Performance is a series of management actions around the goal, which are connected with each other, have a beginning and an end, and finally form a systematic management closed loop. Therefore, the basic premise of performance is the goal, so to speak, without the goal, there is no performance, and there is no performance management.
In performance management, goals should be turned into evaluable and measurable appraisal indicators, and the most commonly used appraisal indicator design model is KPI (Key Performance Indicators).
In the current definition of performance, performance = result + behavior is generally recognized as the mainstream idea, that is, performance is not only simply reflected in the final performance result, but also the behavior in the process is also an indispensable component of performance. Therefore, performance management is not only the management of results, but also the management of processes.
Performance results are usually assessed with KPIs, and the performance process is usually assessed with GS (Goal Setting), KPIs are quantitative assessments, and GS is qualitative assessments.
KPI is not a new thing, most enterprises are around the KPI for the design and operation of the performance system, for a long time, all walks of life on the KPI reputation, from the earliest "performanceism ruined Sony", to recent years at home and abroad Internet manufacturers have "to KPI", there are more enterprises to implement the performance system half-dead, like chicken ribs, so that the human resources department speechless, miserable.
The author firmly believes that although there are various problems with KPIs, their "result-oriented" characteristics are extremely valuable at all times, and it is necessary to have a correct understanding of KPIs and not to be easily led into rhythm. The author has the following three views on KPIs:
1. No good results don't matter if there is no good process
The most distinctive feature of KPI is "result-oriented", on the one hand, the hero is judged by the result, "no matter whether the cat is white or black, it is a good cat to catch the mouse", which is simple and rude, and very effective; On the other hand, KPI is related to the vital interests of everyone in the organization, everyone cares about it, and everyone will work hard for KPI, so KPI is the best traction.
The so-called traction is to be result-oriented, that is, to complete the KPI no matter what, the KPI cannot be achieved, no matter how good the process or behavior is worthless, it may be a bit extreme, but it is to shape the seriousness and authority of the KPI, so that everyone in the organization should pay close attention to the KPI and take it as their responsibility to achieve the KPI, rather than getting caught up in the details of the process or behavior.
2. Process management based on KPI achievement
KPI is traction, which means that you can't wait for KPI to be realized, and you need to do process management based on KPI.
Performance process management includes goal setting, performance coaching, performance interviews, etc. When setting goals, tell subordinates the meaning behind the goals, and analyze the strategies and paths to achieve the goals with subordinates. In the process of work, according to the problems exposed by subordinates, targeted performance coaching is carried out, helping subordinates solve various problems, and giving corresponding resource support; After the performance evaluation, the performance results are fed back to the subordinates, and the subordinates analyze the reasons for the performance not to meet the standards, formulate improvement plans, and put forward valuable targeted suggestions for the career development of subordinates.
3. Build key process standards around KPIs
The purpose of process management is not simply to do a good job in the process, but ultimately to serve the achievement of KPIs, so process management must always serve the results.
From this point of view, what kind of process management is necessary to achieve results? To become the core issue of process management, for enterprises, around the KPI results to achieve, the construction of key management standards in the process is very important, on the one hand, to avoid the generalization of process management, on the other hand, to establish a strong bond between the process and the results, the process really becomes the grasp of the results.
Knowing the three core points of KPIs, how do you design them? The author has a special article on the design method of KPI before, and interested readers can refer to it, so I will not repeat it here.
In recent years, with the changes in the external environment, OKR has gradually become popular, and there is even a saying that "OKR replaces KPI", how to view the relationship between OKR and KPI?
OKR and KPI are management tools, since it is management, the essence is a closed-loop system, starting from the goal setting, must go through communication feedback, improvement and other process management, and finally complete the closed loop, although the vast majority of enterprises make KPI into a "only look at the results, regardless of the process" performance appraisal, but that is the deviation at the operational level, and does not change the essence of KPI to follow the management cycle.
There are three differences between OKRs and KPIs:
First, the drive mode is different. KPI is driven from top to bottom, and the company's goals are implemented layer by layer to each responsibility unit and position of the organization through target decomposition, and then KPIs are defined to form responsibility locking; OKR is driven by a combination of top-down and bottom-up, but the following is the main one, the company has a general goal, and each responsibility unit and position of the organization should define their own goals according to the overall goal, so OKR is not a word or saying of "goal decomposition", and it is replaced by "goal alignment", which is called "alignment" in English.
Second, the closed-loop approach is different. Both KPIs and OKRs follow the basic rules of closed-loop management, but the closed-loop points are different. KPI should be evaluated and scored, and the performance results are forcibly distributed into performance levels, and then linked to incentive cashing to complete the closed loop, OKR can not be applied to assessment and scoring, but through the communication and feedback of superiors and subordinates, formulate an improvement plan, and clarify the direction of the next action, so as to complete the closed loop in this way.
OKR must not be scored, to provide factual data of key events as a closed-loop basis for team communication and next action improvement, some experts say that OKR can be scored, can also be used as an incentive, the author does not agree, if OKR does this, what is the difference between it and KPI?
Third, the application environment is different. You can observe, which industries and enterprises apply OKR more? The answer is obvious, it is widely used in Internet enterprises, while there are very few applications in traditional industries, such as construction, manufacturing, agriculture and animal husbandry. So what does that teach us? The boundaries of the Internet industry are relatively blurred, the business environment changes very quickly, and it is more of an exploration and innovation nature, and it is difficult to define clear business results. Compared with the Internet, the traditional industrial structure is relatively stable, the impact of environmental changes is not too great, and it is completely feasible to use KPIs for strategic implementation and evaluation incentives.
Does the business choose whether to use OKRs or KPIs? The basis for the selection can be based on the following three criteria:
Condition 1: Application scenario. If the industry in which the enterprise is located changes rapidly, is greatly affected by the external environment, or develops new business, or is in a period of strategic transformation, the future development is ambiguous, and it takes a period of trial and error to verify, OKR is a suitable choice; If it is a mature industry and the industry structure has not changed much, then it is better to use KPIs.
Condition 2: Management Basics. If the company has not established a performance management system, it is best not to use OKRs, because it is easy to use OKRs as a performance appraisal tool like KPIs, rather than a continuous communication and feedback tool, and it will be wrong to use them. Enterprises have a certain management foundation, know the pros and cons of OKR and KPI, understand the relationship between the two and the similarities and differences, and can identify and learn from them, so they can make their own flexible choices.
Condition 3: Cultural atmosphere. If the enterprise is a control and obedience culture, it does not need too much communication and discussion, emphasizes fast execution and efficiency, and applies KPIs better; If the organizational structure is relatively flat, requires a lot of continuous communication and feedback, and emphasizes collective intelligence, then OKRs are a better choice.
In short, whether it is OKR or KPI, we must understand the connotation and essence behind the tool, rather than the same thing, the so-called "my medicine, his arsenic", how can there be a magic weapon of all tests, some are just continuous action, make mistakes, improve, and then act, make mistakes again, and then improve,......, and finally management can be improved.
Also, don't deify OKR, OKR is by no means a new thing, management master Drucker published in 1954 "The Practice of Management" Chapter 11 "The Spirit of Organization", full of chapters are talking about OKR, the essence of OKR is very thorough, I recommend you to read it. For the vast majority of Chinese enterprises, the important thing is not how to use OKR, but to do a good job in KPI-based performance management, KPI is the most basic management tool, strategy landing, team management, and evaluation of people need to be achieved by KPI, OKR is just icing on the cake, KPI is the charcoal in the snow.
KPI is the core of performance, and all management actions should be designed and improved around KPIs.
Previous Articles:
Performance Exercise 1: What does a standard performance appraisal form contain?
Performance Exercise 2: How to Design the Structure of KPIs?
Performance Exercise 3: How to Design Hit the Nail on the Nail on the Eye KPIs? - Take the recruitment post as an example
Performance Exercise 4: How to Set the Criteria for Measuring Performance Indicators?
Performance Exercise 5: How to Set the Weights of Performance Indicators?
Performance 6th exercise: performance appraisal data is not good, what should I do?
Performance 7th exercise: to score the performance of subordinates, what mistakes are easy to be made by superiors
Performance Exercise 8: Three-scenario solution for ranking performance results
Performance Exercise 9: Is Performance Outcome Important, or Performance Process?
Performance 10th exercise: Is the purpose of performance design to achieve performance, or to distinguish talents?
The 11th practice of performance: the three important things of the mid-year performance inventory, and the inventory of people and opportunities
Performance Exercise 12: How can performance design both distinguish talents and ensure fairness?
Performance Exercise 13: Is Performance Fulfillment Important, or Process Management Important?
Performance 14th exercise: how to evaluate the functional departments of enterprises?
Performance Exercise 15: Five Common Misalignments in Performance Cognition
Performance Exercise 16: What should employees do if they think that the goal is unreasonable and are unwilling to accept the high goal?
Performance 17th exercise: Only by understanding the performance culture can we gain insight into the essence of performance
