Recently, a friend of mine bought a device for me called a Fitbit. A Fitbit measures the number of steps you take, the distance you walk in a day, the flights of stairs you walk, the amount of sleep you get, and several other things. One of the features of the product is sharing – you can share all of those stats between your friends. I am in decent shape and exercise quite often, so I was excited to get the Fitbit and demolish my friend (all in fun of course)! There is nothing like some good competition to motivate people! Even though I already exercised, I noticed that the Fitbit changed my behavior. Every morning, I now pass the elevator to walk the three flights of stairs to my office. The old saying, “What gets measured gets done” is very true. Because the Fitbit was measuring my flights of stairs, I started climbing them.
The same is true in business. Whatever metrics you measure your employees with, will be what they strive to increase. With the desired end goal in mind, figure out which metrics you will want to use. For example, if you want to encourage speed for your counter guys, then measure the number of new contracts opened each day. If you want to encourage dollars, measure the average contract sum. For different employees, there will be different metrics. For a mechanic, it will most likely relate with the number of repairs or number of hours. For a salesperson, it will be associated with the gross revenue generated. However, you should think of the goal through all aspects, not just the successful way.
You will want to think through your metrics from a negative side as well. Remember the saying, what gets measured gets done. Consider which undesired effects could happen if the metric is achieved. For example, when we had our rental stores, we came up with a bonus plan for our general manager. The bonus was based on the measurement of gross revenue. How could that have a negative side you might ask? Well, the manager hired twice as many employees. Since his measurement had nothing to do with expenses, he didn’t care about them. We subsequently modified the bonus to be based on average revenue per hour worked. He now had two components that he could affect: increase revenue or decrease employee hours.
Once you have determined what you are measuring, make the formula easy. If the formula is too complicated, it won’t be clear what the desired outcome is, or there will be too many factors to figure out how to positively affect the outcome. Also, make the metric transparent. If the employees feel that you are doing something underhanded on the metrics, it will work only to demotivate. Finally, make sure the employees know that you are serious about the metric. Show them that you are paying attention to the measurements whether they are up or down. The accountability that brings to the metric will be the biggest motivator.
So, if you are looking to increase your physical activity, get yourself a Fitbit. It is easy to use, transparent for your friends to see, and holds you accountable to do it. If you are looking to increase your employee’s productivity, pick some metrics and start measuring!