The Big Picture: Understanding Performance Systems in Organizations

1
The Big Picture Understanding Performance
Systems in Organizations

• Cloyd Hyten, Ph.D., CPT
• Eagle Performance Improvement Consultants
• Department of Behavior Analysis
• University of North Texas

2
Acknowledgments

• Thanks to the following people
• Bellann Morales, CFO of client firm
• EPIC students at UNT involved with firm
• Meeta Chhabra, Melanie Porter, Joe Cermak, Nadia
  Jamai, Justin Acciavatti, Keith Williams,
  Kathleen Bailey, Bryan Shelton, David Mallari,
  Sarah McDaniel, Kristen Whitford

3
The Identity Crisis

• Are we about Behavior Change or Performance
  Improvement?
• Behavior Counts? Yes, but Results Matter!
• Can we produce sustainable improvements in
  results?
• Can improve results through focusing on behavior
  change directly (as in BBSafety)
• Based on Applied Behavior Analysis
• Or indirectly including behavior change when
  focusing on
• Performance Systems (with heavy results emphasis)

4
The Identity Crisis (cont.)

• Applied Behavior Analysis is not a sufficient
  model for OBM
• Context yes, but limited to ABC, plus MO,
  history.
• ABA Focus on BOI, not enough on repertoire
  (behavior system)
• ABA about behavior of individuals, not about
  organizational effectiveness. Insufficient from
  the start!
• So, differing approaches to discipline differing
  professional identities
• Can we be both?

5
Why not Systems View?

• Some Behavior Analysts annoyed because systems
  tops behavior analysis
• Behavior not the direct focus
• Behavior seems to disappear in systems model. I
  have argued in a 2002 BAT article that need to
  highlight behavior of managers in designing and
  adjusting system as the main behavior element.
• Systems theory is more generic and generally
  applicable to all things
• It was hard enough just to learn behavior
  dynamics, now we have to learn systems dynamics?
  Damn.

6
Why not Systems View?

• Technical Issues Systems views lead to focus on
  processes
• Good to understand performance in light of
  horizontal work flow
• Conflicting advice on measurement systems
• Horizontal and Vertical emphases reconcilable?
• PR Issues Do systems models complicate things?
• Rummler Super-system model is a lot to explain
• Business world always looking for non-technical
  models
• Screw it- lets be technical!

7
Benefits of Systems Views

• Fills in the framework of the business picture
• Consider interaction of Performers not just with
  their local contingencies
• But with product/service of company, managers,
  customers, upstream downstream departments,
  mission goals, marketplace, competition,
  resources equipment
• Explicit in Systems models of Brethower and
  Rummler
• Helps you understand your clients needs better

8
Benefits of Systems Views

• Helps you do Performance Improvement better, but
  how?
• Consider how the existing entire Performance
  System will interact with your performance
  problem and its local solution
• What is the Performance System?
• The following graphic illustrates this, but it
  should have interconnecting arrows between all
  the system elements, too.

9
Performance System Elements
10
Performance System Interactions

• Example 1 Core Process Re-Design
• Organization Accounting Firm
• Problem Tax Department Profitability below goal
• Analysis Process mapping to look for disconnects
• Several problems
• client info hard to get, plus authority to
  contact client restricted
• throughput strained during busy season
• multiple review cycles adding time and dollars to
  bill
• all returns, regardless of difficulty, went
  through the same process of assignment, prep,
  review

11
Performance System Interactions

• Local Solution
• Separate processes for simple and complex returns
• Simple returns through streamlined process, with
  work handled by lower-level accountants with
  lower billing rates, reviewed by next highest
  level.
• Revisions made and passed on for signing, not
  returned for revision and another review cycle.
• Results
• Costs of preparing simple returns decreased
• Billing percentage increased
• higher profits
• (with no detrimental effect on rest of
  department)

12
Performance System Interactions

• Why did this work so well?
• Compatible aligned with existing Performance
  System
• No new training required work assignment simply
  changed
• Major Interacting System Compensation
• Performance Pay Plan recently installed that
  incented higher realization ( of work done that
  gets billed)
• Staff and Seniors could rack up hours with simple
  returns Managers could work on more complex
  returns, and Partners could bill more of work
  done

13
Performance System Interactions

• Example 2 Performance Pay Plan itself
• Staff Senior production (charge hours)
  emphasis
• Manager Sr. Mgr Less production, but added
  realization, developing book of business, success
  of department
• Scorecards on results indexed to department
  profitability determine objective bonus pay
  (other part from subjective ratings)- described
  in detail in ABA 2003 symposium
• Some bonus pay could be taken as time off
• Feedback monthly payouts twice a year

14
Performance System Interactions

• Problem A Staff Senior Accountant production
  dropping
• Analysis Overcapacity, among others
• Major Interacting System Hiring
• Hiring practices continued unchanged
• Overcapacity seen as good for potential growth,
  when it actually harmed production
• New Partners hired who didnt bring in enough
  work
• Systems Modifications
• CFO developed a Leverage Model for optimum
  staffing
• More scrutiny in hiring new Partners to insure
  they could bring the business

15
Performance System Interactions

• Problem B Senior Mgrs scorecards too low
• Analysis Book of Business development poor
• Major Interacting Systems Training, Partner
  Comp, Marketing
• No training offered.
• Partner Compensation Plan did not reward
  development of Sr. Mgr client ownership
• Systems Modifications
• Hired New Trainer
• New Marketing Person hired to promote individual
  business development aligned with the firms
  long-term interest.
• New Partner Scorecards being developed.

16
Conclusions

• Defining Property of Systems evident in
  Performance Improvement efforts
• Intervening in a system will affect the rest of
  the system
• Those interactions may be compatible and aligned
  with how the Performance System is operating
• Or, they may expose weaknesses in the Performance
  System that require adjustment
• Some interactions can be predicted, but cant
  always make rapid changes and prevent all trouble
• Political influences/support often a barrier
• Takes time to ramp up other changes

17
Conclusions

• Clearly, all these efforts included behavior
  change
• But, they were not behavior-focused like
  conventional Applied Behavior Analysis
• What were doing is building and modifying
  Performance Systems
• OBM is not just Applied Behavior Analysis done in
  Organizations
• No escaping the power utility of systems views