If It Can Be Measured, It Can Be Manipulated

All aboard the metrics-go-round! Ready, managers? Here’s how it works:

  1. You set goals and create measurements (“metrics”) for your people’s behavior. Of course you tie their pay, performance evaluations; indeed their continued employment to hitting your numbers. Of course!
  2. Some of your people dive into hitting these goals with gusto. Some figure out the metrics and decide it’s easier to manipulate them than it is to do the work you want, so they play the system you’ve created to measure their behavior. Cheeky workers!
  3. The compliant ones look at all the praise, bonus pay, and promotions their “cheating” coworkers are getting and they feel envy. Plus, they start to fear for their jobs, because the cheaters have inspired you to raise everyone’s performance expectations.
  4. Now many people are cheating. A few have quit in disgust, or transferred into business units that are less metrics-driven. A minority is working its collective tail off to hit your numbers. They find their jobs too hard, and learn to hate your company, or at least your business unit. The last slice of “ethical” workers, who can’t hit these lofty goals and who refuse to cheat, are now in danger of losing their jobs – or at best, they’re missing out on all the recognition. Strangely, this group comes to hate your company, too. (People are so weird!)
  5. So here you are, with most of your staff playing the system instead of doing what you wanted them to. The gall! So you work up all sorts of creative ways to monitor their behavior more assiduously. You also offer them an ethics course, because clearly their parents screwed up.
  6. That works a little, but your workers sure are shifty, and in no time they’ve figured these new controls out, too. So you scrap those metrics, and introduce a whole new set of behaviors you want them to perform and metrics by which you’ll measure them.
  7. …And we’re off, riding the Metrics-go-round again! (Return to #1 and start reading).

Where do all these crappy, unethical employees come from? Maybe, in addition to your mandatory (of course!) annual two-hour ethics class, you should change the metrics of your recruiters, so they’ll recruit more ethical employees. Or hell, maybe workers just suck, as a class. You can’t trust people to do what’s right, can you?

Does any of this sound familiar? Does all of this sound like exactly what your role as a manager consists of?

I’ve been observing leaders and organizations for a long time now, and this is what I’ve found: leaders basically fall into one of two groups.

In the first group are those leaders who swear by metrics and swear about their unreliable, childish workers who need to be controlled.

The second group consists of leaders who hire mature, responsible adults and treat them as such. These leaders don’t really think much of metrics. They’re more interested in buy-in and results.

Which kind of a leader are you?

 

*The title of this post comes from a recent spontaneous Twitter chat. I wish I could remember who said this; alas, it wasn’t me. I’m not that succinct, I guess. Some day!

 

Read Return on Morale for the first in this series.

 

Photo by Cheesy42

Ted Coiné is a Forbes Top 10 Social Media Power Influencer and an Inc. Top 100 Leadership and Management Expert. This stance at the crossroads of social and leadership put him in a unique perspective to identify the demise of Industrial Age management and the birth of the Social Age. The result, after five years of trend watching, interviewing and intensive research, is his latest book, A World Gone Social: How Companies Must Adapt to Survive, which he co-authored with Mark Babbitt. An inspirational speaker and popular blogger, Ted is a pioneer of the Human Side of Business (#humanbiz) movement. He is also a serial business founder and three-time CEO. When not speaking at conferences and corporate functions, Ted advises CEOs on how to become Truly Social Leaders, or “Blue Unicorns” as they put it in A World Gone Social, in order to bring their companies into the Social Age. Ted’s advice: “Change is only scary if it’s happening to you. Instead, bring the change your competitors dread. That is something only a Social Age business leader can accomplish.”

  • For me I lean towards #2. Though you do need some kind of metrics to know if we’re on track.

    The ones that get caught up in the numbers game are justifying what they’re trying to do. They’re not leading.

  • Your merry go round suggest the need for good metrics as opposed to having no metrics. Unfortunately your option 2 wil always beg the question ‘can you define the results?’. For leaders who are single minded about results the answer is always ‘turnovers’ or ‘sales volume’ or ‘ output’ and of course these are just metrics that drive behaviour too. The other risk in option 2 is that it relies on the leader to see and decide on good behaviour. Unfortunately for most this equates to ‘be like me’ and can also lead to a boss focused culture as they have the power to reward at will.

    Metrics are never the full solution and nor are no metrics. Good managers set metrics for things that need measured to drive business activity. The key is to set good ones and to root out manipulation.

  • I love this post. It definitely reminds me of my 10+ years in retail. When I began my retail management career I think I was definitely in group 1. After about 3 years of that style I started thinking more on the lines of group 2. Group 2 is definitely one which empowers their staff and ultimately gives a better experience to the consumer. This group won’t get the accolades from the company that group 1 will; however, they will win the hearts of the consumer. In the end that is all that matters.

  • Two thoughts on metrics (which are very useful, but often abused):

    Be careful about what you measure, especially if you are the leader.

    When people review their measurement achievements ask only what was learned from getting there. This applies to both under and over achievement. Reward both types of achievers on their ability to convert the learning into action.

  • Hi Ted!

    Enjoying your blog, and appreciate this topic in particular.

    While I would certainly agree that treating employees as untrustworthy children will usually produce employees who are untrustworthy children, I would also suggest that metrics do help to set an expectation for measuring successful process goals.

    Accountability is an external measure of performance and effort. What is difficult to measure (and so VERY important to find and hold onto) are people who claim ownership, which is an internal acceptance of responsibility for the results you mention.

  • Peter A Hunter

    Why act surprised?
    W Edwards Deming said over thirty years ago, “If you set people targets those targets will be achieved, even it destroys the organisation doing so.

    The only way to avoid this situation is not to set targets.
    So how do we know what is going on or what has been achieved?

    Simple, ask the workforce what they consider to be their optimum performance.

    When we set targets they are rarely achieved.

    When we allow the workforce to set their own targets we invariably find that they set them higher than management ever dreamed possible, and they are almost always achieved.

    Peter A Hunter
    http://www.breakingthemould.co.uk

  • Ted, I just loved your deadly sequence of events It’s exactly what happens.

    And Daniel Pink has written a great book “Drive – The surprising truth about what motivates us.” reporting on the science coming to the same conclusion, as you: Metrics as basis for incentives or as basis of pay won’t work. Pink also offers a clear view into the science to what actually works in terms of employees motivation and improving performance, or at least not undermining it.

    There is a mismatch between what science know and how business works. Carrot and sticks doesn’t work for 21st Century tasks, that require problem solving and creativity in an ever-changing workplace. It is time that corporate world catches up with the science.

    For the short attention spanners (who read books anymore? ) two video links:
    Daniel Pink’s TedTalk http://www.ted.com/talks/dan_pink_on_motivation.html

    Here the link to a summary of his book:
    http://www.youtube.com/watch?v=u6XAPnuFjJc

  • Ted,

    Great post. I used to work for a large service organization that had several call centers. The employees’ work lives were scheduled to the hilt– even their bathroom breaks were timed. It was like, “Too bad if it’s 10:00 AM and you need to pee; your break time is at 10:22 AM and you get six minutes. No more, no less.” Managers often said to me, “Jennifer, you don’t understand the nature of the call center employee; many of them act like immature babies.They need this structure. Besides, this is the way it needs to be; our customers demand that we have this level of response time.” It frustrated me to no end; in my mind, they acted like babies because they were TREATED like babies.

  • Metrics don’t usually measure quality, just “quantity.” For example the object might have been to reach $1 million in sales. The rep does that but totally destroys any future sales by the focus on his goal rather than the customer’s needs.

    Personally, I’m sick of auto dealers asking me to give them a “10” on their telephone surveys. They’re just gaming the system.

  • I somewhat agree. I take full credit for the staff that I have hired. There was one in place inherited from a previous “regime”. They were fed stats, they were praised and punished by stats. They learned how to manipulate the stats in order to stay above radar. This wasn’t helpful with austerity measures that didn’t allow for merit increases. I have tweaked the metrics (slightly) and have had more sit-downs with staff, discussing their concerns, my concerns and the direction in which we are heading. If it’s once per week, once per month or once per quarter, I have found that the interaction that you have can be more effective than any statistical analysis of job performance. It’s a frank conversation. It’s a pat on the back. It’s a sounding board for venting frustration about the obnoxious co-worker in the next cubicle. They buy into what you’re trying to do. The more personal accountability, the less they “cheat”.

  • I strongly identify with the second group of leaders. I work in a field that is focused heavily on the creation of the intangible (ideas, public policy, etc.) rather than the creation of the tangible (goods, products, etc.) The HR people in my field, though, tend to ignore this distinction, and, as a result, I am encouraged to approach things that I consider to be quite subjective (like employee performance management) from what I see as an overly-objective point of view. I can’t easily quantify or measure how cooperative or conscientious an employee is. I just “know” it, based on observation and experience.

    I think the efficacy of an overly quantitative, “objective” approach to management declines precipitously when one is managing people tasked with producing ideas rather than things. I think nearly all of our so-called “objective” criteria are still subjectively constructed, and that an over-reliance on the measurable can sometimes be a crutch to absolve us for the personal responsibility that comes with having to make difficult decisions. Some of my discomfort with the overly analytical, overly-quantitative approach to management is probably due to my marked MBTI preference for iNtuiting over Sensing and Feeling over Thinking.

  • Ishwara Bhat

    Glad to see this post and the comments. As you all mentioned, if metrics are measurable they can be manipulated. The extent of manipulation depends on the stakes involved. When metrics are over-used and stretched beyond its context, people have no option but to manipulation. I think manager should be cautious on the kind of message he sends while using the metrics. Metrics should be used to decide the direction, not as fully objective and universal truth.
    This is the point I am making in my blog below.
    http://midmanager.com/4-foolproof-tips-for-effective-metrics-based-management-reviews/

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  • Sheila B Robinson

    Reminds me of a friend’s former employment situation. He was working on a production floor, assembling “widgets.” With a strong work ethic, he assembled each widget carefully, ensuring he used the correct parts and put the widget through all appropriate tests before packaging and shipping it. Needless to say, this took some time. His unethical coworkers assembled, packed and shipped many more widgets than he, and unfortunately, the metric used for employee reviews (and of course, raises) was the number of widgets assembled and shipped. The thing is, the other employees used wrong parts (it was faster), and skipped testing, or simply shipped widgets that did not work. These widgets would later be returned to the company for repairs. My friend, with his lower rate of production, had a 100% record when it came to his units working. Not one was ever returned for repairs. This metric, however, was ignored, and my friend suffered poor reviews and was denied raises, even though the leaders knew his units were perfect! “We can’t help it,” his bosses said. We go by how many units go out the door. Period.” My friend refused to compromise his dedication to quality and eventually lost that job. Ugh!

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