Human Competence Engineering Worthy Performance Thomas F. Gilbert

1. Human CompetenceEngineering Worthy PerformanceThomas F. Gilbert Chapter 2 The Second Leisurely Theorem What is PIP?

2. Gilbert�s First Leisurely Theorem

3. To put it another way: Competent people are those who can create valuable results without using excessively costly behavior. Thomas Gilbert Capitalists invest in a business, project, tool, or procedure to earn money; not to get back the value of their initial investment. Geri Corcoran

4. Gilbert�s Second Leisurely Theorem According to Gilbert: Any kind of performance can be measured. The belief that the more complex forms of performance are not subject to measurement and quantification arises simply from ignorance about how to do it. According to Gilbert: Any kind of performance can be measured. The belief that the more complex forms of performance are not subject to measurement and quantification arises simply from ignorance about how to do it.

5. Gilbert�s Second Leisurely Theorem Typical competence is inversely proportional to the potential for improving performance (the PIP), which is the ratio of exemplary performance to typical performance. The ratio, to be meaningful, must be stated for an identifiable accomplishment, because there is no �general quality of competence.� In shorthand, this theorem states that: PIP = Wex / Wt PIP ( Potential for Performance Improvement) is equal to the ratio of exemplary performance / typical performance The accomplishment must be identifiable in concrete measurable terms.PIP ( Potential for Performance Improvement) is equal to the ratio of exemplary performance / typical performance The accomplishment must be identifiable in concrete measurable terms.

6. Calculating PIP First Step: Determine the worth of typical performance. Second Step: Determine the worth of exemplary performance. Third Step: Calculate the PIP or �gap� between typical performance and exemplary performance. Here is an example: Greenhorn and Greenthumb are both farmers with different results from their efforts. First let�s look at a measurement of their current actual performance: Greenhorn yields $1000 but spends $500 doing it. Greenthumb yields $2000 but spends $250 doing it. Greenhorn W = 1000/500 or W=2 Greenthumb W = 2000/250 or W=8 Greenthumb is yielding 8 times his investment and Greenhorn is only yielding 2 times his investment. To calculate the PIP = Wex / Wt or 8/2 = 4 With the right resoures, skill, know-how, etc., Greenhorn could be yielding 400% more than he is currently yielding. Here is an example: Greenhorn and Greenthumb are both farmers with different results from their efforts. First let�s look at a measurement of their current actual performance: Greenhorn yields $1000 but spends $500 doing it. Greenthumb yields $2000 but spends $250 doing it. Greenhorn W = 1000/500 or W=2 Greenthumb W = 2000/250 or W=8 Greenthumb is yielding 8 times his investment and Greenhorn is only yielding 2 times his investment. To calculate the PIP = Wex / Wt or 8/2 = 4 With the right resoures, skill, know-how, etc., Greenhorn could be yielding 400% more than he is currently yielding.

7. Corollary to the Second Leisurely Theorem The lower the PIP of any person or group, the more competitive that person or group is. Competition � is about performing with comparative competence; not about greed, aggression, determination, and expending energy. The closer your PIP is to 1, the closer your performance is to the exemplary standard. Competition � is about performing with comparative competence; not about greed, aggression, determination, and expending energy. The closer your PIP is to 1, the closer your performance is to the exemplary standard.

8. Characteristics of PIP PIP takes the humane and practical view that poor performers have great potential. PIP is dynamic and will never be equal to �1�. Larger gaps are easier to reduce. - PIP does not assign feeble limitations to people as the IQ does. - Someone will always discover a better way of doing something so that the exemplar is a constantly moving target. - Usually a gap of 4.0 is easier to reduce to 1.5 than reducing 1.2 to 1.1. This is not true if you have full knowledge of why the examplar is superior and full control over the variables. - PIP does not assign feeble limitations to people as the IQ does. - Someone will always discover a better way of doing something so that the exemplar is a constantly moving target. - Usually a gap of 4.0 is easier to reduce to 1.5 than reducing 1.2 to 1.1. This is not true if you have full knowledge of why the examplar is superior and full control over the variables.

9. Characteristics of PIP All things being equal (opportunity, tools, etc.) some people will still perform differently than others due to inherent characteristics. Measuring competence is not enough � you must do it comparatively and don�t use the average. The person that represents the exemplar for an overall task, may not be the exemplar on every subtask. - In the normal work world, these differences are not significant enough to disprove the PIP formula. - You want to compare to the highest standard to measure potential. Using PIP as a goal is about getting the best currently possible performance. - Be clear about what accomplishment you are measuring before attempting to set the exemplar (pick the person to measure against). - In the normal work world, these differences are not significant enough to disprove the PIP formula. - You want to compare to the highest standard to measure potential. Using PIP as a goal is about getting the best currently possible performance. - Be clear about what accomplishment you are measuring before attempting to set the exemplar (pick the person to measure against).

10. Characteristics of PIP Units of Measurement � Measure units of performance, not behavior. Do not measure someone who has no control over item measured. And, look beyond the immediate environment. Once unit of measurement is determined, figure out the formula. PIP indicates the potential for improving performance, not how economically valuable it is. - A lot of behavior does not necessarily yield exemplary performance. As a matter of fact, people who don�t know what they are doing, typically work harder to make up for their lack of knowledge, tools, or experience. Look beyond the immediate environment � getting all of your employees to perform at the level of the exemplar in your company is valuable but not nearly as valuable as increasing their performance to the level of the exemplary standard set by your competition. - PIP must be translated into monetary value or �stakes�. A large PIP with small economic value is not necessarily worth pursuing. - A lot of behavior does not necessarily yield exemplary performance. As a matter of fact, people who don�t know what they are doing, typically work harder to make up for their lack of knowledge, tools, or experience. Look beyond the immediate environment � getting all of your employees to perform at the level of the exemplar in your company is valuable but not nearly as valuable as increasing their performance to the level of the exemplary standard set by your competition. - PIP must be translated into monetary value or �stakes�. A large PIP with small economic value is not necessarily worth pursuing.

11. Three Major Requirementsof Worthy Performance There may be more than one dimension to performance improvement: Quality Accuracy Class Novelty Quantity Rate Timeliness Volume Cost Labor (behavior repertories) Material (environmental support) Management Quality Accuracy � accomplishment without error of omission or comission Class � comparative superiority beyond mere accuracy Class can be measured by: Market Value Judgement Points Physical Measures Opinion Ratings Novelty � inventions are easier to measure than artistic works. Invention example: engine that gets 100 miles to the gallon and still performs well. Artistic works are more likely to be measured by judgement points. Quantity Rate � pieces per hour, time to completion. Timeliness � deadline is the key. A manufacturing line running before the night shift arrives. Volume � bulk is important but it is not time sensitive. How many sales did you make? Cost Labor � amount spent to purchasing necessary labor to meet accomplishment including benefits, insurance, taxes, etc. Material � all material costs in meeting accomplishment Management � internal allocations, supervision Table 2-4 in the Gilbert book gives examples of jobs, accomplishments for those jobs, and performance measures and shows the relevant requirement that applies to each measure. Quality Accuracy � accomplishment without error of omission or comission Class � comparative superiority beyond mere accuracy Class can be measured by: Market Value Judgement Points Physical Measures Opinion Ratings Novelty � inventions are easier to measure than artistic works. Invention example: engine that gets 100 miles to the gallon and still performs well. Artistic works are more likely to be measured by judgement points. Quantity Rate � pieces per hour, time to completion. Timeliness � deadline is the key. A manufacturing line running before the night shift arrives. Volume � bulk is important but it is not time sensitive. How many sales did you make? Cost Labor � amount spent to purchasing necessary labor to meet accomplishment including benefits, insurance, taxes, etc. Material � all material costs in meeting accomplishment Management � internal allocations, supervision Table 2-4 in the Gilbert book gives examples of jobs, accomplishments for those jobs, and performance measures and shows the relevant requirement that applies to each measure.

12. Selecting Units of Measurement 1. Determine the possible units of measure. 2. Determine which unit you should be measuring. 3. Do you have units for everything you want to measure. 4. Whose performance are you measuring? 5. Make sure you are not measuring the same thing twice. 1. Depends on what you are measuring. 2. Which requirement of worthy performance applies? Quality, quantity, or cost. e.g. You could measure sales volume as # of policies sold or sales revenues in $ 3. Check each accomplishment against the list of nine requirements. 4. Who has control over the variations in the measure. Don�t apply a measure to a clerk, if the manager is the one who controls the unit of measure. 5. Rate and labor costs are tricky. Another example: sales suspects and sales prospects � one is the determinant of the other.1. Depends on what you are measuring. 2. Which requirement of worthy performance applies? Quality, quantity, or cost. e.g. You could measure sales volume as # of policies sold or sales revenues in $ 3. Check each accomplishment against the list of nine requirements. 4. Who has control over the variations in the measure. Don�t apply a measure to a clerk, if the manager is the one who controls the unit of measure. 5. Rate and labor costs are tricky. Another example: sales suspects and sales prospects � one is the determinant of the other.

13. Comparative PIPs To find the real locus of opportunity, you must sometimes compare PIPs at different levels of management. Begin a program of improvement at the highest level where a PIP exists. Employee to employee will show gaps in performance, but if separate the employees into groups by supervisor, you may find that the real difference lies with supervisor. You may also find that the exemplar employee does not have the highest PIP initially. The book uses the example of two supervisors�one supervisor�s employees� PIPs are much higher than the other. However, there is an employee in the low group whose PIP is much than her/his fellow group members. With the supervisor using the right techniques, this employee could prove to be the exemplar.Employee to employee will show gaps in performance, but if separate the employees into groups by supervisor, you may find that the real difference lies with supervisor. You may also find that the exemplar employee does not have the highest PIP initially. The book uses the example of two supervisors�one supervisor�s employees� PIPs are much higher than the other. However, there is an employee in the low group whose PIP is much than her/his fellow group members. With the supervisor using the right techniques, this employee could prove to be the exemplar.

14. Spurious PIPs The belief that situations are too different to compare making the PIPs spurious (unreliable). Look at the PIP in different ways to see what really is making a difference. The book uses the example of the printer of directories. The PIPs were considered spurious by the manager because the different locations use different procedures and only some locations are computer automated. The consultant set up a table that compared the PIP by supervisor and at the divisional level. It turned out that the real difference was between divisions. Different procedures turned out to be the problem and the procedures could be changed.The book uses the example of the printer of directories. The PIPs were considered spurious by the manager because the different locations use different procedures and only some locations are computer automated. The consultant set up a table that compared the PIP by supervisor and at the divisional level. It turned out that the real difference was between divisions. Different procedures turned out to be the problem and the procedures could be changed.

15. Measurement andthe Performance Audit Start with general measures before going to specific measures. Identify Accomplishments Identify Requirements Identify Exemplary Performance Measure Exemplary Performance (Wex) Measure Typical Performance (Wt) Compute the PIP Translate the PIP into �stakes� � economical potential Performance analysis in any company can generate a mountain of data. The Performance Audit helps you manage the task by: Helping you identify where to direct your efforts. Gilbert uses a spreadsheet he calls the Performance Table. He completes the analysis and table at the highest level first, then repeats the analysis at the lower levels.Performance analysis in any company can generate a mountain of data. The Performance Audit helps you manage the task by: Helping you identify where to direct your efforts. Gilbert uses a spreadsheet he calls the Performance Table. He completes the analysis and table at the highest level first, then repeats the analysis at the lower levels.

16. How not to Measure Competence �The IQ concept says that some people have it and some don�t. The concept of the PIP says that competence is external to people; that is, competence is an effect they can have upon the world, and any person with normal faculties has the potential for accomplishing the effects that other people have shown possible.� �Performance improvement sees people for what they can do, and not for their limitations.� Don�t use behavior based measurements. Its not about the behavior. Beware of using IQ as a measure of performance potential. Don�t use behavior based measurements. Its not about the behavior. Beware of using IQ as a measure of performance potential.