Human Resources Key Performance Indicators

Downtime Leads to Higher Business Value

Key Performance IndicatorsKey Performance Indicators (KPIs) are designed to help us better manage our businesses. In his book Key Performance Indicators: Developing, Implementing, and Using Winning KPIs, David Parmenter defined a KPI as something that is non-financial in nature, can be measured daily, and can have a significant impact on operations.” In this article, I’ll be discussing human resources KPIs and offering tips for aligning your business’s needs with the need for personal downtime.

Workforce Downtime

In the March 2014 issue of Inc. magazine, Jake Burton, CEO of Burton Snowboards, said, “I snowboard 100 days a year. That’s my first goal as a CEO: to stay connected to and be part of the sport. When I come back from snowboarding, I come back to the office amped up and infused with energy. It’s also where I get my best ideas.”

However, Burton seems to be in the minority. According to the Glassdoor Q1 2014 Employment Confidence Surveyconducted by Harris Interactive, the average American employee reports having used only half (51%) of his or her eligible time off in the past 12 months. Sixty-one percent of the employees who have taken vacation/paid time off admit working at least some while on vacation. Twenty-four percent report being contacted by a colleague about a work-related matter while taking time off, and 20% have been contacted by their boss. Ouch!

Fran Reed, owner of FreedUp dataOptics and a QuickBooks ProAdvisor, commented on the survey, saying: “What’s paid time off? It’s been so long, I forget. I agree that even when on vacation, many are still connected to the office in some way. It’s very difficult to get away completely. Is it fear of being left out or losing control? Many non-managerial, highly compensated employees do take off and rarely think of the office while gone. As an entrepreneur, taking a completely work-free vacation is nonexistent.”

Reading a tweetWe’ve all contributed to this problem by being available 24/7 for emails, text messages, and phone calls. In fact, one company ran a July 4 Twitter campaign and got the highest response rate than any other day of the year. So even though folks were away from their computers, they were still reading tweets, texts, and email on their handhelds at family events. This reminded me of a cartoon I saw of a beachgoer laying in the sand having convulsions. A lifeguard yelled out to the crowd to quickly give the patient a cell phone so he could “get connected” again and stop convulsing.

Creating “Catalysts” in Your Company

Part of the challenge is to empower staff to manage or make changes in your business. In Inc.’s March article “How to Grow without Losing What Makes You Great,” Kaaren Hanson, VP of Design Innovation at Intuit, discussed efforts to change Intuit’s culture. She came up with three key principles under the title “Design for Delight.” Her team then identified 10 in-house experts, naming them “innovation catalysts,” who were to spend 10% of their time helping other teams prosper within the company. Today, Intuit has 200 trained “catalysts” with a waiting list of 300. Hanson said, “The way you know you’ve succeeded is to ask yourself, ‘If I stopped putting energy into this, would it continue to go well?’” Hanson says she can answer that question with a resounding “yes.”

Robert Sutton, author of numerous business books, including Scaling Up Excellence: Getting to More Without Settling for Less and Good Boss, Bad Boss: How to Be the Best . . . and Learn from the Worst, used the term “cascading” to describe how good things ideally proliferate through organizations – like a waterfall. At Intuit, the initial group of 10 catalysts cascaded change for 8,000 employees.

No matter what size a business is – somewhere between Intuit’s 8,000 or Fran Reed’s FreedUp dataOptics’s team – what does senior management or the small business owner do?

Downtime KPIs

Stressed business ownerThe greatest stress point for business owners is balancing a client schedule that’s on speed dial with the need for personal and employee downtime. Personal efficiency experts would tell you, you have to treat your personal needs like you would a client’s and make sure you schedule time off.

In a workshop I ran last year, a CEO stated he wanted to track downtime. My initial reaction was to wonder what downtime he was referring to – was he talking about his business’s equipment . . . its network? It turns out he was talking about the ability to take personal downtime. He said it was good for his personal health to be able to show that he went to the gym X number of times a week and took several weeks of vacation each year. In reflecting on this, I realized it was good for the business to show that if he stopped putting the energy in, the business would continue to grow without him. A business owner who can show a new investor or buyer that the business can run without his or her presence makes the business more valuable, because it demonstrates the owner has figured out the important business principles of “people, product, and process.”

In order for small business owners to leverage themselves, the owners need to partner with other small business owners to provide backup coverage. It’s critical to mutually leverage other professionals and find resources that exist in groups, such as the The Sleeter Group Consultants Network, or use other local partner coverage. Just like doctors who let their patients know who will be “on call” while they’re out of the office on vacation, QuickBooks ProAdvisors and accounting professionals need to affiliate with other professionals to help in the event of an emergency while they’re away refreshing their spirits.

KPIs That Empower

One of the stresses for owners while they’re away from the office is making sure things are properly managed. The more confidence the owner has in the team, the more the owner will be able to relax. The below examples are meant to show “people and process” KPIs that can lead to the critical pathway of success. A well-trained and empowered staff will enable the organization to succeed and create more value to stakeholders.

People-related KPIsHere are some People-related KPIs to help empower and train staff members:

  • Number of succession plans in place for key positions
  • Percent of new staff with mentors
  • Percent of on-time performance reviews
  • Number of staff certified by third parties, trade associations, etc.
  • Employees with delegated spending authority
  • Number of staff who say they are empowered
  • Number of employees involved in community activities
  • Number of staff who say they have a work/life balance
  • Leadership initiatives targeted to rising stars
  • Number of in-house training courses
  • Number of staff initiatives implemented from staff surveys
  • Time spent in training each year

Process-related KPIsFollowing are some Process-related KPIs to ensure what gets measured gets done:

  • Cost of quality reworks, rejects, and complaints
  • Number of orders per day/week
  • Orders shipped on time
  • Days sales in receivables
  • Accuracy of orders
  • Dollars saved from employee feedback
  • Number of procedures documented

Providing a framework for improved team training and knowledge sharing allows for organizations of any size to be successful. Even firms with three to five personnel have the opportunity to mentor their staff on the values the firm wants projected to their clients.

Leverage Resources to Meet Goals

Sole proprietors need to leverage professional networks. I started a Meetup Group called QuickBooks and Business Coaches, and one of the immediate benefits realized was the partnering to support each member. We recently attended a trade show for the WorldatWork organization, which is a human resources community of 70,000 members that provides training and certification programs and peer networking. There were many in the audience of compensational professionals who were small business owners. The Sleeter Group is also an excellent resource for identifying best practices and, of course, learning more about accounting applications. Leveraging resources like these organizations is how you develop your plan to success.

Summer is here, so put in your downtime KPIs and enjoy it! Downtime will improve both your health and value.

Enjoy your summer vacation

Other free KPI resources:

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