Performance Contracts and KPIs

Choosing measures that survive contact with reality

A performance contract is only as good as its measures, and most landscape KPIs fail because they cannot be assessed without an argument.

The test for any proposed measure is whether two people would reach the same number independently. Water use from a meter passes. Complaint counts pass. Response times pass. Overall appearance does not, unless it is scored against written zone standards.

The second test is whether the contractor actually controls it. Holding a contractor to a water figure on a property where a building leak is on the same meter is measuring something they cannot affect.

A small number of measures that pass both tests beats a long list that does not.

The scored walk, which does most of the work

Appearance is usually the point of the contract and the hardest thing to measure. The workable method is a scored walk done monthly by both parties together.

Each zone is scored against its written standard, on a short scale, and the score is recorded. It is not perfectly objective, and it is enormously better than an impression formed while driving past.

Doing it together is what makes it work. A score assigned unilaterally becomes a dispute. A score agreed on site, with both people looking at the same bed, rarely does.

It also produces a record over time, which is where the real value sits. A property that scores consistently in one zone and poorly in another has information that no amount of general dissatisfaction provides.

1. Write zone standards that can be judged in ten seconds
2. Walk monthly, together, with the standards in hand
3. Score each zone on a short scale and record it
4. Note specifics on anything below standard
5. Track the scores over time rather than treating each month separately

What happens when a target is missed

A performance contract with no consequence attached is a task contract with extra paperwork.

The consequence does not have to be financial and often works better when it is not. A cure period, an escalation to a named person, a required written plan, and only then a financial mechanism, is a sequence that fixes problems rather than simply pricing them.

Financial penalties have a specific failure mode: a contractor who has already accepted the penalty stops trying to meet the standard, because the cost is now known and paid.

The other half is the upside. A contract with only penalties invites the minimum. Where a measure genuinely matters, a shared benefit on outperformance produces more than a penalty on underperformance.