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Managing individual and team performance using metrics that track to the business strategy is not the gold standard - it is the norm in smart companies.

To be successful, performance and compensation management systems need to align with the business strategy by using performance metrics that measure success in meeting the business strategy.

Using a straight-forward performance matrix provides a review of how well a company uses people performance to increase productivity.

First, increased performance is measured by increased productivity.

Second, increased productivity is measured by a single or series of financial or volume measures divided by the number of hours it takes for people to complete work processes.
Performance Measure 1Q 2004 2Q 2004 % Difference
Gross Sales / Total hours worked $38.00 per hour $40.00 per hour (+) 5%
Net Income / Total hours worked $3.50 per hour $3.00 per hour (-) 14%
Net Optg Profit After Taxes / Total hours worked $1.65 per hour $1.58 per hour (-) 4%
Overall Average Gain / Loss in Productivity     (-) 13%

Third, the average gain or loss in productivity is compared to current performance measurement and feedback systems to form a perspective on improvements that are potentially possible.

Fourth, the use of the matrix provides a clear look at financial goals and job specific competencies that, if improved, define positive productivity growth. More about feedback...

Smart organizations have infinite knowledge of methods to reach financial goals and create improved mastery of core competencies.

The HARLON GROUP helps our clients become smarter by clarifying financial performance metrics that, if improved, will increase productivity and identify core job competencies that, if improved, will likewise improve performance.

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Harlon Group PO Box 1929 Broomfield, Colorado 80038 303.910.3704