Performance Management Cycle
Topic 3. On-Going Communication and Feedback

## Four Focus Areas in Depth

### Focus Area 1: Inspire action that is meaningful, purposeful and practical (cont.)

#### Pareto Principle

Vilfredo Pareto, an Italian mathematician and economist, discovered that 80% of Italy's wealth was in the hands of 20% of the population. Ever since that "aha," a number of 80-20 rule phenomena have been observed (i.e., 80 percent of your sales will come from 20 percent of your sales staff; 20 percent of your tasks will cause 80 percent of your results, etc.).

##### Focus on Priorities: Pareto Principle or 80/20 Rule

Can you identify the 20% activities in your unit that produce 80% of your results?

##### Working with Metrics

Measurements provide focus and direction for how an employee spends his/her time. Agreement between the employee and supervisor on what a successful outcome looks like at the beginning of a project helps determine what data to measure. Metrics provides data that allows the employee and/or supervisor to adjust work, if necessary. Typically, there are four areas to focus measures:

What gets measured gets done. What is rewarding gets done.

1. Quantity
2. Quality
3. Accuracy
4. Timeliness
##### Key Result Areas (KRAs)

KRAs answer the question, "What is value-added?" If it is customer-driven, then "What is value-added from the perspective of the customer?"

In an individual job, these can be derived from the major duties listed in the position description. Within a group, they can be derived by clarifying desired outcomes. This is consistent with the 80-20 principle.

### To realize the above goal, what might be the measurements that will make the most difference?

In many situations, you will need to brainstorm a list and use your best guess to determine what metrics to use. In other situations, you may know already.

What's known is that 1-to-1 contact produces the best results. Therefore, the set of activities that will result in the contact is going to have the biggest payoff. Phone contact will produce the quickest contact. What will make the biggest difference in getting results is the number of phone contacts made and dollars collected.

This person's job may also require them to write letters, fill out more paperwork and conduct other activities. The more time that can be focused on making the phone contacts, the higher the productivity will be.

Measurements: Therefore, by tracking the number of phone calls made, actual contacts, and dollar amount collected, a collections person can track this information each day and obtain relatively instant feedback on their performance.

When averaged over the course of a week, it provides hard data for the supervisor and employee to assess performance.