People have been working from home even before the pandemic, but their number significantly increased when the health crisis led to lockdowns and travel restrictions. Companies were forced to send their employees home to work remotely to comply with social distancing measures and keep the workforce healthy. Statista shows that before the pandemic, only 17% of US employees worked remotely for five days or more weekly. However, the number grew to 44% during the outbreak in 2020.
When the pandemic subsided and governments eased travel restrictions, some companies asked their workforce to return to the office while others offered the hybrid set-up. However, most employees still prefer remote work.
A poll conducted by Pew Research Center with 5,889 workers in America in January 2022 found that 61% of those who work from home said they avoid going to work by choice and 38% claim their office is closed. It represents a shift from October 2020, when 64% of people worked from home because their office was closed and 36% did so voluntarily.
In spite of that, 50% of leaders in information worker roles want to pursue getting employees back to the office full-time next year, based on Microsoft’s Work Trend Index 2022 report. Still, 52% of respondents say they highly consider becoming remote or hybrid in the year ahead and 80% claim that since remote or hybrid work arrangements were implemented, their productivity has increased.
According to the popular job site Flexjobs, one of the benefits of working from home is it increases “productivity and performance” as employees encounter fewer interruptions, have a quieter work environment, and have increased workplace comfort, resulting in more focused time.
In a research conducted in Latin America, they explored the relationship between remote work, work stress, and work-life during pandemic times. Researchers found out that by having flexible work schedules, the employees’ engagement and productivity levels increased because they could work at their most productive time. Privacy also plays a big role in employees’ efficiency. However, the productivity level is negatively affected when the worker is constantly interrupted by children or adults that need assistance.
A case study published in the Journal of Occupational and Environmental Medicine investigated the impact of family-work conflict, social isolation, distracting environment, job autonomy, and self-leadership on employees’ productiveness, work engagement, and stress experienced when working from home during the pandemic. The authors discovered that excellent self-leadership skills and autonomy positively impact the time assessment in a WFH scenario.
Results from a qualitative study by Danielle Tinneveld of Radboud University also show that productivity tracking facilitates the identification of process bottlenecks. The affected staff gets less anxious and annoyed when these difficulties are resolved, and overall production efficiency improves.
How Employees Can Track Their Productivity at Home
On a remote workday, people have to manage work and non-work-related tasks. To be productive, they have to master the art of time planning. Effective time management involves planning each activity in a time frame, considering priorities such as urgent work tasks and eating breaks. Individuals should fit their activities into 16 hours to get 8 hours of sleep each day to achieve great productivity. By monitoring the duration of their tasks, they can observe which actions can be improved.
To see if their time management strategy is effective, remote workers can use key performance indicators (KPIs). Some KPIs they can consider are:
By monitoring the percentage of tasks performed as planned, individuals can see if they reached their target or not. By knowing the percentage of time spent working, people have insights into the free time left for non-work-related tasks, such as going on a walk, relaxing, cooking, eating, and other housework activities (washing clothes and dishes, drying clothes, cleaning floors).
It’s a different story for employees whose companies have return-to-office schemes. Their organizations should rethink their performance management system to consider the new ways of working that employees gained during the pandemic. Evaluating the relevance of KPIs has become important now more than ever. To better understand KPIs, its nature, characteristics, and implementation, enroll now to The KPI Institute’s Certified KPI Professional and Practitioner course.
The world is moving towards a more sustainable business practice. Investors, advocacy groups, and academics have asked corporations to take on added purpose beyond the traditional pursuit of shareholder value. Even the business leaders from Business Roundtable stated that major companies are investing in their employees and communities because they realize it is the only way to achieve long-term success.
The fundamental concept behind this shift is the Triple Bottom Line (TBL), where companies must measure not only their financial performance but also their environmental and societal performance as well. The TBL concept is not new; the term had been coined by John Elkington in the 1990s. Later in 2003, Amanco pioneered in measuring the impact of its TBL strategy, building on the idea of Balanced Scorecard (BSC) from Kaplan and Norton. The new sustainability BSC included environmental and social dimensions in addition to the basic dimensions of the initial BSC.
In a recent article, Kaplan stated that the demands for sustainability today are even higher. In summary, there are three different perspectives from three main stakeholders categories:
Customers: The customers’ preferences in every product category shifted towards more sustainable products. Over the past five years, there is a 71% rise in online searches for sustainable goods globally in countries with either developed or emerging economies.
Employee: Reports of unsafe working conditions at Amazon warehouses caused many criticisms. Their employees protested for fair pay and COVID protection. This example reflects the importance of social and ethical issues. Fulfilled workers are more loyal and likely to stay compared to those who only work for a weekly paycheck. Worse, incidents like this would probably affect consumers’ perception badly and hurt the company’s brand image.
Environment and social: As more consumers demand transparency and accountability, companies must consider the environmental and social aspects in every decision they make. For example, major fashion brands are beginning to pay attention to the demand for more sustainable practices.
The stakeholders have always played an important role in the business ecosystem. But in today’s post-pandemic era, the stakeholders expect even more from companies in terms of environment (e.g., sustainability, health) and social (e.g., inclusive, ethics, social welfare) aspects. As with any crisis, there are chances to learn and make a positive difference.
This article aims to remind companies of the criticality of environment and social dimensions. Taking note of its importance, this might be the opportunity to revisit the idea of sustainability BSC. The sustainability BSC can be used as a groundwork for a future BSC that is environmentally, socially, and ethically responsible. For more on utilizing the Balanced Scorecard, The KPI Institute has developed the Certified Balanced Scorecard Management System Professional to help organizations maximize the tools’ potential.
Curious about more applications of the Balanced Scorecard? Click here.
Performance measurement has been a topic of discussion in the last decades for both academicians and practitioners. In the 1990s, performance measurement suffered a huge transformation soon after some movements from academia and corporations commenced analyzing the existing lack of an effective way to measure performance, pushing for a new approach to evaluate organizational achievements.
The Supply Chain in the ’90s
Since then, academics and practitioners have managed to develop better performance measurement methods, which brought a relevant revolution for performance measurement theory and practice.
Among these, the stand out was the Balanced Scorecard (BSC), a strategic performance measurement system that allowed you to link strategic objectives with their respective measurements by way of four main perspectives—Learning & Growth, Business Process, Customers, and Financial—creating a clear rationale for a bottom-up cause-and-effect relationship.
In the same vein as the growth of networking for businesses in the 1990s, when the concept of developed supply chains emerged, companies had to start measuring not only their exclusive threshold operations, but also their extensive downstream and upstream processes, including those with suppliers, retailers, and final customers.
In order to fulfill this objective, new approaches of performance measurement systems for supply chains began being discussed and implemented, which also included updating those already used for organizational performance measurements.
Modern-Day Supply Chain Challenges
As it is now widely-known, the COVID-19 pandemic has had a massive impact on supply chains. Disruptions have occurred in several industries, from healthcare and manufacturing, to finances and services. This has painfully highlighted that our supply chains were not resilient enough to avoid such disruptions.
Many factors may have influenced these supply chains’ vulnerabilities, including the supply chain strategy design and its planning and control. It is more than likely that performance measurement systems in these cases were not able to provide sufficient visibility on how deficient the supply chains’ strategies were in terms of their reaction time resilience to the threats generated by the pandemic’s effects.
Despite the visibility and transparency that the digital technologies of the Industry 4.0 age (e.g. Internet of Things, Blockchain) may bring to supply chain processes – technologies that focus on managing large amounts of data (i.e. the use of Big Data Analytics approach), Performance Measurement must nonetheless undergo a breakthrough transformation, as the environment around it has experienced sudden and significant changes.
The post-pandemic period requires new ways of measuring performance in supply chains. Digital technologies may certainly offer assistance, effectively supporting this transformation, but beyond that, performance measurement must be redesigned with a strategic risk-based approach that fundamentally transforms all of the measurement perspectives that supply chains have.
It must provide a clear view of how resilient a supply chain is in the face of an imminent threat, being able to highlight the pre-, current, and post-disruption trend status.
Moreover, it should be able to successfully support a supply chain’s decision-makers when they want to enact contingency actions, especially those concerning the main supply chain processes, such as sourcing, manufacturing, and delivery.
For instance, the performance measurement system must contain lead and lag indicators, depicting how a supplier’s base and retailers are at the moment of imminent disruption and how they will be able to jointly respond to the disruption’s effects.
Key Performance Indicators (KPIs), such as inventory levels in the downstream, upstream supply chain flows, readiness and effectiveness of joint contingency plans with suppliers and retailers, and level of disruption in supply chain entities may be useful indicators to effectively measure supply chain response in unexpected situations.
Furthermore, manufacturing and distribution processes must be measured in terms of their responsiveness to emergency situations (e.g. # Time to deliver unplanned orders, flexibility of mix and volume production to sudden demand variations, flexibility of goods delivery route changes).
In that sense, demand has to be properly evaluated and understood, considering aspects of current and upcoming customers’ behaviors amid the potentially rupturing event (e.g. KPIs as % Demand variation, $ Estimated demand).
The measurement of financial capacity is also paramount to evaluating not only how capable the organization is in terms of managing cash-flow and investments to keep its supply chain going, but also how performant its supply chain is in terms of operational costs and revenue contribution.
In order to evaluate the financial impact of disruptive situations to the supply chain, KPIs such as # Cash-to-cash cycle time and $ Value-added margin during the critical period, % Return on investments made for contingency initiatives and $ Extra operational costs may help supply chain specialists develop a better decision-making process.
With all things considered, I believe that ultimately, the most important aspect, beyond simply adopting KPIs, is the supply chain leadership’s willingness to consider adopting a robust framework around which they can structure their performance measurement system during an exceptional period.
It has to come from a strategic point of view, with a clear cause-and-effect relationship outlined. For this purpose, the well-known frameworks such as the BSC and Performance Prism may be considered, with the due adaptations required for the new business environment.
The reality of it all is that this pandemic has generated an unprecedented level of deliberation and consideration amongst academics & practitioners alike. Performance measurement is no longer just “nice-to-have”. It must be a topic of deep consideration for the supply chain audience, in order to pursue a more effective management style that can withstand sudden and impactful events, such as 2020’s COVID-19.
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About the Author
Guilherme F. Frederico is a Professor of Operations, Supply Chain and Project Management at the Federal University of Paraná – UFPR – School of Management, Curitiba, Brazil. He is also Professor and Researcher at Information Management MSc, Ph.D. programs, and a Master’s Program in Business Administration in this same university.
He holds a Ph.D. in Industrial Engineering from the Federal University of São Carlos – UFSCar. His B.Eng (Civil Engineering) and MSc in Industrial Engineering were obtained from São Paulo State University – UNESP. Prof. Frederico has been working in collaboration with the Centre for Supply Chain Improvement from the University of Derby – UK as a Visiting Professor and affiliated Researcher.
The Council of Logistics Management defines logistics as “The process of planning implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.” Reverse Logistics, on the other hand, is the process that includes all the above-mentioned activities, only performed in reverse order. More precisely, reverse logistics refers to the procedure of moving goods from their typical final destination back to their origins. This operation is meant to recapture value from products or to properly dispose of them.
The objectives of reverse logistics include, among others:
improve the quality of products and services by returning defective products and equipment
reduce costs related to packaging and auxiliary materials
be actively involved in protecting the environment
Thus, reverse logistics provides a wide range of opportunities for improvement, ranging from customer service and returns processing, to supplier management and unexpected revenue sources.
The implementation of reverse logistics activities stimulate several key areas that influence performance and which, in the end, have a positive impact on revenue.
Reverse logistics activities are typically processes an organization performs to collect products which are either used, unwanted, damaged or outdated. Packaging and shipping materials returned from the end-user or reseller are also included in this process. Once a product was returned, the organization has many disposal options from which it can choose.
The figure below shows how the recovery value is increased by implementing such activities:
Figure 1. Recovery Value Improvements
Following the completion of a reverse logistics process, the products returned may be sold again but only after being reconditioned, repaired or re-manufactured. However, such products can never be sold as new ones.
When the product cannot be brought back into working order under any circumstances, either because of its poor condition, legal or environmental repercussions, the organization will try to dispose of it with the smallest amount of cost implications.
The organization will retain any materials that still hold value and which can be reclaimed. Other materials that the organization can recycle are removed from the product before finally sending what remains of it to an authorized center, to be properly disposed of.
Usually, packaging materials returned to an organization can be reused. For example, shipping containers or pallets can be reused many times before their disposal. Damaged containers or pallets can often be refurbished and then utilized for the remainder of their life-cycle. The work required to recycle such a product for future uses can be made in-house or with the help of an outside company specialized in repairing shipping containers or pallets.
At the end of the product’s life-cycle, when no more repairs can be made, the reusable materials left of the transportation packaging are salvaged while the rest are sent to an authorized disposal center. In some cases, however, another purpose is given to those materials.
European laws oblige companies to take back the transportation packaging used for their products. Therefore, to reduce their costs, European organizations try to reuse these materials as much as possible.
Strategic variables are not only business elements with a long-term bottom line impact. Organizations should manage their strategic variables for the sustainability of the company. Solutions such as reverse logistics are more than just tactical or operational answers to a problem.
Most professionals interested in performance management must have heard by now about a new hip approach – Objectives and Key Results (OKRs). So, what is it all about? Why is everyone so mesmerized by this new system?
Some may argue that the OKR format became popular because companies with strong brands, such as Google or LinkedIn, credit their success to OKRs. Some might say that it is just another, more flexible, way of working with KPIs.
Others claim that OKRs are simply operational measures, while KPIs reflect the achievement of the strategy. However, supporters of the system state that OKRs represent a tool to create a link between the vision and the reality of an organization.
So, as we can see, there are many ways of interpreting them, but what is the truth behind OKRs and how did they become so popular? Do they really bring superior benefits to organizations compared to other performance management systems or are they used simply because KPIs are starting to be too “mainstream” and the field needed something new?
Timeline of OKR Popularity
Figure 1. OKR Timeline | Source: Author’s Compilation Based on Step by Step Guide to OKRs
OKR Components
Objectives and Key Results is a goal-setting methodology deriving from Management by Objectives, which tries to simplify the concept of performance management. The main goal of this approach is to be easy to use, flexible and answers 3 main questions:
Where do I want to go?
How will I know I’m getting there?
What will I do when I arrive?
Figure 2. OKR Questions | Source: Author’s Compilation Based on Step by Step Guide to OKRs
OKRs are there to better serve fast-changing, agile businesses and environments, given that this system requires regular updates and feedback, as well as employs a smaller time span for changing objectives or key results.
The main changes an OKR-focused system brings are the following:
The achievement of our actions or of what we want to do is supposed to be stretched (60-70% achievable) and set quarterly. In other words, the OKR methodology encourages employees and organizations to set inspirational, challenging, higher-risk objectives, not just operational ones.
The purpose is to strive to do more, which is why a lower achievement than 100% is considered good. The number of objectives is limited to a maximum 5 to ensure employees are focusing on the most important work for one quarter at a time.
Everyone should be involved in the OKR-setting process and employees should be responsible for creating their own OKRs. This automatically creates more empowerment and accountability for the value their job brings. The process of empowering employees to think outside the box, and allowing them to take risks, will result in higher employee engagement.
By not just focusing on day-to-day activities and taking part in a more creative process, your workforce will be able to generate increased levels of innovation as well.
The Value creation theory says Key Results should focus on the impact of activities, not measure the result of the tasks. Setting Key Results that trigger going the extra mile for each employee will create even more value for the entire organization, which will allow it to go even further than planned.
Objectives and Key Results should focus on alignment, not cascading. When setting their own OKRs, employees should take into consideration they own responsibilities, the strategic direction, the already-established OKRs or the management’s aspirations in the organizational context. It is recommended that an employee’s OKRs are actionable by that person, so it’s harder to assign OKRs or create a set of general OKRs for a position.
Given that OKRs are set quarterly and designed to stimulate constant communication, this tool offers more flexibility that the others. It allows fast changes through weekly or biweekly progress checks and makes sure that the focal point is reconsidered each quarter.
However, after all is said and done, we have to remember that the main change OKRs bring is cultural.
Instead of only giving employees objectives and KPIs, employees should understand the strategy, in order to be able to align their OKRs to the strategy or the management’s.
Instead of being given the measures of their performance, employees are involved in setting the focus of their quarterly work.
Instead of measuring the performance of the employees based only on what they have to do, employees are measured based on the value they bring and are offered the flexibility to work on innovative ideas, which might in return bring a lot of benefits to the organizations.
Instead of linking performance with rewards and making sure employees do what they need to do because of incentives, organizations try to engage employees, to make them part of the vision.
As we can see, when implementing Objectives and Key Results, the process feels a lot more back-and-forth than other management methods.
On the one hand, managers play a key role since they need to challenge their employees to consider the value they bring to the organization, as well as offer them support and stimulate regular communication on their OKRs’ status.
On the other, employees represent an equivalent key player, since they need to set their OKRs and be honest with themselves in the process, trying to set challenging OKRs and be willing to go the extra mile.
Visit our website to read more articles covering OKRs and other similar performance management concepts.
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Editor’s Note: This article is part of an ongoing series that will feature practical tips and tricks we’ve learned while implementing the OKR system within various organizations.This article has been updated as of September 17, 2024
