As more and more industries become competitive, and differentiated products and services become commodities, the importance of performance management – with a customer oriented view – cannot be overlooked.

Traditional performance management is closely tied to an organisation’s strategy and business goals. It is typically cascaded down the organisation as key performance indicators (KPIs), and used to effectively manage and monitor achievement of the organisations business goals by ensuring the tasks performed at various levels do support these objectives.

More often than not, managers and employees annual bonuses are also linked to these performance management KPIs. The problem with this however is that one tends to find that most KPIs are very operational and inward focused.

While one cannot ignore that internal efficiencies are indeed important, one also needs to consider how the organisational processes impact customer service and customer experience. For instance, a typical call centre KPI would be answer rate (the percentage of customer calls answered). This means that collectively a call centre will attempt to answer as many calls as possible to achieve their targets and perhaps resolving a customer’s query and courteousness may take a back seat.

Looking at this example, we see that the call centre may make their target of answering a high percentage of incoming calls. But have they delivered customer service? Moreover, has the customer had a delightful experience? Probably not.

While this is a simple example in a customer-facing environment, the theory holds true at all levels of the organisation. It is therefore imperative that when a performance management system is implemented, it is done to provide a balanced view.

In addition to the traditional KPIs, it should be a requirement that customer centric KPIs are included.