The output of a unit involves four measures: the output of each individual in the unit, the influence of the unit on other units, the output of other units influenced by the unit, and the contribution of the unit’s manager. Or stated simply:
Unit Output = A + B + C + D
where A = unit member output
B = influence by unit on other units
C = influence of other units on unit
D = contribution by unit manager
Keep in mind that output can only be measured by considering the results achieved. Activities such as defining, planning, scheduling, and controlling are simply activities that hopefully will yield a positive output. They add no value just because they’re practiced.
Consider the quantitative measurements for items A to D of the output equation. The quantitative part of A, the unit member output, can easily be measured in the finite terms of meeting objectives or meeting the three project requirements related to specifications, timeliness, and estimated cost. The objectives were either met or not met, without any rationalization or equivocation. If the activities of the individual unit members were integrated the unit should have met its objectives.
Let’s look at B and C of the equation, the interrelated influences, at the same time because both can be difficult to measure but important. Once again if the objectives and the three project requirements of each related unit are specified, it should be relatively easy to use the "yes" or "no" approach. The major difficulties arise when requirements of each unit are not clearly defined and communication somehow breaks down in the process. Changes made in one unit and not communicated to another lead the list of problems. Interaction of the unit managers now becomes critical. They must get involved in a timely manner.
Measuring the contribution of a manager involves measuring the contribution to the department and the organization. As noted previously, the manager will be responsible for more than managing the activities of the department since the organization will place demands for time spent on organizational activities. The manager’s performance in relation to the department can be easily measured. The department either did or did not meet the expected results. But the manager’s specific contribution to the output may not be as clearly defined as to allow "yes" or "no" responses.
Measuring the contribution of a manager to the organization may prove to be more difficult but can be simple if limited to the manager’s specific contributions without attempting to justify or rationalize them. The manager’s effort did or did not contribute to the organization’s program. Whether a particular organizational activity was successful may or may not be taken into consideration; the real question is whether the manager made a significant contribution to the organization. Sitting on a committee without making a contribution may be an activity, but unless that activity produces some specific results it adds no value. A manager’s performance, as an example, in improving the productivity of the organization’s administrative activities can be measured in the same way as that used for measuring the productivity in product genesis or distribution functions, as noted in The Seven Management Hats. The same principles apply: Objectives were met or not met.