Does Your Team Measure Up?

It's easy to understand the impact incorrectly measuring a job can have on production - wasted materials, time and labor speak directly to the bottom line. The same is true when you incorrectly measure (or do not measure at all) the job performance, skill capacity and productivity of your employees. In the end, you cost yourself a lot of money with bad hires and underperformers.

But the systems and structures needed to measure job performance aren't as obvious or as easy to use as a measuring tape. Subjective, personal factors tend to cloud evaluation. How long has this person been with me? Does she have a great attitude? Does he keep at it even when he fails? However, you dilute the relevance of employee reviews by relying on subjective accounts rather than results based on business goals.

Metrics - quantitative goals assigned to individuals and company departments - give you the information to make job-performance evaluations effective and consistent across the board. Metrics are all about tying performance to a standard that can be documented and measured.

Some remodelers who take this approach use sophisticated software and technology to calculate data, and some rely on handwritten logs and verbal reports. Despite these differences, the stumbling blocks and, ultimately, the benefits remain constant.

You will experience turnover in the beginning, maybe losing some of your most senior, dedicated staff. You will have to share at least some financial information. You will have to pull out of the day-to-day operations and move away from micromanagement. You and your employees will take on more responsibility as you analyze the data. Managers will have to work hard to reward people for what they do correctly rather than just telling employees what they do wrong.

But getting past the stumbling blocks brings great benefits.

Bring employees on board

Imagine being at a company for less than a year, and you're known as the person who's changing everything.

Only eight months into her human resources position with The Bainbridge Crew, Gina Curcuru is experiencing the backlash and bewilderment that can come when employees realize they're under the microscope. In her short tenure at Bainbridge, Curcuru (who came from a corporate background where "everything was performance-based") has insisted on getting more performance data and moving away from annual reviews to individual meetings that look at performance every 30 days.

She introduced Performance Now, a software package that allows employees and their managers to enter daily logs.

In addition to analyzing these logs, Curcuru and The Bainbridge Crew's five department managers analyze weekly job-costing printouts and then make relevant notes in each individual's Performance Now file.

The fallout was almost immediate.

"Some people haven't fared well with the changes, people who have been here for years and been really comfortable in their niches," Curcuru says, acknowledging that the company did lose people. "But the rest of the crew has really embraced it. They feel like we're investing time in them."

Investing in employees is imperative to helping them adjust to the job-performance microscope. At Bainbridge, that has included bimonthly half-day workshops led by an outside consultant, covering topics such as embracing change, synergy team building and conflict resolution. Curcuru also says Bainbridge has started to focus more on nonmonetary perks, such as giving MVP awards and recognizing each employee's important life events at a monthly event called Toot Your Horn. Coupled with these things, the increased frequency of performance reviews has taken away the trepidation associated with the process, she says, making reviews times to talk about the work rather than just raises.

In addition, good-natured peer pressure has helped reinforce the team atmosphere. Bainbridge, in addition to Sutton, cited mentoring (pairing a high performer with someone who might be lagging) as a great way to increase productivity. And while some employees complain about the increased paperwork and time commitment that come with collecting data, the result is worth the frustration.

"Measures reinforce the team ethic of the remodeling industry because you have to look inward," Curcuru says. "We were giving people the tools, but we weren't aligning our goals so people could understand how what they do affects the entire company. And while employees may not like all feedback they get, they prefer having it. I think they feel like they're part of a long-term plan here rather than being cogs in the wheel."

Review the results, then act on them

Collecting data is useless if you don't use what you collect. When shifting to a metrics approach, it's essential that you use the data in forecasting the company's future. This requires time and a shift in management style and focus.

On Wednesdays, Michael Sutton receives seven direct summary reports on departmental metrics from each department's manager. (This is consistent with the other interviewees, who also devote about one day per week to looking at the numbers. They found that any larger time commitment could become cumbersome.) About every three months, Sutton redrafts the metrics, saying about half require re-evaluation and redefinition. Without a set-aside time for analysis, he wouldn't know this.

Sutton, like many business owners, struggled with the notion of giving financial information to employees. Would they understand it? Would they believe the information or think that no matter what the boss says, he's really getting more money than he's admitting?

Yet without giving employees information to understand what the metrics mean, it's hard to hold them accountable. Sutton saw that the company's "corporate mentality" of keeping information secret was detrimental to job performance. So he removed himself from daily functions of the business, opened his books and closed his mouth. Now he says he spends 90% of his time managing the managers and looking at company trends.

"If I trust these guys to walk into someone's home unsupervised, I should be able to show them basic mathematics and tell them this is how their job performance is rated," he says. "I think that fear held us back for two years. To my surprise, there were people who actually wanted to meet those goals, and the workers started sharing helpful information with management that we would have never heard otherwise.

"In the end, I had to shut up and listen. It's easy to tell somebody how to do a job, but it's more difficult to let them do the job themselves and let them take responsibility for its outcome."

You cannot hold employees to a higher level of accountability and then fail to follow through on honoring their needs or negate their influence when they expect changes to be made. On the other hand, be ready to act when an employee fails to meet goals. At Sutton, underperformers are given two warnings, one written and one verbal, and an offer to undergo training to help them improve their scores. Termination is not the immediate option, but the workers understand that if they don't continually meet the goals, they will be looking for another job.

"Good employees will give this system a shot, but if you are not consistent and don't follow up the information with action, you'll lose them," Sutton says. "Sometimes it's just a matter of people not being trained well, and as an employer, we sometimes lose track of our role in getting people to the point where they can succeed."

To help foster accountability, Sutton introduced a board of advisers composed of elected representatives from the field, administration, management and sales. The board meets monthly to work on company issues, identify problems and offer solutions. It empowers the members to serve as liaisons to their peers, and knowing how they measure up helps the staff serve the company mission. "As an owner and manager, these measures give you the ability to make logical decisions," Sutton says. "Without these numbers, I'd have to manage on a micro level and ignore looking at the larger picture, like trends or how to set myself apart from competition."

Make metrics part of the culture

Many people think numbers are not fun. They don't like analyzing data, either, especially when their job is to produce, not study. Shifting to a paradigm of assessing job performance with metrics can be tricky because numbers are absolutes; there is no gray area, no room for interpretation. Employees have three options: to exceed, meet or fail to reach expectations. If you're not careful, such strict conditions can breed a culture of negativity and fear within your company.

Patrick Condon recognized the necessity of maintaining a human element in review when his company switched to metrics. Even though metrics aim to remove subjectivity from the evaluation process, they can turn evaluations into tough, sometimes disheartening conversations. Condon says managers must find a way to lighten up the workplace.

He does this with a simple game. Each quarter, different company goals are highlighted in elaborate display cases within each department, and a payout is assigned to each metric. If workers meet or exceed those numbers, the entire company gets a bonus; however, the average customer satisfaction survey score must be 8.5 out of 10, with an 85% return rate, to receive the payout. In the second quarter this year, Condon paid out $41,000 (after tax) in bonuses to his 21 employees. Every employee gets the same bonus. If the company meets the top end of its goals each quarter, each employee can earn $16,000 in bonuses annually.

"In general, people want to be part of a winning team," Condon says. "It's my job to create an exciting field of play for my employees. As managers, we can't blame people for not buying in if we don't make it fun."

With the bonus game in place, Condon does not tie the results of job-performance evaluations to an employee's salary. The company has parties and events at the end of each quarter to celebrate successes and get revved up for the next quarter. Before metrics, when Condon wasn't looking at numbers regularly, these successes (and failures) might have gone unnoticed, and issues would not be addressed promptly, as they are now.

"The company is better off financially for the measures," Condon says. "We are so much more productive. The cost of not doing it, - and I've been there before - is having this aimless company that doesn't know where it's going, what it's doing, and people don't understand where they stand. It's really unfair to let people be on the team and not know where they stand."

The numbers, Condon contends, serve as a tool for promoting ethical and equal treatment of employees. No high-performance team functions without respect for its members and confidence in its ability to succeed, both within the group and from managers. In an increasingly competitive job market, giving employees the tools to see unequivocally how they're faring in their positions just might be the right thing to do.