Why We Use Data to Evaluate Performance

Business. Sports. Cars. What do they have in common?

We measure performance in each one.

And performance, whether we’re talking about a business, baseball team, or car, is one of those things that lends itself to very different perceptions depending on the seats that we sit in or the place that we’re observing it from. In simple terms, our own biases lead to subjectivity.

Here’s an example of subjectivity in evaluating performance. If you’re coming from a Ferrari, a Honda Accord may feel slow. However, if you’re coming from a bicycle, that Honda will feel blazing fast. However, feel is subjective. But acceleration and speed are not – no matter what vehicle you’re coming from, the acceleration and speed of the Honda are identical. That is where data comes in.

A systematic use of data can remove subjectivity – or feel – from the evaluation of performance almost entirely.

This allows us to objectively measure performance and, ultimately, make better decisions – whether it’s which program your organization should invest in, which pitcher your favorite baseball team should start, or which car you should buy.

Choosing the Right Metrics to Measure Performance

Whether we’re talking about individual or organizational performance, the first question I, as an analyst, ask is “What performance do you want?” For example, let’s look at individual performance. Attempting to evaluate whether or not an individual is successful in performing a role is fraught with subjectivity and perceived judgment of the person being evaluated. If we can define success in the role though, as the performance of specific tasks and functions in particular ways; then we are able to add objectivity and rigor to the evaluation methodology, while also reframing the exercise and conversation in a more productive way. Before we even start talking about data and metrics, we have to focus our attention on which behaviors or actions are most indicative of someone performing the role’s functions well.

Once we have established that baseline, then we can ask the next question: “How do we measure that?” Frequently, defining the behaviors or actions that we wish to see points us directly to the data that is required and the types of measurement that are best suited to the metric’s use (absolute change, rate, percentage, exceeding a threshold, etc.). Knowing how these behaviors or actions are performed also often points us to a tool that is being used and the opportunities that it provides to automate the tracking process.

With the framework in place, we can perform an initial analysis of the “As Is” state and use it to establish a benchmark that we’ll measure from. Then, over time, whether we want to see more or less of those actions or events, we can measure that behavior. Setting that benchmark around chosen metrics also helps eliminate some of the scariness that comes with evaluating performance with data. What I’ve found working with a range of people in groups on this topic is that once you mention performance measurement and tracking performance with data, the people in the organization you’re wanting to track immediately feel threatened. If somebody walks in and says, “I need to start capturing data on your performance,” anxiety is an entirely understandable reaction. However, framing current performance as a benchmark and not a judgment removes some of the inherent threat. Instead of an indictment, it’s simply a definition of “As Is”, or where we are now; as opposed to the definition of “To Be”, or where we want to go.

Ensuring the Data Used to Evaluate Performance is Accurate and Reliable

Accurate performance evaluation requires accurate data. While there are best practices to follow, the ultimate goal is to eliminate subjectivity, erroneous thinking, and false conclusions. The best way to ensure data fidelity is to automate whatever you can. This removes subjectivity along with areas where human entry can innocently enough create errors. Where automation is not possible, it is critical to create a systematic process designed ahead of time for data capture and tracking and then enforcing that process.

Here is where I would be remiss in not mentioning The Clearing’s expertise in helping organizations evaluate performance using data. In client engagements, we’re not only measuring the performance metrics desired by our clients but our own performance. We find this helps us create more successful outcomes and drives continual improvement in service delivery.

If you or your organization wants to take a more systematic approach to evaluating performance, we would love to be your partner in developing that process. Contact us anytime here – we look forward to chatting.