‘What gets measured, gets managed’, runs the old business guru homily, usually meant to justify a draconian and intrusive Taylorist workplace snooping.
But there’s no point in measuring if you are not going to then promote and reward quantifiable improvements. We call this Performance Engineering.
Setting measurable performance targets means identifying the behaviours you want to change, the costs you want to save, the sales you want to generate, or some other metric.
Setting a general goal such as “increase sales” may work for a focussed mobilised sales force which has the initiative to think of ways to do so, but sales teams that lack initiative will often only be able to achieve this goal by working harder, increasing their volume of sales calls, and hoping that this generates additional business. Raising the bar without giving staff the tools to reach higher can be demotivating.
A smarter approach is this scenario might be to supplement the main ‘sales volume’ incentive with a number of more focussed ‘side bets’, targeting particular behaviours, for instance, rewarding additional incentives for cross-selling, or up-selling, increasing the yield per sale than the volume of sales. This puts less strain on sales teams to make more calls, but gives them a focussed activity to convert bigger wins.
It’s important to communicate what you’re doing. This isn’t a scientific experiment where you don’t want the subjects of the experiment to modify their behaviour whilst they are being observed. It’s more like engineering where you can adjust the parameters and observe the results, tuning the performance for maximum result. Users like to know the rules of the game, that result X brings reward Y.
The beauty of an incentive system like iD-points is that you can run multiple incentives at the same time, and set them up quickly. As well as a baseline reward campaign, add short-sharp-shock campaigns that target particular behaviours, and rapidly build a picture of what drives performance within your organisation.
To summarise, the principles of Performance Engineering:
- Choose your metrics carefully.
- Target specific activities.
- Reward performance gains.
- Communicate what you’re doing.
- Run short campaigns.
- Tune parameters to maximise performance gains.