If we take business performance and success seriously, we need to know how the organisation is performing, and not just guess or assume. That means measuring. But too many businesses think measuring performance means measuring staff. They believe when staff are measured, they perform better and that when staff perform better, the business performs better. But there’s a flaw in this logic.
Why we need to rethink staff measurement
UCLA professor Samuel A. Culbert and co-author Lawrence Rout have put this logic under the microscope in their book Get Rid of the Performance Review! They sum up the flaw in the logic quite bluntly:
“This corporate sham is one of the most insidious, most damaging, and yet most ubiquitous of corporate activities. Everybody does it, and almost everyone who’s evaluated hates it. It’s a pretentious, bogus practice that produces absolutely nothing that any thinking executive should call a corporate plus.”
Measuring people does not improve business performance. Often not in the short term and rarely ever in the long term. That’s not to say staff performance should not be evaluated and improved, and it’s not to say that staff can’t be accountable for business results. But a new logic is needed about the relationship between staff performance and business results.
Measuring staff encourages the opposite of what’s needed
The way performance measurement and performance improvement are practised will have a direct impact on the culture that emerges. When KPIs and metrics are used to manage staff performance, it actively prevents a high-performance culture because it directs staff attention to self-preservation and not to creativity, innovation and collaboration – exactly what’s needed for improving business results.
In their book, Measurement Madness, Dina Gray et al. note how often “people focus on the measure at the expense of the real objectives of the organization”. This results in gaming the measure through data manipulation, or gaming work practices to hit targets. For example, in one instance, delivery drivers were deliberately failing to deliver goods on the first attempt, because the KPI they were rewarded for was the number of attempts to deliver.
If we want a truly high-performance culture, we need a fundamental shift in the relationship between measures and people. We need a fundamental shift in our definition of accountability.
Accountability is about behaviour, not hitting targets
When accountability is framed to drive the right behaviour, it can create a performance culture. Rather than holding people accountable for hitting targets, instead we can hold them accountable for three specific behaviours:
- The first behaviour is that they directly measure and monitor the important results for which they are responsible, like problem resolution or accuracy of advice or eliminating rework.
- The second behaviour is that they validly interpret the measures they own, analysing objective feedback about how their results are changing over time.
- The third behaviour is that they initiate action when it’s required, to work on their processes –not just in them – to improve their results.
KPIs or performance measures play a central role in this model of accountability, but a fundamentally different one to the old model. Rather than monitoring how staff are performing, measures are used to monitor process results and diagnose how to elevate process performance. Staff can then embrace accountability as the practice of problem solving, not judgement or blame. Ownership and transparency will increase and performance will improve.
Stacey Barr has authored two books on business performance measurement and KPIs.
