Last updated on Jun 23, 2024

How do you communicate and motivate your employees with non-financial performance indicators?

Non-financial performance indicators (NFPIs) are measures of how well your organization is achieving its strategic goals, such as customer satisfaction, employee engagement, innovation, quality, or social responsibility. They can help you communicate and motivate your employees by showing them how their work contributes to the bigger picture, aligning their actions with your vision and values, and rewarding them for their achievements. However, to use NFPIs effectively, you need to follow some best practices and avoid some common pitfalls. Here are some tips on how to do that.

1 Choose relevant and balanced NFPIs

Not all NFPIs are equally important or useful for your organization. You need to select the ones that reflect your strategy, mission, and competitive advantage, and that are relevant for your industry, market, and stakeholders. You also need to balance your NFPIs with your financial performance indicators (FPIs), as they complement each other and provide a more comprehensive picture of your performance. A good way to do that is to use a framework like the balanced scorecard, which links your NFPIs to your FPIs, and organizes them into four perspectives: customer, internal, learning and growth, and financial.

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José Tapia

Jefe de turno de producción | Jefe en seguridad, salud ocupacional y medio ambiente | Gestión de producción & operaciones | Liderazgo para la innovación | Mejora continua | 5 S |1x🏆LinkedIn Top Voice |
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Elegir NFPI relevantes: Los NFPI deben ser relevantes para el trabajo que los empleados están realizando. Por ejemplo, si estás dirigiendo un equipo de servicio al cliente, podrías considerar indicadores como la satisfacción del cliente o el tiempo de respuesta. Equilibrar los NFPI: Es importante tener una mezcla equilibrada de diferentes tipos de NFPI. Esto puede incluir indicadores de proceso (como la eficiencia), indicadores de resultado (como la calidad del producto) e indicadores de capacidad (como el desarrollo de habilidades). Comunicar los NFPI de manera clara y regular: Debes comunicar los NFPI a tus empleados de manera clara y regular.

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2 Communicate clearly and consistently

Once you have chosen your NFPIs, you need to communicate them clearly and consistently to your employees. You need to explain what they mean, why they matter, how they are measured, and how they relate to your FPIs and your strategy. You also need to provide regular feedback and updates on your progress and performance, using visual aids, dashboards, reports, or meetings. By doing so, you can help your employees understand their roles and responsibilities, align their behaviors and decisions with your goals, and monitor their performance and improvement.

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3 Motivate and reward

Communication is not enough to motivate your employees. You also need to reward them for their achievements and efforts, and recognize their contributions and value. You can use different types of rewards, such as praise, recognition, feedback, career development, or bonuses, depending on what motivates your employees the most. However, you need to be careful not to create perverse incentives or unintended consequences by focusing too much on one or a few NFPIs, or by setting unrealistic or conflicting targets. You need to ensure that your rewards are fair, transparent, consistent, and aligned with your strategy and values.

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4 Involve and empower

Another way to motivate your employees is to involve and empower them in the design, implementation, and evaluation of your NFPIs. You can do that by soliciting their input and feedback, involving them in setting goals and targets, giving them autonomy and flexibility, and encouraging them to learn and innovate. By doing so, you can increase their ownership and commitment, foster their creativity and problem-solving skills, and enhance their trust and collaboration.

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5 Review and improve

Finally, you need to review and improve your NFPIs regularly, as they are not static or fixed. You need to monitor and evaluate their effectiveness, validity, and reliability, and make adjustments as needed. You need to consider the changes in your environment, strategy, and performance, and the feedback from your employees, customers, and other stakeholders. You also need to learn from your successes and failures, and identify the best practices and areas for improvement.

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Ahmad Nakib
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Although non-financial measures are increasingly important in decision-making and performance evaluation, companies should not simply copy measures used by others. The choice of measures must be linked to factors such as corporate strategy, value drivers, organizational objectives and the competitive environment. In addition, companies should remember that performance measurement choice is a dynamic process – measures may be appropriate today, but the system needs to be continually reassessed as strategies and competitive environments evolve

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Guillaume Egasse 🚀

CEO | Chief Financial Officer | Chief Human Resources Officer | Master degree of Management and Financial Strategies | International Finance | Global MG Consulting
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🚀 Relevant NFPIs: Choose indicators aligning with strategy. Balance with financial metrics. The balanced scorecard approach paints a comprehensive picture. 📢 Clear Communication: Simplify NFPIs, explain significance, and link to strategy. Visual aids and regular updates create transparency, aligning goals and monitoring performance. 🌟 Motivate and Reward: Beyond communication, reward with recognition, bonuses, and career growth. Ensure fairness, avoiding unintended consequences and aligning with strategy. 🤝 Involve and Empower: Boost motivation by involving employees in NFPI processes. Seek input, grant autonomy, and encourage innovation. Ownership and commitment increase, fostering a culture of trust and collaboration.

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How do you communicate and motivate your employees with non-financial performance indicators?

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1 Choose relevant and balanced NFPIs

2 Communicate clearly and consistently

3 Motivate and reward

4 Involve and empower

5 Review and improve

6 Here’s what else to consider

Management Control

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