Organizational Performance - Its Measurement

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GRI adaptive profiles evaluate how individuals perform and behave, as well as how their environment influences their ability to adapt and engage. These profiles also illustrate the overall behavior of a team, department, or organization. They help identify organizational weaknesses or operational issues by considering market needs, internal requirements, and the adaptive profiles of various stakeholders.

Construction of Performance Indicators

The unique properties of GRI’s metrics allow a precise understanding of people’s performance in context. Two important properties of those metrics are included in the construction of performance indicators that can then be used at a group level. In summary, they are the following:

• Property 1: GRI’s metrics provide a valid indication of the involvement, engagement, and effectiveness of people within their environment. Little adaptation and high engagement indicate that people are in positions that match their values, expectations, interests, and behavioral preferences. High adaptation and low engagement reveal disengagement, demotivation, and negative emotions of people in their positions. The adaptation and engagement indicate either a misfit between people’s behavioral values and those of their positions or ineffective personal development.
• Property 2: GRI’s metrics with their factors, scales, indicators, graphs, etc., provide a nuanced indication of people’s performance, including their behaviors, values, preferences, styles, interests, and more, anchored on behaviors as well as on how people think and feel about those behaviors. Our best estimate at GRI is that the profiles cover up to 90% of people’s behaviors in the short, medium, and long term. The intensity of the behaviors is moderated by the effects of Property 1 above. Consequently, not only is a better understanding of behaviors available, but also the probable interval within which they will be expressed.

Strategic Performance Indicators

In fact, people consistently show specific social behaviors, preferences, and values that can be measured.

On the other hand, positions also have their behavioral requirements, which express the choices of the organization and its stakeholders. It is logical to think that if the organization, its management, shareholders, pressure groups, etc., want efforts to be focused in a certain way, direction, and in a relatively consistent and uniform manner, then this should actually happen. Conversely, if this is not the case, it suggests that the efforts in management and selection are not meeting their goals: behaviors are out of sync with the objectives.

By comparing actual behaviors of people with the desired behaviors at the position level, the organization can assess and manage the relationship between the behaviors of its actors and the organization’s needs, based on the same behavioral dimensions. In practice, the difference can be measured between the behaviors described by the PBI (Position Behavior Indicator) profiles of the positions and the actual people’s behaviors, as shown in the Effective graph of the GRI profile. The gap between these indicates what actions should be taken to maximize behavioral effectiveness at each position.

This performance is called strategic because understanding how to do things across all positions at every level is crucial when setting goals, planning, and controlling. The ways of selecting personnel, implementing processes, innovating, managing change, taking risks, defending, and gaining market share—all highlighted by the adaptive profiles—affect how the organization functions. They involve decisions that are hard to reverse at the highest levels of hierarchy. The measurement of strategic performance is then identified by a variable called 'iopstrat' (as the Indicator of Strategic Performance).

Social Performance Indicators

The measures of adaptation and engagement enable us to evaluate the gap between what might be deemed satisfactory from an organizational perspective, whether agreed upon by stakeholders or not, and what manifests at the individual level in terms of personal effectiveness. The organization may desire certain behaviors, but these behaviors might require efforts that cause tension and reduce commitment, as mentioned in property 1 above.

This performance is referred to as social performance. It reflects consideration of people's expectations and values, a good match between job profiles and personal profiles, a positive understanding of individual differences by management, self-awareness of employees regarding their capacities and talents, and proper adjustment of compensation and reward systems. The measure of social performance is then represented by a variable called 'iopsoc' (similar to the Objective Index of Social Performance).

Economic Performance Indicators

Performance other than the strategic and social performance defined above is categorized under the label of economic performance. Economic performance includes aspects related to finance, production, marketing and sales, and customer relations. It covers the three dimensions of Kaplan and Norton's balanced scorecard: financial, customer, internal processes, and innovation; as well as part of the fourth dimension of learning and growth. As long as the indicators are outside the performance measures presented in the strategic and social indices above, they remain within the scope of economic performance. The absenteeism rate and staff turnover rate, which can be translated into costs, are also included in the economic performance criteria.

Economic performance indicators should be broken down into as many indicators as necessary, depending on the situation. The measurement of economic performance is then represented by a variable called 'iopecon' (the Objective Economic Performance Index).

Indicators Calculation

The strategic performance ('iopstra') and social performance ('iopsoc') indices are calculated from individual adaptive profiles and expectations in positions (PBI) and teams (TBI).

Once the individual profiles are available and the position and team expectations are set, the differences are calculated between the various Natural profiles and the position or team profiles on one hand, and between the Natural and Role profiles on the other hand. Calculations are made from the profiles: The more similar the profiles are, the smaller the deviations; the more different the profiles are, the greater the deviations. Calculations of the deviations for different people of the same teams, departments, or company are integrated into the strategic and social performance indices..

Type of performances

Depending on how the economic, social, and strategic performance indices change during the analysis period, we can draw the following conclusions about performance. Different combinations of variables tracked over time lead to four possible outcomes: (1) ideal and pending, (2) lagging, (3) under pressure, or (4) lack of performance.

Ideal Performance

If the three indicators of social ('iopsoc'), strategic ('iopstra'), and economic ('iopecon') performance all improve positively over the period considered, we can refer to this as 'ideal performance'. This indicates that people are more satisfied and engaged, that roles in the organization are aligned with the strategy in the short and medium/long term, and that economic goals are met.

'iopsoc' is rising and 'iopstra' is rising, 'iopecon' is reached.

Lagging Performance

If only economic and social performance improve, one might conclude there is a 'shifted performance.' This indicates that people are more engaged and satisfied, economic goals are met, but job roles are not filled as originally planned.

It is very likely that there is a selection issue. 'iopsoc' is rising, 'iopstra' is falling, 'iopecon' is reached.

Performance Under Pressure

If only strategic and economic performance show positive changes, we can conclude that overall performance is under pressure. This indicates that economic performance has improved, aligning people's adaptive profiles more closely with job profiles, but at the same time, people are experiencing more stress, lower motivation, and less engagement. It is likely there are issues with people management.

The index 'iopsoc' is decreasing, 'iopstra' is increasing, and 'iopecon' has been reached.

Pending Performance

If only the social and strategic performances improve positively, we can classify this as a 'pending performance.' This indicates that people are more engaged and satisfied, with behavioral traits more aligned with the strategy, but the economic objectives have not yet been achieved.

This scenario is categorized under the first 'ideal performance' as a special case. The organization is waiting for economic results, but without this negatively impacting stakeholders. The economic objectives might not have been realistic, yet the organization remains committed. 'iopsoc' is up, 'iopstra' is up, 'iopecon' is not achieved.

Lack of performance

If the economic, social, and strategic performances all declined, we can conclude that there is a lack of performance. People are less involved; the qdqptive profiles are less aligned with the strategy; the economic results are also lacking. 'iopecon' is not reached, 'iopsoc' is down, 'iopstra' is down.

Recap

The following table summarizes the four possible results for performance values:

	Ideal Performance (and on hold)	Lagging Performance	Performance Under Pressure	Lack of Performance
Economic performance iopecon	Achieved (or to be achieved)	Achieved	Achieved	Not Achieved
Social performance iopsoc	Increase ↗	Increase ↗	Decrease ↘	Decrease ↘
Strategic performance iopstra	Increase ↗	Decrease ↘	Increase ↗	Decrease ↘

The adaptive profiles reflect how people best perform and their adjustments to the environment. The evolution of the two indicators 'iopstra' and 'iopsoc' reflects an idea of ​​the general performance of the organization on the strategic and social level:

• The index 'iopsoc' measures how stakeholders’ satisfaction and involvement evolve over time.
• The index 'iopstra' measures how the strategy is reached as set with the TBI indicators for the teams, departments, and the organization.

The profiles enable performance measurement that closely follows the development of the two indices 'iopsta' and 'iopsoc' over time, aligning as much as possible with where the measures are applied: at the level of the individuals with the adaptive profile and at the management level responsible for executing the strategy.

Given the rapid pace of change and complexity in organizations, it is important to minimize non-performance, as indicated by the metrics 'iopstra' and 'iopsoc'. It’s unrealistic to expect that all stakeholders' profiles perfectly match the expectations of their roles, as reflected in the strategic performance index iopstra, or that all social performance indices reach their maximum values, as indicated by the social performance index. Excessive adaptation and disengagement, which can lead to negative emotions, are not desirable. As shown in management research, feedback to team members and training for managers help both parties take ownership of these measures.

Decentralizing the adaptive profiles to operations enables the implementation of strategy as close as possible to where decisions are made and actions are taken, ensuring that measures and information best benefit the organization and its members at various levels of hierarchy. When integrated into performance reviews, these measures motivate teams and facilitate organizational change. Ultimately, individual and unit-level measures can be incorporated into a management control system to ensure that performance targets are achieved.