3 min read

Measuring Performance: What Yardstick Are You Using?

In my career, I have interviewed and hired scores of job candidates. One of those interviews, 15 years ago, was a revelation to me. At the time I was working in the performance measurement business for the agriculture industry (today I do similar work in forestry and energy industries), and that interview helped solidify everything I believe about performance measures. In that interview, a young computer programmer sat across the desk from me, eager to prove himself. His responses were the alphabet soup of jargon that is typical in any conversation with an information technology professional. He described the languages he knew, the applications he worked on, the insanely long hours he was used to working, and then he said two things that really caught my attention. First, he said he was the only computer programmer who worked for his current employer. Then he added that he was good at his job.

So I asked him THE QUESTION: the question I was sure the candidate did not have a practiced answer for, the question that reveals something about the candidate besides how many interview how-to books they have read. I asked, “So, you don’t really know if you are doing a good job then, do you?”

If the term “anger management” had already been coined then, I hadn’t heard it yet. But I clearly saw someone who needed anger management lessons that day! This young man literally came out of his chair. He put both hands flat on my desk, leaned across it (which gratefully was big enough that our noses didn’t touch) and asked with a certain edge to his voice, “What do you mean?” I admit I was a little startled, but pressed on. “If you are the only programmer there, how do you know if you are doing a good job?” I asked.

And this is why the guy got the job. All of the tension left his voice; he sat back down and thought a few seconds and said “That’s a really good question!” I waited, and then he responded “Everyone there from the receptionist to the CEO has complimented me on the job I do, and I don’t get paged in the middle of the night to fix problems anymore. I work more on planned changes and a lot less on fixing problems than when I started.” (This was 15 years ago, so I am paraphrasing, but that captures the gist of his answer.)

It was a job winning answer. Why? While the best measure of performance was not available to the candidate – no other programmer was there to read and evaluate the quality of his code – he was willing and able to find a suitable proxy; his boss’s opinion and the lack of emergencies – two really good proxies.

Fifteen years later, I use to the same approach to measuring my performance and the performance of my staff. We find the right yardstick and we assess our performance against it on a regular basis. So now, I ask you the same question: “How do you know if you are doing a good job?” If you don’t know how you are being measured, you should find out. There is always a measure, some better than others to be sure, but one thing is certain, everyone with a job is measured. Stake holders are very interested to know how well you do your job: your boss, stockholders, and your company’s banker, to name a few. And your grade is very much dependent on the yardstick they use. If you have the skills to do your job, then the more accurate the yardstick, the better you will measure up.

Let’s examine a simplistic example. There are two sales professionals. With a nod to Saturday Night Live, let’s call them Pat Smith and Pat Jones. The name of the contest: who is the better salesperson? You are the judge.

Pat and Pat sell into different markets. Smith sold $100,000 more this week than last; Jones sold $50,000 more this week. Who is performing better?

Last week, Smith sold $1,000,000 and this week sold the same number of units for $1,100,000; Jones sold $300,000 last week and this week sold the same number of units for $350,000. Who is performing better?

Market price in Smith’s market went down 8% this week over last week; in Jones’s market, prices are up 33% this week over last week. Who is performing better?

As this example demonstrates, identifying the yardstick has to be the first step in measuring performance. At Forest2Market, we’ve been developing industry standard yardsticks since 2000; we’ve been aggregating market transaction data to accurately describe market performance and finding a proper measure of performance provides a better yardstick, for you and all others with a stake in your performance and personal success.

You are going to be measured. Finding a yardstick that is credible, accurate, and consistent is in your best interest.

Now, back to Pat and Pat. Tell me, who do you think is the better performing salesperson and why?


Comments

Nathan Poorman

10-03-2011

I believe Jones is the winner here.  He has a 17% increase in sales vs. Smith who has a 10% increase.  Even with the 33% market price increase for Jones vs. 8% in Smith’s market, Jones ends up with a 2% advantage over Smith with a market price adjusted increase in sales of 11% vs. Smith’s 9%.


Comments

Chris Kirkland

10-06-2011

In this economy they are both winners!