For the third year in a row, Operations executives responding to our Executive Outlook Survey said that improving process efficiency is their top priority. While this is certainly important news, I am more interested in the changes in focus and performance the survey revealed. After improving process efficiency, 20% of executives said their biggest priority is improving staff performance, an increase of 3% over last year.

Despite the increased executive focus, this is one of the areas at which organizations are most significantly underperforming. The interesting nuance to this story is that while almost one quarter of respondents said their organization is underperforming in staff work quality, only 13% said they are underperforming in staff productivity. This is a 1% increase in executives reporting quality underperformance when compared to the second half of 2009, and a 13% decrease in underperformers for productivity.

Why the divergence in performance? In 2008 and 2009, the financial services sector experienced historic workforce reductions as a result of the global recession. Suddenly, Operations departments were forced to do the same amount of work with a significantly reduced work force. As a result, employee productivity increased significantly, but the quality of work being done suffered. In our survey, employee work quality was one of only two key operational areas where executives reported deteriorating performance.

Many organizations have resigned themselves to this quality-productivity tradeoff, but our recent research suggests the trade-off is easier to break when addressing team-level as opposed to individual performance. Access our webinar replay, Balancing Employee Productivity and Quality, to learn how leading organizations break the tradeoff by setting balanced performance standards, incenting team-level performance, and facilitating best practice sharing.