Performance equation

What's result, what's performance, how can you manage it and does HR really help?

Difference between Result and Performance
Let's first distinguish between Result and Performance, simply stated:

Performance = Result / Potential

However, after setting the goals (i.e. the expected Results) the Potential (maximal Result that can be achieved) will almost certainly change due to all kind of changing external, non controllable or non influenceable, circumstances.

Performance related rewards and agreements should therefore always be made for different Potential-scenario's (bandwidth).

Board members, directors, employees, colleagues, friends, our kids, in short 'the contractor', should always be judged and rewarded on their actual performance and not on the results.
One of the main questions in this process is: Can the contractor control or influence the Potential?

Example
You committed to sell 100 books this year, being 0,1% of the national book market (Potential = 0,1% x 100.000 = 100)

Potential	Result	Performance
100	100	100%
50	75	150%
200	150	75%

From this it's clear that if national book sales (potential) would slink to 50%, selling 75 books results in a 150% performance. You would have done a great job, given the Circumstances!
The reverse, of course, is also true.

Performance: rule of thumb
On a personal level, Performance could - as rule of thumb - be defined as:

What you get done
=
[What you have]
x
[What you do with it]
x
[When, Where and How you do it]

Research done by John Purcell, Boxall and others, based on original marketing research of Jaworski(1989), show that successful firms have better people and better processes.

It seems that High Performing Organizations create success based on three pillars:

• Human Capital Advantage (HCA)
  
• Organization Process Advantage (OPA)
  
• Organization Citizenship behaviour (OCB)

The AMO model
Professional people management is vital in creating these advantages.

Research and practise led to the development of the so called AMO Model.

P = f (A, M, O)

With P = Performance, A = Ability, M = Motivation and O = Opportunity.

Simply said,people perform well when:

• they are able to do so
  
• they have the motivation to do so
  
• their (work) environment supports and stimulates them

Although the relationship (e.g. covariance, etc.) between the AMO elements (A, M,O) can be complex, it's clear that if one of them is zero, the Performance itself will also be zero. That's why the AMO equation is sometimes simplified as:

P = A x M x O

The performance equation
Another similar development by Douglas Peters led to "The Performance Equation":

P = At * ([ K + S ]/ ER)

Where P=performance, At=Attitude, K=Knowledge, S=Skills and ER= Environmental Roadblocks.
Peters sets Attitude in place of Motivation, combines Skills and Knowledge in Ability and defines ER as negative (opposite) aspect of Opportunity

Motivation revealed
Motivation is one of the most important drivers behind High performance.

Let's dig in to the several aspects of Motivation. Motivation has been analyzed by Victor Vroom. Vroom's Expectancy Theory (1964) is based upon the following three beliefs:

• Valence
  The employee's defined (outcome) value of extrinsic rewards [money, promotion, time-off, benefits] or intrinsic rewards [satisfaction].
  
• Expectancy
  The employee's confidence end expectation of what they are capable of doing.
  
• Instrumentality
  The perception of employees whether they will actually get what they desire even if it has been promised by a manager.

Vroom states that these three aspects interact psychologically to create a motivational force such that the employee acts in ways that bring pleasure and avoid pain.

So according Vroom Motivation could be defined as:

M = E x I x V

Or in words, Motivation =

• Expectancy: Perceived Probability of Success x
  
• Instrumentality: Connection of Success and Reward x
• Valence: Value of Obtaining Goal

Opportunity
Opportunity can be seen as everything in the environment that is necessary, supports, helps or sometimes blocks (negative opportunity) the performance of the contractor.
Charlie Cook defines Opportunities as Resources.

In fact Opportunities could be defined as:

O = R x H x C

With O = Opportunity, R = Resources, H = Help or support, C = Circumstances

Just to demonstrate: If you planned a BBQ and got enough meat (R) and matches (H), but it's raining cats and dogs (C), it's not what you would call a big opportunity.

Wrapping up
Wrapping up all Insights, Performance could be defined as:

P = A x M x O = S . K . E . I . V . R . H . C

With: S=Skills, K=Knowledge, E=Expectancy,I=Instrumentality, V=Valence, R=Resources, H=Help or support and C=Circumstances

Remember Performance is everywhere, not only in business.
Success in performing!

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The Collapse of Chaos in your life

Perhaps you think that if you have a consistent life-philosophy, your control your life and no great changes will take place?
Well,




you're probably wrong !
Even if we act in a stable consistent way, we keep interfering with our environment and our environment responses to us.

At first this response seems meaningless and of no value. You think you're consequent and your work and achievements in life seem relatively stable, perhaps a little bit chaotic and of no great significance. But in repeating the right things endlessly





Something will change
This change often will not appear as an evolution in your life, but as a kind of revolution, suddenly and most often unexpected.
Fore example, when you study, you'll probably once in a while think: what progress am I making?

But don't worry, if you keep on your track, there'll be a day your future suddenly comes to you (out of the blue: as a kind of emergent property) instead of "the you trying to make your future" in this Game of Life.







A good demonstration of this principle is

Langton's ant Langton's ant is an virtual ant that starts out on a grid containing black and white cells, and then follows the following set of rules. If the ant is on a black square, it turns right 90° and moves forward one unit. If the ant is on a white square, it turns left 90° and moves forward one unit. When the ant leaves a square, it inverts the color. The result is a quite complicated and apparently chaotic, but relatively stable, motion. But after about 10.000 moves the ant starts to build a broad diagonal "highway".

So keep on your track and wait for



The collapse of chaos in your life

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Trust or distrust?

Without trust you can't live. It's "the" basic element in politics, business, management, friendship, love and life.









Now, trust is not an easy subject.

For example:

• Research showed that women and men both lie about three times every 15 minutes in a simple conversation.
• The average credibility of a CEO in western countries is below 30%.
• Only just 40% finds it (very) easy to trust an accountant.

So you could ask yourself,






What is Trust?

There can be no trust unless you give it first.
And even with someone you fully trust, you'll have to cope with distrust.
If you think you won't.. Just the fact you consciously decided to trust someone, means that you implicitly considered the theoretical possibility that he or she could betray your trust. So distrust was on your table. Not considering distrust is naive or even risky and will in most cases end in a disappointment.

Let's look at some properties of these trust relationships:

Trust relationships:

• are bipolar : Trust and Distrust
• include ambivalence: Degrees of [dis]trust, Simultaneous trust and distrust
• are multifaceted: We can both trust and distrust the same person in different contexts

Trust relationships are also two dimensional:




Let's look at how you can manage trust and distrust in the same relationship.




From this matrix we may conclude the next rules of thumb:

• 'Just' managing distrust, won't bring more trust.
• If there is not enough trust, trying to manage distrust will escalate and lead to apathy and frustration. Once you're in this position, your relationship gets 'locked' and the both of you won't be able to manage your trust anymore.
• Always start managing trust first.
  In a situation with "low distrust" by giving 'more freedom', 'stimulating each other' and 'creating happy moments'.
  In a situation with "high distrust" first by 'creating rules' and 'agreements' and (re)gain confidence in each other.

That's not all folks! It's just the start. Trust me.

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Green & Clean

One of the most impressive stories that illustrate the principles of management and delegation is given by Stephen Covey in his fantastic book called The 7 Habits of Highly Effective People .

In this story called Green and Clean he illustrates four general principles that are important when you divide tasks. Wetter this is in your family or at your job. Wetter you're the boss or the employee. These principles lead to success!

Green & Clean
We were having a family meeting to divide the tasks in our family. My seven-year-old son, Stephen, volunteered to take care of the yard. Before I actually gave him a job, I took him next door to our neighbor's. "Look, son," I said. "See how our neighbor's yard is green and clean? That's what we're after: green and clean.	Set Target Set simple targets in a few words that everyone understand. No difficult or pagewide target definitions.
"Now before you decide whether or not you're going to take the job, let me tell you a few more things. Because when you take the job, I don't do it anymore. It's your job. I trust you to do the job, to get it done. Now who's going to be your boss?" "You, Dad?" "No, not me. You're the boss."	Define responsibility Delegate and clearly define the responsibility and mandate at the right level. Cut of dependent behavior.
"Now, guess who your helper is." "Who?" "I am," I said. "You boss me." "You tell me how I can help." "I'll do anything you want me to do."	Offer help Only after the target is set and the responsibility is defined: start helping Don't start helping in an earlier state. Otherwise things will end up in a mess.
Two weeks went and nothing happened. The yard was going down the drain. As I rounded the corner, I saw my son at the park across the street playing. I faked a smile and yelled across the street, "How's the yard coming?" Then we walked around the yard together. His chin began to quiver and tears welled up in his eyes.	Accept failure Delegating is a process. Accept that you don't succeed at once. Keep patience. Stand up as many times as necessary.
Than he finally asked for help. I helped him two or three more times that entire summer. After that, he himself took care of that yard . He kept it greener and cleaner than it had ever been.	Success Final Acceptance and taking responsibility. Using the above principles finally leads to the success you both wanted.

Covey is no narrow-minded or soft management-guru. On his website he states:

Human beings are not things needing to be motivated and controlled

They are four dimensional
body, mind, heart, and spirit

Dr. Stephen R. Covey
The 8th Habit
From Effectiveness to Greatness

As you see, the principles are all based on constructive communication.

Apply these simple principles everywhere and things will become a lot simpler in life.

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Everything under control?

Why is it we always have to control things?
Of course you need a certain amount of control to achieve your goals.
But too much control limits your creativity and output.

This is perfectly demonstrated by a quote of the famous Formula 1 driver Mario Andretti

If everything seems under control,
you're just not going fast enough !



So one of the secrets in life is to determine the right amount of control.

Control plays an important role in our life, as is demonstrated in the next quotes

Control Quotes Meeting you was fate, becoming your friend was a choice, but falling in love with you I had no control over You cannot control what happens to you, but you can control your attitude toward what happens to you If you don't control your mind, someone else will Self-disciplined begins with the mastery of your thoughts. If you don't control what you think, you can't control what you do The secret of success is learning how to use pain and pleasure instead of having pain and pleasure use you. If you do that, you're in control of your life. If you don't, life controls you. No one is in control of your happiness but you; therefore, you have the power to change anything about yourself or your life that you want to change

So, control your life but not too much !

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We're all experts!

Ever heard of the Dunning Kruger Effect (DKE)?

DKE is simply said:

Novices overestimate their performance,
Experts underestimate their performance.

According to nobel prize winners Dunning & Kruger (1999), people tend to hold overly favorable views of their abilities and performance.

This overestimation mainly occurs when people are unskilled (novices: +500% overestimation !).


Novices (unskilled) have a dual burden:

• They reach erroneous conclusions and make unfortunate choices
  
• Their incompetence robs them of the metacognitive ability to realize this

This also explains why self-assessments often fail. In general people are thinking they're really doing a great job.

According to Krajč & Ortmann (2007), the bad judgements (metacognity inability) that leads to flawed self-assessments, could be better explained as 'unbiased judgements based on biased information'.

Highly skilled people, the experts, suffer from the opposite. They tend to underestimate (10%) their performance.

However it's been proved that feedback, training and making people conscious of DKE, reduces the effect.

Just look around, DKE is omni-present:

• We're all sports experts (soccer, golf, darts)
  
• We all know how to raise kids
  
• Most employees have a 'common sense' opinion about marketing, branding, HR
• We're all employee and family coaches
  
• We all understand the risks of war, nuclear power, skiing

So teach and be aware of what you really know, develop (your skills) in what you would want to know, get help an get sight on what you'll never know, be open to feedback and don't forget to enjoy life in the meantime.

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How high can you reach?

How high can you reach? What's your ultimate altitude?

With respect to what Jesse Jackson or Donald Trump are saying about that, I state that




Aptitude + Attitude = Altitude






In other words: the level that you reach is a combination of your natural given talents (aptitude) and your attitude.

To raise your altitude, you'll have to change and improve your attitude by learning.

This "learning" is well demonstrated by the English language trainer, Sreenadhachary, at a workshop on the "Importance of English Language in M.N.C.s".
Sreenadhachary trains Indian man and woman in learning English with simple principles:

• A positive frame of mind and learning from mistakes are both needed to improve
• Good learners make mistakes unknowingly and correct themselves knowingly
• The glory lies not in avoiding a fall but in getting up every time you fall down

Sreenadhachary uses several other techniques to achieve that job aspirants improve their accent and try to speak English in the way an Englishman does.

However one general rule could be added:




"To Speak English", "Think English"

In fact this rule could be generally applied to an higher altitude and new principle or formula:



"To XXX YYY", "Think as YYY"

Where you could substitute for XXX verbs like "help", "fight", etc.
For YYY you could substitute all kind of nouns like "English", "your best friend", "God", "your enemy", etc.

By substituting different verbs verbs for XXX, you'll first conclude that it doesn't apply, but on a deeper thinking-level you'll grasp it, learn from it and know what to do.




A nice application of this Zen-like-thinking is a Sun Tzu like quote like:



To beat your enemy, think like your enemy

Be sure not to mesh up with the pitfall that "thinking like" is the same as "becoming-like".
By "thinking like thousand different people", you don't become like one of them, they'll all enrich you on your path, YOU !

However.. see what happens if you substitute "Think" by "Be" or "Become like" (i.e. "to beat your enemy, become your enemy"). Dare you?

Remember, it's your decision to change your attitude and to decide to make this day a beautiful day

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Test Drive Paradox

Does a test drive help, selling a car?

Let's take a look at what could be called the 'test drive paradox'!

Test drive paradox

• E-factor :
  The longer the test drive, the higher the closing rate
  This is the Emotional factor. The longer you sit in the driver's seat, touch the car's interior, the more you're subconsciously convincing yourself that this car is yours. This is effect is called "taking mental ownership".
  


• R-factor :
  The longer the test drive, the lower the closing rate
This is the Rational factor. The longer the test drive, the more chance you'll discover vehicle problems or things you don't like.

Of course also the opposite is also possible: You discover more positive things and the closing rates increases. But because car buyers, on average, tend to be very critical and focussed on finding shortfalls, negativity wins on the long term.

In practice it's the initial state of a potential buyer that determines the change of the closing ratio during a test drive.

Let's distinguish two types of buyers:

• Buyer type: Enthusiastic
  This type is superenthusiastic. He loves the car, no matter what. In fact he doesn't need a test drive at all.
  During a test ride he might become even more enthusiastic. The E-factor certainly applies here, but has done his work before the test drive. Only with extreme long test drives there's a risk (R-Factor) of lower closing rates concerning 'this' car..


• Buyer type:Neutral
  For this buyer type a test drive makes sense. A well trained car seller or a free 24 hour test car could do miracles. In any case it's the art of right timing to end the test drive and close the deal.
  After this moment, closing rates dramatically go down.

Although perhaps tempting, don't apply 'car test driving' and closing rates on relationships or marriage. Don't take your partner for a test drive.

Just keep in mind that in every situation, something that is a mild distraction on a short test drive, it is likely to be infuriating on a long-distance trip.

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