On a Timely Basis

I was reviewing goal statements, part of the homework requirements in our "Managing for Results" program, when I ran across a goal involved with reducing production losses (to increase yield). The goal statement was fairly good as was the specific measure of performance. But my eyebrows went up when I saw the frequency of performance measure: quarterly!

The purpose of work effort performance measurement is to identify deficiencies and, more importantly, to take corrective action to get performance back on track. The longer you wait to take performance measures, the greater the chance that the costs of the errors will mount up. And the longer you wait to check performance, the greater the chance that the cause of the deficiency will remain hidden.

For example, say you measure productivity and quality performance weekly. You do it on Monday morning for the previous week. During your weekly check, you run across a job that was way off in productivity. The job was started last Tuesday and complete last Wednesday. You now attempt to investigate what happened. Unless the situation was extraordinary, what's the chances of anyone specifically remembering what went wrong on a job completed almost a week ago? Indeed, how many of us have trouble remembering what we did yesterday? Yet if productivity performance was measured daily, the deficiency would have been identified on Wednesday. Investigating it then would give you a much greater chance of identifying causes. More importantly, if the job is still in process you could take corrective actions as well. If instead of daily performance measurement you tracked performance hourly, you could have acted on the deficiency even sooner.

So...should performance be tracked on a daily basis? Or hourly? Or even by the minute? Not necessarily. The frequency of performance measurement depends on the nature of the work. And the correct frequency of performance measurement involves a trade off between the cost of short cycle measurement versus the risk of long cycle measurement. The more frequently you measure performance, the more it costs you to measure that performance, but the less risk you'll have of higher costs due to non-conforming performance. Conversely, the less frequently you measure performance the lower the costs of measuring performance, but with a corresponding higher risk of greater costs associated non-conforming performance as well a possible restricting impact on cause identification that can lead to corrective action efforts.

Some jobs, especially long term projects, can be comfortably measured weekly and on occasion even monthly. Other jobs lend themselves to weekly, or daily or hourly measurement. Indeed, companies with a continuous manufacturing process or with high volume-short cycle-low margin jobs may find that immediate and continuous measurement is even more appropriate.

The answer for each of us is to choose a performance measurement cycle that creates the best balance between the costs and risks associated with different measurement frequencies.

About Pelleyblog: Pelleyblog is designed to be a resource for supervisors and other first line managers. Currently most of our readers are from Rhode Island (RI), Central Massachusetts (MA) and Eastern Connecticut (CT). But everyone interested in management topics is welcome. We also welcome your participation. Feel free to comment on this or any other post.

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