1 Performance Metrics for Virtual Teams ETM5110/MSIS5600 Managing Virtual Project Teams Nicholas C. Romano, Jr., Ph.D. Paul E. Rossler, Ph.D., P.E.

2 Overview What metrics should be used to evaluate the performance of a virtual team?What metrics should be used to evaluate the performance of a virtual team?

3 ProjectProblemTask Collaborative decisions and actions Virtual Team Leader,MembersTechnologyStructureProcessFacilitation Virtual team management in the context of a management system (Based on Kurstedt’s Management System Model) IdeasInformationPerformanceProgress Idea organization, prioritization, consensus, contribution and progress Who Manages What is Used to Manage (Tools) What is Managed

4 ProjectProblemTask Measurement system design should start with what is managed What is Managed

5 Some questions to help define what is managed What is the team’s desired outcome(s) or objective(s)?What is the team’s desired outcome(s) or objective(s)? What level of quality and cost must its product or service (or outputs) possess?What level of quality and cost must its product or service (or outputs) possess? What key processes or activities are essential for producing this product or service?What key processes or activities are essential for producing this product or service? What critical resources are required?What critical resources are required?

6 What can be measured? InputsInputs –Knowledge, skills, abilities of team members –Are resources being used in efficient ways Processes, the essential activitiesProcesses, the essential activities Outputs, the products or services producedOutputs, the products or services produced –On time? Within specifications? Under budget? OutcomesOutcomes

7 Thamhain, H.J. “Effective Project Leadership in Complex Self-Directed Team Environments.” in R.H. Sprague Jr. and J.F. Nunamaker Jr., (Eds.) Proceedings of the Thirty-second Hawaii International Conference on System Sciences Maui, HI: IEEE Computer Society.

8 What should be measured? Decisions and actions to manage and improve performance Virtual Team Leader,Members Who Manages

9 Existing (team) meeting performance metrics TypesTypes PurposesPurposes TimeTime NumberNumber CostCost EfficiencyEfficiency ProblemsProblems

10 Measure Drucker’s Key Result Areas? 1.Market standing 2.Innovation 3.Productivity 4.Physical and financial resources 5.Profitability 6.Manager performance and development 7.Worker performance and attitude 8.Public responsibility Drucker, P. F. (1954/93). The practice of management. New York, HarperBusiness.

11 Measure Sink and Tuttle’s Seven Performance Criteria? 1.Efficiency 2.Effectiveness 3.Quality 4.Productivity 5.Quality of work life 6.Innovation 7.Profitability (Budgetability) Sink, D. S., T. C. Tuttle, et al. (1984). "Productivity measurement and evaluation: What is available?" National Productivity Review(Summer):

12 Measure perspectives found on Kaplan and Norton’s BSC? FinancialFinancial CustomerCustomer Internal Business ProcessesInternal Business Processes Learning and GrowthLearning and Growth

13 What information is needed to know whether the team is… EffectiveEffective –On schedule with respect to milestones, deliverables –Working as a team EfficientEfficient –Within budget Producing a quality product or serviceProducing a quality product or service ProductiveProductive

14 ProjectProblemTask Given the information needed, what data should be collected? Data on Project and Team Performance and Progress What is Managed

15 Deciding what (and how) to measure Identify Measures Define Measures Define Process Collect Data Analyze Data Present Info Evaluate Authoritative Consultative Delegative Participative Mgmt.Style Phase

16 Measurement system effectiveness tends to increase… 1.The greater the improvement orientation 2.The more that measures reflect what’s important 3.As involvement in measurement increases 4.As understanding, validity, and usefulness increase 5.The more measures align with meaningful rewards

17 Summary Measurement system design should start with what is managedMeasurement system design should start with what is managed What should be measured depends on what information is needed to manage performanceWhat should be measured depends on what information is needed to manage performance Measurement systems that are used primarily for the purpose of control tend to be less effectiveMeasurement systems that are used primarily for the purpose of control tend to be less effective