Based on my observations of thousands of RESULTS.com clients working on their goals, here are my recommendations for how to set up your Metric performance thresholds and how to interpret each color:
Red = Unacceptable level of performance. Sound the alarm! We need to take action to fix this score as soon as possible.
Any number that is “in the red” must be discussed at the next applicable meeting with the manager asking the goal owner, “What’s happening here?”
Work together with the goal owner to come up with tangible actions to address the poor performance, and capture them as Tasks. Follow up next week to make sure these Tasks got done, and assess their impact on performance.
Yellow = Anything inbetween the red and green scores. Yes, we can keep the lights on and we can keep our jobs, but we are not happy yet. We need to keep a close eye on this number to make sure everything is OK and to ensure it is tracking in the right direction.
Green = Target level of performance. We expect the goal owner to achieve this level of performance most of the time.
My rule of thumb, is “A good person, doing a good job, should hit the green level of performance 90% of the time”.
In essence, a competent, well-trained person doing an honest week’s work (i.e. they are not a slacker), should be able to achieve the “green” performance standard for their role 9 times out of 10. If not, the bar is probably set too high.
In my experience, many managers tend to set the green performance thresholds too high, thinking that this will motivate their people, when in practice it can tend to have the opposite effect. What typically happens is when your “good” people don’t think they can achieve the expected level of performance with a reasonable amount of effort, they quickly become discouraged and demotivated. Their failure is staring at them on the software dashboard every day. All they can see is “red”, and using this to shame them into better performance not an effective way to engage your people.
Research on employee motivation has shown that it is better to set relevant and achievable Goals, get everyone used to “winning”, and then gradually raise the performance bar over time. Employees are strongly motivated by seeing progress, so it really helps when you make progress visible on their dashboard, and praise and acknowledge them for their “small wins” every step of the way.
For more information, see our management training courses to learn our best practices for setting up and managing Metrics, Projects and Tasks.
Head of Strategy and Consulting