Sometimes I think performance management is invading my personal life. A student I have been mentoring happily announced during one of our recent meetings that she had gotten a 46 on her latest algebra quiz. I’m no math major but normally any score under 60 is a failing grade. How could she be so pleased with her performance?
Not wanting to spoil her celebration, I mulled the puzzle over in private until a possible answer occurred to me. My mentee had reported her actual performance to me without also telling me the target performance. Presumably, she had gotten a 46 (actual) out of total possible value of 50 (target). Everyone in the class knew this additional information and thus were domain experts. As an outsider, I lacked this context – leading to my confusion.
Pleased with having figured this out, I privately speculated the teacher could have avoided this communication problem by reporting scores based on percentage attainment, rather than the raw number correct. 92% is much more understandable than 46. I would have recognized instantly recognized it as good performance.
Unfortunately, my sense of satisfaction came to abrupt end when my mentee explained the total possible score was 100. And she was pleased with a 46 out of 100. It took several more minutes of questions but I eventually unearthed the explanation. It turns out that her 46 was the third best performance out of a class of 60 students. Apparently the test had been too hard so the teacher had decided to grade on a curve. Her 46 was an ‘A’.
Performance management provides language to deal with taking tests. Normally we assume that actual performance must be very close to target performance to warrant a high grade. In classrooms, 90% and above is usually an ‘A’. Said another way, the gap between actual and target must be less than 10% to earn the highest grade. In the case of my mentee’s quiz, the gap could be much larger.
Understanding the size of this gap ends up being one of the most important things you can do when communicating performance. If you are a newspaper printer and decide to use defect percentage as one of your measures to track operational efficiency, it might be reasonable to set a target of zero defects but be willing to assign a high grade if 5% of a production run contains printing defects. On the other hand, if you manufacture airplane engines, even a 1% defect rate is probably unacceptable. Two different organizations using the same measure with the same target but with completely different notions of the acceptable size of the gap.
At 15 my mentee isn’t thinking about performance management. Instead, it’s who her friends are, whether she’ll make the soccer team, and what she’s going to wear to the dance on Saturday night. Recently, when bragging to me about her corner kicking skills, she said something like, “My city league team scored on 8 out of 20 or so kicks I took last year. That may not seem like much but most teams would only score 4 or 5 times out of 20.”
I smiled. Target, actual, gap. Performance management is everywhere.
Isn’t the conclusion rather that in real life, any fixed target (and the gap size) is likely to be arbitrary and irrelevant to measuring performance? What your mentee is saying in both cases is that relative success is all she cares about….
To me, this is the essence of true performance management. It does not track activities but rather outcomes — “relative success” in your words. Formally, I recommend three things: actual (measured value at a specific moment in time), target (desired value at the same moment in time), and a grading system (apriori method of judging the difference between the actual and target). In particular, grading systems are not well defined in most situations. More information here: http://jonathanbecher.com/2010/09/27/quick-guide-to-performance-management/
The better way to communicate performance is to use percentile. Where 99 percentile would be the person performing at top of the class. However, problem becomes much more complex in business environment. Specially when you are ranking team of consultant who have worked on varying projects. A person receiving excellent grading in easy project would come ahead of person receiving good on complex project.