Paying for Time; Paying for Impact

Despite considerable progress in recording and quantifying so much of experience, much of job performance still comes down to serving time. Pay for performance has a place in the world, but that place is limited by various constraints.

    Fuzzy Thinking. Managers who lack clear ideas of their expectations from employees rely on time served rather than measuring impact. For them, it is sufficient to have someone fill the position. That employees’ impact on service quality or unit productivity remains fuzzy. These managers would fail to cherish a clear, objective measure of performance.

    Gaps Between the Measure and the Construct. The construct described the valued activity, such as excellent customer service. The measure is the data source to assess that valued activity, such as customer satisfaction surveys. Between the construct and the measure falls the shadow. Few customers actually complete satisfaction surveys: is the measure biased towards the most pleased or the most disgruntled? Could employees manipulate the customer satisfaction survey through ballot box stuffing? That shadow generates uncertainty. Greater uncertainty implies greater risk. Managers are inclined to reduce their risks.

    Mistrust. Whether managers mistrust their measures or their employees, they will be reluctant to take the risk of assessing performance rather than time. The quality of the working relationship of managers and employees provides a basis for trust or mistrust. Managers who have ongoing dialogue with their employees with opportunities to directly observe them in action have the substance upon which to build a trusting relationship. They have a better idea of the measures’ validity: do they reflect the employees’ true abilities?

    Assessment Expertise. Accurately measuring human behavior is a refined capability. Although the broad strokes of assessment may appear obvious at first glance, the devil is in the details.

Currently many companies investigate flexible work arrangements both to increase their attractiveness to employees seeking a more accommodating worklife and to reduce their requirements to provide work spaces for employees.

The first step in supporting a productive, flexible worklife is clearly defining what employees are to do and to describe those expectations to employees in an unambiguous way. A strong performance management system is part of the essential infrastructure for achieving this condition.

Do you have a perfectly clear idea of what you should be doing?

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