Beginning in 2003, I had the distinct pleasure to work with the construction management function of a large real estate investment trust (REIT). During this time, I collaborated with the client team to not just develop training but more so to assist their team of new construction function leaders as they grappled with a position change that represented two leadership pipeline turns (from managing others to functional leader), dramatic changes to their processes, and a particularly challenging and annually changing structure. Beginning with today’s post, I’ll share some of what we learned along the way over the course of this 3-year project and relationship.
Analyze Employee Performance
Before delving into what we discovered during the performance analysis phase, it’s important to understand that in a REIT construction managers have responsibility for coordinating the construction of office space per a tenant’s specifications and the budget made available via the terms of the lease. This company’s construction management function included personnel at each of their 10 regional offices; typically, this included a Senior Construction Manager (or Director of Construction), a number of Construction Managers, and a Construction Management Administrative Assistant.
Stakeholders and Expectations
The key stakeholders for the construction management function were leasing, property management, and the corporate office. The expectations for each stakeholder group were as follows:
Leasing’s Expectations:
- Complete the construction efforts within the available budget
- Demonstrate how the tenant improvement (TI) process can help Leasing sell more space
Property Management’s Expectations:
- Ensure tenants are able to move into their space by the agreed-upon move-in date
Corporate Office’s Expectations:
- Improve performance against key value drivers of quality, cost, cycle time, and leasing success
- Reduce costs in each category (materials, services, etc.)
- Track metrics that closely tie individual performance on TIs to corporate success; in turn, use these metrics to manage and improve the construction management function in their region
Performance Indicators
Focusing specifically on the role of Senior Construction Managers (who have overall responsibility for the construction management function in each region), the existing performance indicators defined in their job description were to: (1) administer the Tenant Improvement process for the Region as well as serving as a ‘Player-Coach’ to the Construction Managers in the region; (2) find creative ways to support regional occupancy targets; (3) reduce the cost and improve the efficiency of the TI process; and (4) improve overall customer satisfaction scores on the TI process. Overall, the performance indicators outlined in the job description appeared to be consistent with stakeholder expectations. However, training and communication efforts were necessary to help clarify the detailed “how to” aspects of their performance expectations.
Performance Discrepancies
Per Mager & Pipe, an important first step in assessing performance discrepancies is to identify the “difference between what is being done versus what is supposed to be done” (1970, p. 9). When I began working with this group in 2003, their current performance levels—i.e., how people were performing—needed improvement. Late move-ins had cost the company significant dollars and was significantly hurting relationships with tenants. On average, the company had been late on move-in dates, hurting both the company’s reputation and its bottom line. In addition, there were inconsistencies in process and a need to have consistent expectations and approaches across the regions.
On the other hand, the desired performance—or what was supposed to be done—was to have them (1) follow a consistent process for each TI job; (2) use metrics to manage the construction management function; (3) handle the pressure to keep TI costs down in a way that helps the business and their role within the leadership team; and (4) manage the performance of those that report to them, identifying and appropriately addressing performance discrepancies. This comprised the specifics of what the Senior Construction Managers (SCMs) and the construction management function needed to do to close the gap between current and desired performance. Closing this gap would enable them to fulfill their stakeholders’ expectations.
Further utilizing some of Mager & Pipe’s (1970) performance analysis steps, it was further determined that resolving this performance discrepancy was very important to the company. The discrepancies were due to genuine skill deficiencies (not other organizational factors). In addition, looking to whether or not the SCMs could perform in the past, these performance expectations were not something they were doing before. However, the SCMs did possess some transferable skills that would be useful to their updated performance expectations. These transferable skills included: (1) construction and project management background/experience; (2) understanding of corporate initiatives, priorities, and overall firm direction; and (3) initial familiarity with current report suite, metrics, and compensation system.
However, in comparing desired performance with actual performance, there were a number of significant performance gaps where new skills needed to be developed. This included the need for (1) a new and consistent TI process; (2) experience with formal reporting on TI; (3) exposure to metrics that closely tie individual performance on TI to corporate success; (4) practice in performing data analysis and action planning based on data results; (5) awareness/acceptance of what made them successful before vs. what will make them successful now; and (6) a disciplined method for managing direct reports.
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With the SCM’s performance analyzed, it was time to move on to identifying the causes of the performance gaps. My next post will explore what we did to determine the extent of the problem, how we pinpointed the reasons for the gap, and what nontraining and training strategies were selected to fill the gaps.
References:
Mager, R. & Pipe, P. (1970). Analyzing performance problems. Belmont, CA: Fearon Pitman Publishers.
- Robin
Copyright Robin Donnan 2007. All Rights Reserved.
Performance Associates, Inc.
