Recently, I did some training with the managers in our business for our new KPIs and the new staff performance management system. This got me reflecting on how dumb our old KPIs were.
SMART, in relation to KPIs, is an acronym that stands for Specific, Measurable, Achievable, Realistic and Time Bound. This can only assess quantitative and objective aspects of performance.
The thing that matters most about staff performance is quality of work—which is qualitative and subjective in nature.
This is all fine, because KPIs are not Key Performance Measures, they are Key Performance Indicators. So we use SMART KPIs to indicate performance, and then discuss qualitative elements of performance with staff.
The problem I've experienced is that all Performance Management software I've seen uses KPIs in a survey-style form, where staff are scored and compared against prior appraisals and against other staff. The KPI becomes the measure of performance, not the indicator. This, is when SMART KPIs start to get dumb, as we modify them to try and account for qualitative aspects of performance through a contrived quantitative paradigm. Every program I have ever used like this has failed our business.
It's taken 15 years to work this out, and to come up with a solution, but in our business we have abandoned off-the-shelf software solutions, and instead created our own process. We have identified KPIs and the qualitative aspects of performance related to each. We have also developed a learning and development pathway, and we use the discussion of qualitative elements of KPIs to identify key learning and personal development priorities on the Learning and Development pathway.