Key Performance Indicators
The attributes of a good KPI are it is specific, measurable, achievable, relevant, and timely (SMART). The US government shows precisely what YBIA is referring to: Writing SMART Objectives
Next on the agenda is establishing the frequency. The “T” in SMART does not just refer to the period in which the goal is to be accomplished; it also refers to the time period during which YOU (or the supervisor) measure it. There’s no point in establishing what the ideal heart flow rate should be if no one is going to take the blood pressure. Let us help keep your blood pressure in the healthy range and Your Business is Alive!
The biggest takeaway for this is if it’s not being measured, the probability of it being improved is slim… whatever “it” or whomever “it” may be. In this area of expertise, YBIA re-defines the performance indicators for key people.
The Key Performance Indicators show how healthy the business is/is not and they also serve as the basis for job creation. With each job formation, there is a job decription. Each job description ties back to the KPIs plus outlines prequalifications, reporting, and responsibilities. Prequalifications include, but are not limited to the following:
- education (level and area of study),
- experience levels,
- physical abilities (e.g., ability to lift 50#), and
Reporting portion of the job description refers to these two components:
- who the individual will report to and
- how many people will be reporting to the individual.
If your candidate has little to no experience in writing performance appraisals, then perhaps it is time to seriously consider the impact hiring (s)he will have on the business. Lastly, it's crucial to identify the expectations the individual is expected to do. This is the bulk of the writing and requires the most amount of effort.
Incentives and Rewards
You’ve developed the KPIs and job descriptions, the last agenda item related to organizational behavior is incentives and rewards. One crucial thing that must be true is that incentives and rewards are warrantied. If your company promises X, Y or Z, then when those goals are met, it must deliver. It all sounds reasonable, but YBIA wouldn’t be saying that if it hadn’t read countless “anonymous written surveys” indicating otherwise. Feedback from your staff is that there was a communication breakdown in what was promised, what was expected -- i.e., the KPIs were not aligned and/or administered properly.
Having said that, the fringe benefits are of a variety pack. They can consist of monetary rewards to "parking spot of the parking lot" to most industrious team shift award. If your company doesn’t ask what its employees would see as a reward, then you’re dealing in different currencies. Why give me a dollar when what I’m looking for is to be recognized at a company function? It also has to be cohesively implemented, and it needs to start with senior management because what senior management does makes Your Business is Alive!
The New Salesperson Story
In a small agricultural town, a new salesperson was hired with a base pay was $40K plus a low commission. The median income for this location at that time was $32,616. Other salespersons were easily making twice what this person was. However, who’s getting shorted here? We haven’t asked what the commission was / sales $ brought in. As it turned out, the new salesperson was making six times what the veterans were with only six sales in six months, none in the last three months. In other words, for each sales $ brought in, Because he was on salary, the new salesperson was making six times what his counterparts were. Remember, Your Business is Alive! asks many questions.
What were his connections to the farming community? Where did he live? What did he know about planters? Farming equipment and repair? Who had trained him? What were the sales meetings like? Who was arranging for these? Of course you see exactly where we’re going with this, and you also see the solution: Formal sales meetings took place. The next year’s agricultural expos and fairs were assigned to specific salespersons. Each salesperson then selected the necessary equipment to showcase. (It is quite an logistical exercise to move heavy machinery the size of your garage!) This was indeed a successful business, and it continues to be ALIVE!
From a Human Resources perspective, the company implemented the $40K base pay phase out period. As time progressed, the new salesperson graduated from a hefty base pay to a base pay of $20K + commission commensurate with his comrades. This could not have been done without the sales meetings and the owners’ willingness to share the planning phases of the upcoming trade shows. Not only is the business more alive, its sales staff is too.