Understanding Individual Performance in an Organisation

Employee performance is a favourite topic of mine because it is one which is often very misunderstood and in this blog I want to give you a sense of why I think this to be the case!
Let us start with a simple scenario. Sam is a very competent saleswoman and she works for a company who we will call ‘Old School’. Sam is in charge of selling a product which has become less easy to sell in recent months. Customers seem to be buying a competitor’s product which better meets their requirements. The recently implemented Old School CMS is time consuming and clunky whilst the company have recently introduced additional reporting procedures to try and control cost. All of this has created more bureaucracy for Sam. Her figures show a decline in performance from the previous year and going into her quarterly review, Sam feels frustrated, vulnerable and unsure about what to do.
During the meeting, her manager Nick, suggests that Sam should try harder to sell Old School’s products. “Yes it is tough but you need to be more innovative in your approach and need to try even harder” he tells her as he awards a ‘Requires Performance Improvement’ grade. Sam had already being working very hard but at least she is now sure about what to do. She leaves her review meeting feeling completely demoralised and the first thing she does is to phone a recruitment agency. The question is was Sam to blame?
A traditionalist like Nick might say yes. Yet what this example hopefully shows, is that an individual’s performance is actually impacted by many different factors out with the control of the individual. In Old School we saw external changes to the market in the way of new competition as well as significant internal change imposed upon Sam. What we’ve seen is the greater system impact her total performance leaving Sam stuck as something of a bystander to events. The renowned late American industrialist Edward Deming talked about the 85/15 rule – that in certain circumstances the system was responsible for up to 85% of an individual’s actual performance. We could argue about the actual weighting of this ratio but he highlights a very important point. If Nick had understood this he could approach the problem differently and work with Sam to look at the decline of performance in a more constructive way.
The misunderstanding of the multifaceted nature of performance can be hugely detrimental to business success and individual wellbeing. I’m not saying for one minute we have an abdication of individual responsibility, but surely if we recruit the right people in the first place and they pass their probation period, they’re competent to work for the company? I’ll leave you with one last thought, imagine how nicer work would be without a blame culture…
What do you think, does this example resonate with you?

1 comment:

  1. So true David, I have even been in companies that have set individuals sales people targets that they have not a hop in h*** of achieving because contracts were not up for review during the period set! However targets ( Pounds ) need to be allocated! Crazy. Also sales managers don’t understand vibration and those no two sales territories will have the same potential and will have many other variables.