Imagine a bustling office where traditional productivity metrics reign supreme, where sales numbers, units produced and hours worked are meticulously tracked and analysed. However, amidst the sea of quantitative data, something crucial often gets overlooked—the human factor. For instance, consider a software-development team striving to meet tight deadlines. While their quantitative metrics may show impressive output, it’s the team’s cohesion, creativity and ability to resolve conflicts that truly drives their success.
While processes and infrastructure may have their limitations, the potential for optimisation in the people aspect is virtually boundless. Yet, it remains one of the most underutilised levers in maximising organisational performance.
Traditional productivity metrics, while valuable in assessing tangible outcomes, often falls short in capturing the essence of human performance. As noted by Emmanuel David, senior HR leader, “they are able to take care of the financial or quantitative part, but they often overlook factors related to human creativity, collaboration or innovation.” The relentless focus on individual key result areas (KRAs) fails to account for the collaborative and dynamic nature of modern work environments.
“Traditional productivity metrics, while valuable in assessing tangible outcomes, often falls short in capturing the essence of human performance. They are able to take care of the financial or quantitative part, but they often overlook factors related to human creativity, collaboration or innovation.”
Emmanuel David, senior HR leader
David shares an illuminating anecdote from a visit to the Indian Space Research Organisation (ISRO), underscoring the limitations of individual KRAs in fostering a mission-driven culture. When questioned about individual KRAs, the director emphasised, “To design and develop a rocket takes about 7-10 years, and success or failure is determined in 20 seconds.” Here, the focus shifted from individual metrics to a collective mission-driven approach, highlighting the need for a broader understanding of performance and transcending individual goals in pursuit of shared objectives.
So, what alternative metrics could complement or even surpass traditional measures? The answer lies in embracing a more comprehensive view of performance, one that encompasses not just outcomes but also processes and purpose.
“The evolving nature of work demands a more nuanced approach that acknowledges the qualitative contributions to productivity and performance,” emphasises Pankaj Lochan, CHRO, Navin Fluorine. In today’s dynamic and evolving landscape, where human capital takes centre stage, traditional metrics alone may not suffice as they fall short when it comes to capturing the qualitative aspects of human performance.
“The evolving nature of work demands a more nuanced approach that acknowledges the qualitative contributions to productivity and performance.”
Pankaj Lochan, CHRO, Navin Fluorine
Consider competency scores, for instance. By assessing factors such as managerial competency or employee skill levels, organisations gain insights beyond mere numerical outcomes. Investing in improving these competencies can yield substantial returns in terms of productivity and innovation.
Moreover, while conventional metrics primarily focus on lagging indicators—outcomes that have already occurred—there’s a growing need to emphasise leading indicators that address the underlying causes of performance. For instance, metrics related to skill levels, competency scores, employee satisfaction, innovation projects and conflict resolution can offer insights into the factors driving organisational success.
Additionally, process measures such as learning time, collaborative projects and corporate social responsibility (CSR) involvement offer insights into the human aspect of performance beyond mere productivity. “As the focus on sustainability and corporate social responsibility continues to grow, metrics related to ESG (Environmental, Social, and Governance) practices are becoming increasingly important. Organisations are being called upon to demonstrate their commitment to ethical business practices and social impact, and incorporating these metrics into performance evaluation processes is essential,” enunciates Praveen Purohit, deputy CHRO, Vedanta Resources.
“Organisations must strike a balance between the two, ensuring that both are given equal importance in driving organisational performance and fostering leadership development.”
Praveen Purohit, deputy CHRO, Vedanta Resources
Moreover, integrating meaning and purpose into performance evaluation aligns with the values of the modern workforce. “Millennials and Gen Z are increasingly seeking companies that resonate with their aspirations for creativity, innovation and societal impact. Organisations must adapt by fostering a culture that nurtures these values and aligns them with business objectives,” emphasises David.
However, challenges loom on the horizon, primarily stemming from entrenched mindsets among decision-makers. Bridging the gap between generations and garnering buy-in for alternative metrics requires concerted effort. Leaders must articulate the compelling case for change while highlighting the consequences of inaction.
Balancing quantitative metrics with qualitative contributions presents another hurdle. While conventional metrics offer tangible data, they often overlook intangible factors critical to performance. Hence, to strike a balance, organisations need to adopt a multifaceted approach.
This entails integrating conventional metrics with alternative indicators that reflect the complexities of human performance. Highlighting four key areas to consider, Lochan points out:
First, a manager’s performance can be evaluated not just based on conventional metrics such as numbers per hour but also on qualitative aspects such as team compatibility, cohesion and conflict resolution within the team.
Effective communication channels and grievance redressal mechanisms contribute significantly to organisational performance and should be given due consideration.
The reward and recognition system should be based on a scientific evaluation of individual contributions rather than a quota-based approach, ensuring fairness and motivation.
Lastly, investing in employee training and development not only enhances skills but also demonstrates the organisation’s commitment to its employees, fostering higher engagement and loyalty. “These four aspects, when integrated alongside traditional performance metrics, offer a more holistic view of organisational effectiveness and employee well-being,” emphasises Lochan.
While quantitative metrics provide tangible measures of success, qualitative metrics offer insights into the human aspects of performance that drive long-term success and sustainability. Hence, as Purohit puts it, “Organisations must strike a balance between the two, ensuring that both are given equal importance in driving organisational performance and fostering leadership development. By embracing this holistic approach, organisations can cultivate high-quality talent, strengthen succession planning and drive sustainable growth in today’s dynamic business environment.”
“When there’s a clear alignment with higher purposes and broader societal impacts, individuals tend to exhibit behaviours conducive to achieving those goals,” asserts David. During appraisal periods, the focus typically lies on outcome measures alone. However, incorporating process measures can offer valuable insights. For instance, tracking time spent on learning, involvement in collaborative projects, or engagement in corporate social responsibility (CSR) activities can highlight areas where human discretion and initiative play a significant role.
As human performance takes centre stage, traditional metrics alone may no longer suffice. By integrating meaning and purpose alongside productivity and business outcomes, organisations can create a more meaningful work environment.
