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Performance management systems are really for performance measurement or sometimes; they are tools that are designed to help management improve performance. The crucial component therefore in order to ensure optimal use of these technologies is a managers ability to use them effectively. I continue to be fascinated by many managers’ attitudes towards the usefulness, applicability and efforts to be applied to fully utilize performance measurement tools that their organizations spend hundreds of thousands of dollars to implement. What is more fundamental to the job of management than to continuously find ways to improve the business they are responsible for?
I am reminded of a time when I was speaking with a client about 30 years ago. I asked him why he supported the implementation of our labor management tool so vigorously and he gave me a simple answer, “We have a fiduciary responsibility to do all we can as the management company to improve asset value and therefore we must implement and use these systems if we are to fully live up to our responsibilities.” I realize that in recent years, due to some legal actions between owners and management companies, the legal definition of fiduciary probably does not apply anymore to management agreements, but I am looking more at the moral responsibility one takes on when an organization is retained to manage another’s asset. So I don’t want to enter into a debate about the legal definition. I am simply looking at what an owner can fairly expect when he or she hires a management entity.
There are times I think that management expects performance management systems to tell them exactly what to do, when to do it and they don’t need to spend much time analyzing and using the information presented. Basically, the system will let you run on auto pilot. As an example, we ask managers to ensure their time punch data is correct so a key analysis report that measures productivity performance will be accurate each day, and that at times seems too difficult. So punches are corrected just before payroll is due, and that costs organizations thousands of dollars. As a young manager, before we had automated time systems (I know, I’m showing my age) I was responsible for doing my time cards at the end of my shift to ensure they were correct each day. Now with full automation, and systems that tell us where punches are wrong, management will not invest the time to ensure daily accuracy, which leads to bad information or to put it another way, garbage in, garbage out. And this is just one example.
Another is it may take one minute each day to ensure an interface that moves information between two systems is accomplished. This information is key to yield management, productivity measurement and improved forecasting, but it still can’t get done. And this one minute of time is used as a reason to not use systems that improve value when applied properly. There are other examples.
On the other side of the coin there are managers who still see that fiduciary responsibility and go out of their way to use these performance measurement systems and tools to learn, teach and improve. I am reminded of a recent conversation with a resident manager who told me of sitting with his chef to review the last three months of performance and to demonstrate that there were further opportunities to control labor costs. The performance measurement system made the review easy, quick and pointed to the improvement opportunities without a whole lot of research. And, with the data analysis, the chef agreed and is working on the next enhancement to his operation.
In summary, no matter what system you are using it takes effort to get the most out of it. It takes a clear understanding of the results you can get by using the system compared to the time invested to ensure that the information is of a sufficient quality to be useful. Five minutes of work each day is worth $500,000 a year of improvement. Managers must better assess the opportunities that are being foregone because of weak reasons for non-compliance with these new systems. As noted, the key to any system is management’s attitude towards utilization and their perception of their moral fiduciary responsibility to drive performance.
Mark Heymann is the President and CEO of UniFocus, a global provider of labor management solutions and employee scheduling software systems.
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