have changed post-pandemic and need to be investigated.  Moreover, agile strategic planning processes must be set in place to enable the organizations to react fast to changes.

2. Changes in the performance measurement framework

In the face of chaos, the most effective tool to put everyone on the same page is to use clear objectives, KPIs, and initiatives, even short-term ones. The challenge is to adapt the measuring and reporting of performance to respond to tight deadlines. Data must be available fast, preferably in real time.

Thus, identify five to 10 KPIs that are easy to use, concise (tackle the problem directly), and can be collected with high frequency (weekly, monthly). These will be the ones that help you navigate a crisis. Now is the time to replace complex measurements and reports with simple yet relevant tools.

In the medium term, most likely for many organizations, the entire strategy must be reconsidered and linked to relevant performance scorecards in which simple measurements can be combined with more complex KPIs to provide a holistic overview of performance.

3. Focus on building the right mindset for each job than defining the specific job outputs

Many organizations invest a significant amount of time in identifying the right KPIs and targets to capture as precisely as possible the employee’s performance or productivity. Moreover, the more complex the job is, the more difficult it is to capture all contributions in relevant KPIs. In a volatile business environment, such an approach makes targets and KPIs obsolete the moment they are communicated. 

The performance criteria used for employee evaluations should be flexible, easy to adapt and more focused on the extent to which the role is successfully achieved, as compared to looking at operational details. For example, it should be less important if the employee delivered one or three safety awareness sessions to factory workers if their awareness level is at the desired level. 

One methodology that can be used at the employee level is the Objectives and Key Results Framework. OKRs are set and reviewed quarterly, but they can be changed even more often if the result set is no longer of interest. They emphasize on the importance of personalizing the objectives and key results and making the employee accountable for setting and monitoring them. Not all key results have to be KPIs; some of them can be reflected by completing an initiative or other types of results.  

The end purpose of an OKRs system is not to compare employees or indicate what percentage of your staff are high performers. This methodology aims to facilitate communication, clarify expectations, align work activities to corporate strategy, and to provide a tool for managers and employees for discussing individual performance and improvement opportunities.

You can learn more about OKRs through The KPI Institute’s Certified OKR Professional Course.

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