The Ascent Group, Inc.

Improving Front-line Performance

Motivation, Measurement and Discipline

An Extract from Improving Front-line Performance, a new research report published by the Ascent Group, Inc.

Measuring performance is fundamental to management control of any organization, yet many organizations do not have a program in place for reviewing, selecting, and deploying performance measures. As a result, departments often operate with a haphazard collection of inherited, uncoordinated, and often irrelevant performance measures. This leads to problems—wasteful utilization of resources can go undetected for long periods of time, important activities may be overlooked, objectives may not be achieved, and actions to correct deficiencies often attack symptoms instead of problems.

To correct this, managers must recognize performance management as a basic organizational need and a fundamental managerial responsibility. Before control can take place, it is necessary to have some system of measurement. On the other hand, measurement itself is of little value unless it is used as the basis for control. Ultimately though, the success of any organization is dependent upon the people that make up the organization. It is the responsibility of management to ensure that the right people are in the right jobs and that they are engaged and empowered. Performance measurement is a tool to assist management with that responsibility.

Most performance measurement efforts focus on doing things well, assuming that the department or organization is already providing the right products, services, and support to its customers. Often, performance measurement focuses exclusively on group activities and not the products or services that they provide. In a good system, the focus should be on a set of measures that answer the following questions:

• Are we providing the correct services to our clients?
• Are we providing those services in the best possible way?

Many organizations have not recently inventoried the products and services that they provide. Many have not discussed them with their customers or the departments and functions that rely upon them. Consequently, there is a great need to go back and review the functions of the department in order to ensure that the right products and services are being provided.

Once major services have been determined, objectives should be identified for the delivery of the services. Objectives are general statements about directions the company or department intends to take. They usually don’t contain any specific targets or dates. Objectives should consider:

• What are we trying to accomplish with our products or services?
• Where are we going in the future?

Goals can then be established to support the mission and objectives. The goals defined should be strategic, tactical, and operational, depending on the level of management that is being supported. They may include definition of quantity, quality, timeliness, resource utilization, or customer satisfaction.

Once goals have been defined, identify the key results areas where results must be achieved if goals are to be obtained. These key results areas are critical success factors (CSFs). CSFs must be achievable, controllable, and measurable. In most organizations there are usually three to six factors that determine success. CSFs point to areas that should receive constant and careful attention from management. The current status of performance in each area should be continually measured and scrutinized. CSFs differ from company to company and from department to department.

Performance measures should be selected to support strategy, objectives, goals, and critical success factors. Performance measures are specific standards that allow the calibration of performance as related to CSFs, goals, and objectives. Measures can be either subjective and qualitative (soft measures) or objective and quantitative (hard measures). Performance measures are used to evaluate how well the delivery system is performing and to ensure that the correct products and services are still being provided.

The overall goal of a performance reporting system is to provide information on departmental resources and products and services that will encourage management intervention and result in improved efficiency and effectiveness. Information is provided to management concerning the attainment of corporate-wide (strategic) goals and objectives as well as feedback on departmental (operational) goals and objectives. Positive and negative feedback can be a powerful tool for improving performance, accomplished through correctly administered performance measures.

Identifying current performance levels can help a work group develop a plan and specific improvement objectives. Performance results are reported which give management the opportunity to intervene and improve performance. Improvements in efficiency, quality, and service can be expected.

As organizations change, missions, end products, activities, critical success factors, and performance measures should be reassessed and realigned to ensure appropriateness. The orientation towards service, coupled with the performance-reporting tool and supporting performance management philosophies will guarantee that the correct services are being provided in the best possible way.

A performance reporting system provides information for various levels of management that can be used to track progress and provide wisdom for refinement of action plans. Identifying current performance levels can help a work group develop a plan and specific improvement objectives. Meaningful objectives can be established from data on current performance.

A performance measurement system also provides data that will allow a work group to evaluate alternative methods of achieving its service objectives. Without a good performance measurement system, it is difficult to demonstrate the success of departmental alternatives or strategies. Measurement data can tell the group not only whether the objective was achieved, but also which strategy worked best. Performance measurement information then, facilitates the ongoing evaluation of products/services so critical to a performance management program.

Benchmark Study of Front-line Performance

With all this in mind, the Ascent Group conducted research in first quarter 2009 to better understand the performance measurement and management of front-line customer service employees. The main objective of the study was to identify “best practices” for performance measurement, rewards and incentives, and disciplinary approaches. Secondary objectives included understanding:

• What are they key customer service metrics in place?
• What are the key attributes of a successful customer-facing employee?
• How are customer service standards established?
• What awards (monetary or other-wise) are in place to reward desired customer service behaviors and attitudes?
• How is discipline handled?
• Determining employee satisfaction
• Measuring customer satisfaction with front-line employees
• Techniques for helping employees deal with stress
• Motivational techniques

Participants were also asked to share management tactics and strategies, as well as identify any improvement in performance. The study also asked companies to include considerations, successes, and plans moving forward. The result of this effort is captured in our report, Improving Front-line Performance 2009.

Study Findings

Participants listed quality as the most frequently tracked customer service metric for front-line employees. Attendance and Schedule Adherence also figured prominently in the list of key metrics, as did productivity. Surprisingly, customer satisfaction was only measured by slightly more than half of participants (56 percent). First call resolution is used by 38 percent of participants, as a metric of front-line employee performance..

The majority of participants rely on a “balanced scorecard” approach to measuring front-line customer service performance (55 percent). Assessments, including self-assessments, are used by smaller percentage of participants (35 and 29 percent, respectively). Management by Objectives, Free-form Performance Appraisals, employee rankings, and 360-degree appraisals are used much less frequently for the front-line.

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