The system of material motivation: KPIs that answer the main question of Life, the Universe and in general
In the previous series, we wrote about the existence of universal KPIs applicable to any employee of a company participating in the value creation process.
Here we will tell about these KPIs.
First, recall the term “balanced scorecard” (balanced scorecard) and pay attention to the word “balanced”.
Which is extremely important, and about which the creators of the SMMP regularly forget. It would be, by the way, to make this sin in the list of mortals
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Where does the importance of balance come from and what is it in practice?
In most cases, the work of an employee of the organization can not be exhaustively described by a single indicator.
For example: if we pay the seller only for sales, then the profit will definitely suffer.
Even if the prices are fixed and the seller cannot give discounts at his own discretion, we recall that in any trade there are goods-locomotives - generating turnover (but with a minimum margin) and attracting buyers, and accessories-goods are small in price, but with high profitability and precisely on which profit is earned.
This dualism is quite universal. So, many people know that networks sell a substantial part of the names of washing machines and mobile phones below cost - generating a margin on installation services and cover-case films, respectively. But few people know that the symbol of a corrupted America - McDonalds - McNuggets cheeseburgers also trades in the negative. Agents of the world behind the scenes earn their billions on french fries and Coca-Cola. The composition of "complex meals" remember?
More details for those interested in http://www.ultimaerp.com/results/purchase_matrix/
In short, in the example with the seller, the sales volume is a very correct indicator, but it alone is not enough.
The KPI “sales volume” needs to be BALANCED to others: for example, profitability. The seller must be motivated to sell not only expensive steam locomotives, but a profitable low-cost coupler.
Ask, and what would be stupid not to motivate the seller to gross profit from sales? Perhaps in a limited number of cases it will be a good solution, but in the realities of a competitive market ... Remember that "locomotives" are sold with a minimum mark-up, and even in minus? Then it is easy to imagine psychiatric cramps that cover the average seller with the realization that if he sells a single TV, his salary will be LESS.
However, even for such cases there are solutions, although not technically simple, we will tell about them in the next series.
Some experience in designing the SMMP led us to conclude that
a) for any productive position (that is, NOT the parasite http://www.ultimaerp.com/results/self_born_worm/ ), there is a pair of mutually balanced calculating KPIs, one of which characterizes the amount of work performed by a person, and the second - quality.
b) the use of this pair of KPIs as the basis of the motivational formula for this position is necessary and sufficient for obtaining the best result.
For convenience of future use, we call this statement the volume-quality axiom (ALC).
Pay attention to the word “base” in paragraph b): other indicators may well participate in the motivational formula, but:
It is easy to notice that our example about the seller’s motivation on the basis of sales volume and KPI of profitability balancing it is a special case of the KLA. The sales volume is the volume of work performed by the seller, profitability is the quality of this work.
All ingenious is simple. AOK is easy and AOK works great.
As practice shows, the main part of practical difficulties is the correct definition of what constitutes a quality indicator for this position (usually, there are no questions with KPIs).
However, such quality indicators always exist . The question is whether the KIS used by you allows them to be collected and processed.
PS A waiter in a restaurant who lives only on tips (or a fraction of them) is an infrequent example where motivation is completely described by a single indicator. This waiter is close to a private entrepreneur.
However, (tm), if we take a closer look at the “indicator” of a tip, we will see that it includes
- volume indicator (usually 5-10% of the total bill),
- and quality - “if you like the service, the service is not included in the bill”. The principle of "pay if you liked . "
Here we will tell about these KPIs.
First, recall the term “balanced scorecard” (balanced scorecard) and pay attention to the word “balanced”.
Which is extremely important, and about which the creators of the SMMP regularly forget. It would be, by the way, to make this sin in the list of mortals
')
Where does the importance of balance come from and what is it in practice?
In most cases, the work of an employee of the organization can not be exhaustively described by a single indicator.
For example: if we pay the seller only for sales, then the profit will definitely suffer.
Even if the prices are fixed and the seller cannot give discounts at his own discretion, we recall that in any trade there are goods-locomotives - generating turnover (but with a minimum margin) and attracting buyers, and accessories-goods are small in price, but with high profitability and precisely on which profit is earned.
This dualism is quite universal. So, many people know that networks sell a substantial part of the names of washing machines and mobile phones below cost - generating a margin on installation services and cover-case films, respectively. But few people know that the symbol of a corrupted America - McDonalds - McNuggets cheeseburgers also trades in the negative. Agents of the world behind the scenes earn their billions on french fries and Coca-Cola. The composition of "complex meals" remember?
More details for those interested in http://www.ultimaerp.com/results/purchase_matrix/
In short, in the example with the seller, the sales volume is a very correct indicator, but it alone is not enough.
The KPI “sales volume” needs to be BALANCED to others: for example, profitability. The seller must be motivated to sell not only expensive steam locomotives, but a profitable low-cost coupler.
Ask, and what would be stupid not to motivate the seller to gross profit from sales? Perhaps in a limited number of cases it will be a good solution, but in the realities of a competitive market ... Remember that "locomotives" are sold with a minimum mark-up, and even in minus? Then it is easy to imagine psychiatric cramps that cover the average seller with the realization that if he sells a single TV, his salary will be LESS.
However, even for such cases there are solutions, although not technically simple, we will tell about them in the next series.
Some experience in designing the SMMP led us to conclude that
a) for any productive position (that is, NOT the parasite http://www.ultimaerp.com/results/self_born_worm/ ), there is a pair of mutually balanced calculating KPIs, one of which characterizes the amount of work performed by a person, and the second - quality.
b) the use of this pair of KPIs as the basis of the motivational formula for this position is necessary and sufficient for obtaining the best result.
For convenience of future use, we call this statement the volume-quality axiom (ALC).
Pay attention to the word “base” in paragraph b): other indicators may well participate in the motivational formula, but:
- they must be additive - a plus / subtracted bonus \ malus, and not multiplicative with a volume-quality group
- their contribution to the total income should be significantly less than that of the base pair OK. Not more than 25%.
It is easy to notice that our example about the seller’s motivation on the basis of sales volume and KPI of profitability balancing it is a special case of the KLA. The sales volume is the volume of work performed by the seller, profitability is the quality of this work.
All ingenious is simple. AOK is easy and AOK works great.
As practice shows, the main part of practical difficulties is the correct definition of what constitutes a quality indicator for this position (usually, there are no questions with KPIs).
However, such quality indicators always exist . The question is whether the KIS used by you allows them to be collected and processed.
PS A waiter in a restaurant who lives only on tips (or a fraction of them) is an infrequent example where motivation is completely described by a single indicator. This waiter is close to a private entrepreneur.
However, (tm), if we take a closer look at the “indicator” of a tip, we will see that it includes
- volume indicator (usually 5-10% of the total bill),
- and quality - “if you like the service, the service is not included in the bill”. The principle of "pay if you liked . "
Source: https://habr.com/ru/post/300224/
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