Don’t confuse performance with productivity

Work Dynamics’s executive consulting psychologist Tanja Nicholls presented at the recent Leading Strategic HR Transformation conference held at the Palazzo Hotel in Fourways, Johannesburg.

The conference theme was about HR playing a strategic rather than a support role in corporate. Tanja addressed the delegates on Measuring Performance and Productivity.

The conclusions presented by Tanja were:

  • Managing and measuring performance and productivity offers a closed loop control system that can be linked to HR interventions such as rewards, promotions, succession planning and more
  • The presence of metrics leads to higher effort thus enhancing productivity and performance
  • Enhancing the above ensures a high performing individual, high performing team and ultimately a high performing organisation

It was however important to start by clarifying the difference between productivity and performance.

“People tend to confuse productivity and performance, with the two often becoming interchangeable. Productivity is the measure of the efficiency of production whereas performance deals with the way in which someone functions to accomplish something successfully,” says Tanja.

As productivity and performance have operational and economic implications for a company, these should be defined and associated “norms” created before being built into KPAs and KPIs.

Tanja went on to highlight the benefits of fair and accurate appraisals, amongst others:

  • Improved employee utilisation and retention
  • A high performance culture
  • High levels of motivation and job satisfaction
  • Improved communication between manager and employee
  • Identification of rewards or implementation of sanctions

The various measurement methods were also presented and discussed, including the Forced Distribution Method, Critical Incident Method, Weighted Checklist Method, Paired Comparison Method, Group Rating Scale, Management by Objectives and the 360 Degree Review.

Tanja also discussed the process that should be followed and stressed that practises needed to be reliable, valid, relevant and practical.

“Managing and improving performance and productivity effectively is an area that elevates HR from being a support function to a strategic partner of a company. We’re impacting on individuals and groups taking responsibility for organisational goals and building high performance individuals, teams and organisations.”