Organizational Performance Measurement

Introduction

Adaptive profiles, as measured at GRI, indicate how individuals function and how their environment influences their ability to adapt, engage, and perform. Once aggregated, these profiles also illustrate the overall behavior of a team, department, or company. They help identify organizational weaknesses by considering not only the organization’s internal requirements, but also its industry and market needs, and the various adaptive profiles of its stakeholders. This article explains how strategic and social performance indicators are built and used in conjunction with other, more traditional indicators.

Construction of Performance Indicators

The unique properties of the adaptive profiles enable a precise understanding of people’s performance in context. Two key properties of their metrics are incorporated into the construction of performance indicators that can then be used at a group level. In summary, they are the following:

• Property 1: Adaptive profiles effectively indicate the level of individuals' involvement, engagement, and effectiveness within their environment. Low adaptation combined with high engagement suggests that people are in roles that align with their values, expectations, interests, and social behavior preferences. Conversely, high adaptation and low engagement indicate disengagement, demotivation, and negative emotions among individuals in their roles. These levels of adaptation and engagement reflect either a mismatch between a person’s social behavior values and their position, or ineffective personal development.
• Property 2: Adaptive profiles, including their factors, scales, indicators, and profiles, offer a detailed view of people’s performance, encompassing social behaviors, values, preferences, styles, interests, and more. This view is based on both how people behave and how they think and feel about those social behaviors. Our best estimate at GRI is that the profiles capture up to 90% of people’s social behaviors across the short, medium, and long term. The intensity of these behaviors is influenced by Property 1 above. As a result, we not only gain a better understanding of how people function but also when their social behaviors are likely to be expressed.

Strategic Performance Indicators

In fact, people consistently exhibit measurable social behaviors, preferences, and values. On the other hand, positions also have behavioral requirements that reflect the choices of the organization and its stakeholders. If the organization, its management, shareholders, pressure groups, etc., want efforts to be focused in a particular direction and in a relatively consistent and uniform manner, then this should occur. Conversely, if this is not the case, it suggests that management and recruitment efforts are not meeting their goals: behaviors are out of alignment with the objectives.

By comparing actual behaviors of individuals with desired behaviors at the position level, the organization can assess and manage the relationship between actors' behaviors and the organization’s needs, using the same behavioral dimensions. In practice, the difference can be measured between the behaviors described by the PBI (Position Behavior Indicator) profiles of positions and the actual behaviors of people, as shown in the Effective graph of the GRI adaptive profile. The gap between these indicates which actions should be taken to maximize the effectiveness of social behavior 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—highlighted by the adaptive profiles—shape how the organization functions. They involve decisions that are hard to reverse at the highest levels of hierarchy. The measurement of strategic performance is operationalized as the variable 'iopstra' (the Objective 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 may require efforts that create tension and reduce commitment, as noted in property 1 above.

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

Economic Performance Indicators

Performance beyond the strategic and social performance outlined earlier is classified as economic performance. This includes aspects related to finance, production, marketing, sales, and customer relations. It covers the three dimensions of Kaplan and Norton's balanced scorecard: financial, customer, internal processes, and innovation, along with part of the fourth dimension, learning and growth. As long as the indicators are outside the performance measures listed in the strategic and social indicators above, they fall within the scope of economic performance. Absenteeism and staff turnover rates, which can be translated into costs, are also included among economic performance criteria.

Economic performance indicators should be broken down into as many indicators as needed, depending on the context. The measurement of economic performance is represented by the variable 'iopecon' (the Objective Indicator of Economic Performance).

Types of performance

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

Depending on how the economic, social, and strategic performance indicators 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) optimal and pending, (2) lagging, (3) under pressure, or (4) lack of performance.

Optimal 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 'optimal 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 'lagging 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 indicator '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 social behavior more aligned with the strategy, but the economic objectives have not yet been achieved.

This scenario is categorized under the first 'optimal performance' as a special case. The organization is awaiting economic outcomes while avoiding adverse effects on 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 adaptive profiles are less aligned with the strategy; the economic results are also lacking. 'iopecon' is not reached, 'iopsoc' is down, 'iopstra' is down.

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

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

Deployment of the Measures

The adaptive profiles show how people perform best and how they adjust to their environment. The development of the two indicators 'iopstra' and 'iopsoc' reflects the organization's overall performance at the strategic and social levels.

• The indicator 'iopsoc' measures how stakeholders’ satisfaction and involvement evolve over time.
• The indicator '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 tracks the development of the two indicators 'iopsta' and 'iopsoc' over time, aligning as closely as possible with where the measures are applied: at the individual level with the adaptive profile and at the management level responsible for executing the strategy.

Given the rapid pace of change and organizational complexity, it is essential to reduce non-performance, as indicated by the indicators 'iopstra' and 'iopsoc'. It’s unrealistic to expect that all stakeholders' adaptive profiles will perfectly align with the expectations of their roles, as reflected in the strategic performance indicator ‘iopstra’, or that all social performance indicators will reach their maximum levels, as shown by the social performance indicator ‘iopsoc’.

Excessive adaptation and disengagement, which come with negative emotions, are undesirable. As management research shows, providing feedback to team members and training for managers helps both parties take ownership of the measures.

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