A History of Performance Management

17th , the shifting from agriculture to individual artisanship to mass production toward create factory system and the styems form the new role of " Management". 1850s-1910s, the rise of labour union and labor contract for bargaining power of work condition and wages. Majority of managemet practice is pay for performance, task design and divisionalization.

1905, Max Webber introduced the bureaucratic model in 9 aspects. The general principle of precisely defined and organized across-the-board competencies of the various offices" which are "underpinned by rules, laws, or administrative regulations.

Bureaucratic Theory

Specialized roles
Recruitment based on merit
Uniform principles of placement, promotion, and transfer in an administrative system
Careerism with systematic salary structure
Hierarchy, responsibility and accountability
Subjection of official conduct to strict rules of discipline and control
Supremacy of abstract rules
Impersonal authority (e.g. office bearer does not bring the office with them)
Political neutrality

1911, Frederick Winslow Taylor introduced the principles of scietific management. It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with the management alone.

The principles of scientific managemet

Taylor's scientific management consisted of four principles:

Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.
Scientifically select, train, and develop each employee rather than passively leaving them to train themselves.
Provide "Detailed instruction and supervision of each worker in the performance of that worker's discrete task" (Montgomery 1997: 250).
Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.

1960, Douglas McGrregor introduced the theory x and theory y in his human sid eof enterprise book. Manager's individual assumptions about human nature and behavior determined how individual manages their employees.

Theory x and Theory Y

An approach of creating an environment within which employees are motivated via authoritative direction and control or integration and self-control.

Theory X style managers believe their employees are less intelligent, lazier, and work solely for a sustainable income.

Theory Y managers assume employees have a better relationship with their boss, creating a healthier atmosphere in the workplace, enjoy their job, and work to better themselves without a direct reward in return.

1969, Peter Drucker introduced the theory of management by objective (MBO). His definision of MBO is a process of defiing objectives, within an organization, so that management and employees agree to the objectives and understand what they need to do in order to achieve them.

Management by Objective (MBO)

Management by objectives at its core is the process of employers/supervisors attempting to manage their subordinates by introducing a set of specific goals that both the employee and the company strive to achieve in the near future, and working to meet those goals accordingly.

Five steps:

Review organizational goal
Set worker objective
Monitor progress
Evaluation
Give reward

1981, George T. Doran introduced the theory of SMART. Specific, measurable, attainable, relevant and time based. A guide in terms of what they want to achieve, making them deeply inherent in project, program and portfolio management.

SMART GOAL

1988, Seiichi Nakajima introduce philosophy of Total Productive Maintenance (TPM) , a method of physical asset management focused on maintaining and improving manufacturingmachinery, in order to reduce the operating cost to an organization.

The eight pillars of TPM are mostly focused on proactive and preventive techniques for improving equipment reliability:

1- focused Improvements 2- JH Pillar ( Autonomous maintenance) 3- PM pillar ( planned maintenance) 4- QM pillar (Quality maintenance) 5- DM pillar ( Developement maintenance) 6- E&T pillar (Education and tranning) 7- OTPM ( office TPM) 8- SHE Pillar ( safety, helth and Environment)

KPIs

Key performance indicators (KPIs) are ways to periodically assess the performances of organizations, business units, and their division, departments and employees.

The key stages in identifying KPIs are:

Having a pre-defined business process (BP).
Having requirements for the BPs.
Having a quantitative/qualitative measurement of the results and comparison with set goals.
Investigating variances and tweaking processes or resources to achieve short-term goals.

1992, Robert Samuel Kaplan and David P Norton introduce balance scorecard is a strategy performance management tool – a well structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions.

The characteristics that define a Balanced Scorecard are:

its focus on the strategic agenda of the organization/coalition concerned;
a focused set of measurements to monitor performance against objectives;
a mix of financial and non-financial data items (originally divided into four "perspectives" - Financial, Customer, Internal Process, and Learning & Growth); and,
a portfolio of initiatives designed to impact performance of the measures/objectives.

Balance Scorecard

1999, Andy Grove introduce philosophy of Objective Key Reviews (OKRs) , is a goal setting framework used by individuals, teams, and organizations to define measurable goals and track their outcomes.

1999, L. John Doerr published an OKR book which is called Measure What Matters and contained OKRs.

OKRs

OKRs comprise an objective (a significant, concrete, clearly defined goal) and 3-5 key results. Key results should be measurable, either on a 0–100% scale or with any numerical value that can be used by planners and decision makers to determine whether those involved in working towards the key result have been successful.

2003, Marc Russell Benioff introdced V2MOM an acronym that stands for Vision, Values, Methods, Obstacles, and Measures. V2MOM is an iterative, transparent, and feedback-driven process. Everyone has a chance to provide input and feedback which creates buy-in, alignment, transparency, and unity across the organization.

V2MOM

2012, Stephen Richards Covey introduced the 4 disciplines of execution (4DX) is a methodology that helps organizations close the execution gap. It is based on timeless, universal principles of human effectiveness, and on deep insights into why organizations fail to achieve their objectives.

The 4 disciplines of Exection (4DX)

Discipline 1: Focus On The Wildly Important

Discipline 2: Act-On The Lead Measures

Discipline 3: Keep A Compelling Scoreboard

Discipline 4: Create A Cadence Of Accountability

About OKRs

Get to Know OKRs

“OKR” stands for “Objectives and Key Results.” Objectives tell you where to go, Key Results how you will get there. It is a collaborative goal-setting methodology used by teams and individuals to set challenging, ambitious goals with measurable results.

OKRs are how you track progress, create alignment, and encourage engagement around measurable goals.

OKRs Formula are typically written with an Objective at the top and 3 to 5 supporting Key Results.

How to Set OKRs

An Objective is simply what is to be achieved, Objectives are significant, concrete, action-oriented, and (ideally) inspirational.

Key Results benchmark and monitor how we get to the Objective. Effective KRs are specific and time-bound and aggressive yet realistic,measurable and verifiable. At the end of the designated period, typically a quarter, we do a regular check and grade the key results as fulfilled or not.

How to grade OKRs

OKRs are meant to be tracked regularly and graded at the end of a cycle. There are multiple methods for grading (or “scoring”) OKRs.The Andy Grove method of grading OKRs is a simple “yes” or “no” approach. Did you meet it? Or did you not? Most organizations prefer a bit more detail in their grading, so they’ll use a “Red, Yellow, Green” system where red means “we failed,” yellow means “we made progress,” and green means “we met our goal.”

0.7 to 1.0 = green. (We delivered.)
0.4 to 0.6 = yellow. (We made progress, but fell short of completion.)
0.0 to 0.3 = red. (We failed to make real progress.)

Here’s how you would come up with your score:

Attend 25 games to scout out potential recruits?
Approach 30 players throughout these games?
Contact the agents of 10 potential recruits?

Example grade OKRs

You could only get to 20 games so that’s 0.8, an admirable score.
You approached 30 players, so that’s a perfect 1.0.
You were only able to get ahold of 6 agents for 0.6, a borderline green.

Altogether, the average is 80%—or a raw score of 0.8, a passing grade.

Let’s say you are again a soccer recruiter but that you were only able to get ahold of one agent—but that agent represented the star center midfielder that everyone else was after. Your raw score for that KR would be 0.1 but you might give yourself a 0.9 because you were able to get her signed, too. As John Doerr writes in Measure What Matters, “The point of objectives and key results, after all, is to get everyone working on the right things.”

One final thing you want to see variation in your key results. As stated earlier, 70% is a good score. If everything is 100% or 30%, that kind of homogeneity is suspicious.

Common OKR Mistakes

There are a few common mistakes to avoid when writing OKRs:

Avoid Business as Usual: OKRs should aim for change above maintaining the status quo.
OKR vs. KPI: OKRs are more than just KPIs (Key Performance Indicators). They’re measures for change, whereas KPIs are measures of health.
Sandbagging: OKRs are meant to stretch a team and their success shouldn’t be a given.

The Benefits of OKRs

OKRs provide many benefits, including clarity, enhanced communication and a coherent, transparent organization-wide strategy. OKRs. F.A.C.T.S. stands for:

Focus: OKRs allow a team to rally behind a small set of carefully chosen priorities.
Alignment: OKRs provide a method for an entire organization to align its goals at every layer with its top-level priorities and with its ultimate purpose.
Commitment: OKRs demand a level of collective commitment from the parties involved to choose and stick to agreed-upon priorities.
Tracking: OKRs allow a team or organization to track their progress toward a goal and know earlier when to change tactics.
Stretching: OKRs empower teams to set goals that stretch beyond BAU - or “business as usual” - and make significant, meaningful change.

OKRs Comparing