Using OLAP to Improve Organizational Effectiveness – Part 3
March 21, 2010
This is the third and final post in my series on using OLAP tools to improve the effectiveness of organizations. In Part 1 I discussed some background concepts and terminology. In Part 2, I talked about some specific examples of how OLAP can have an impact in this area. In this post, I’ll talk about a specific application: utilizing OLAP software to provide improved performance feedback to employees.
OLAP and Performance Feedback
Improvements to organizational effectiveness can also be realized by utilizing OLAP tools to provide performance feedback to individual employees. Improved performance feedback will help employees achieve group and individual performance objectives. Increased attainment of these individual and group performance objectives will, with proper alignment of these objectives and organizational objectives, improve organizational effectiveness.
There are several advantages to providing performance feedback with an OLAP tool. If the situation is right, feedback can be provided:
- At an individual level
- On a larger sample of employee activity
- Quickly
- In a meaningful manner.
Common Problems with Performance Feedback
Organizations often make attempts to improve the provision of feedback to employees. Newsletters with departmental performance numbers, posters in gathering places displaying performance charts, and managerial reports with quantitative measures of performance are all attempts to improve the distribution of feedback to employees throughout the organization. One problem with such efforts is that they are usually not provided at an individual level. Feedback on departmental, team, or group performance is certainly helpful but depending on the size of the group, its effect will be limited. Individual performance feedback has its own problem in that it is often time prohibitive to provide extensive individual performance feedback. The result is often weekly or monthly group performance feedback with individual feedback coming only during annual or quarterly reviews.
Individual performance reviews often suffer from another problem: small sample sizes for review. If an insurance company is reviewing the performance of claims adjusters using manually prepared data, it may be impossible to review more than a small sample of the adjuster’s work over what is typically a long review period. Small samples may, of course, result in a flawed appraisal of an employee’s overall performance.
The elapsed time between events reviewed and performance appraisals is also a problem with traditional feedback provision. Consider the timing of typical reviews: an employee makes a mistake in handling a situation in January, the incident turns up in a sample taken in May, and a review is finally conducted in June. If a review had been conducted immediately following the incident, the chance of the employee repeating the mistake will obviously be lower.
Traditional feedback provision often suffers from poor presentation of the message. An interview conducted by a busy manager attempting to perform a number of appraisals in addition to other work may not be optimally effective.
Performance Feedback Improvements with OLAP
Utilizing an OLAP tool may remedy some of the traditional problems with employee feedback. Imagine again the situation of an insurance company reviewing the performance of claims adjusters. As a solution to the problems listed above, an OLAP cube could be developed and made available to adjusters on a daily basis. Adjusters could be presented with individual performance feedback delivered via the web. They could see at a glance how their activity the previous day compared to group averages and organizational objectives. Exceptions could be noted immediately by the individual employee, rather than organizational objectives. Exceptions could be noted immediately by the individual employee, rather than a manager, and quickly corrected. Feedback could be provided on all activity from the previous day or week rather than on a small, dated sample. Finally, feedback could be presented in easy to understand charts which, in addition, roll-up to display departmental and organizational performance as well.
Improved performance feedback gives employees the ability to monitor their own performance and to take corrective action quickly. By improving the ability of individual employees to meet their performance objectives, the ability of the organization to meet its objectives and fulfill its mission is improved as well.
Conclusion
OLAP technology can improve organizational effectiveness by:
- Improving management’s knowledge of progress on objectives
- Improving employee coordination on efforts to achieve these objectives
- Communicating the link between employee effort and performance
- Communicating the link between employee performance and reward
- Improving employee performance feedback.
Although OLAP tools can provide assistance in these areas, their impact is obviously limited by factors specific to each organization. An OLAP tool cannot compensate for poor development of objectives, poor performance reward systems, or any of the other organizational factors discussed. Utilizing an OLAP tool as I’ve described in this series with no attention given to the underlying systems it is trying to address will, at best, have no effect.
In an organization that has clearly defined its objectives and has implemented well-designed reward systems, utilizing an OLAP tool as we’ve discussed can offer a tremendous payoff. The ability to provide employees with improved performance feedback and to demonstrate the link between individual performance and organizational performance is extremely valuable. By helping an organization align individual goals with corporate goals, an OLAP tool can help an organization become more effective.
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