Medication and medical procedures have side effects. Side
effects can be harmless (too much niacin can cause blushing) or serious
(statins can cause muscle damage). These medications work within the complex
chemistry of the human body, and how a person will experience a side effect is
unpredictable.
Talent measures are not that different. They work within
complex human social systems, and they alter these systems—often in unintended ways.
In other words, they have side effects. The side effects most often affect motivation.
There are many ways to increase organizational performance. Many are effective, few are ineffective. And a few can actually damage the organization. Measurement falls into this last category. Because measurement can have negative outcomes, it is worth knowing how these results come about and how they can be managed
There are many ways to increase organizational performance. Many are effective, few are ineffective. And a few can actually damage the organization. Measurement falls into this last category. Because measurement can have negative outcomes, it is worth knowing how these results come about and how they can be managed
When We Measure, We Expect Results
Talent measurement often has the goal of understanding,
motivating, or directing workforce performance.
This idea is summarized in the phrase what gets measured gets managed,
which is sometimes attributed to Peter Drucker. This
phrase is universally framed in a positive light—just measure and results will
improve.
The challenge is that this catchy phrase doesn’t consider
the complexity of human performance in organizations. We often measure to get a
reaction, but we expect the workforce to react in predictable ways. In reality,
measurement can have the intended, positive effect—increased motivation, aligned
effort, and focus—or it can have unintended negative
effects that result in counterproductive changes.
Every Measure Motivates
It’s important to remember that every measure has the potential
to motivate someone, somewhere. When you review marketing data to
decide which product should receive more investment, someone is motivated to
receive the investment.
Consider balanced
scorecards. Kaplan and
Norton developed the scorecard as a strategic learning and steering tool. The
scorecard is presented as a network of hypotheses that reflect strategy,
referred to as a strategy
map. The scorecard’s measures are intended to reveal whether the strategy
and operations are working. Essentially, the measures test the validity of executive
hypotheses and assumptions.
As with many measurement systems, the intent of scorecards,
at least initially, was to make decisions. Because each scorecard measure
reflects directly on a different function within the organization, however, every
measure will also motivate someone, somewhere in the organizational structure. In
fact, a balanced scorecard is a motivational system.
Regardless of incentives, balanced scorecard measures are
scrutinized at the highest levels of an organization. Part of the motivation
associated with scorecards is simply that people don’t want to look bad.
Some organizations have gone so far as to link scorecard
measures to individual executives. Simply reporting the measure makes the
executive responsible. Other organizations have formalized this motivation
system by developing cascading incentive systems that link the strategy of the
organization to departments down and across the organization.
I’ve helped organizations use scorecards this way, and generally
I see it as positive. It’s better to be deliberate in setting up motivation
systems, because allowing random motivation systems to emerge can be damaging.
Too often, organizations often proceed as if measures
intended to be used for decision making won’t have a motivational effect. In
other cases, organizations create measures with the intent to motivate, but
assume that the measure will only have the intended effect. It’s important to
remember, regardless of intent, that any measure will have motivational
properties.
Strange Motivations
There are endless examples of the unintended motivational effects of
measurement, also known as perverse
incentives. One well known example is called the “Cobra
Effect.” In British-controlled India, the government’s reward for every
dead cobra—a reward intended to reduce the number of deadly snakes—resulted, of
course, in people breeding cobras for income. A similar situation happened in
Hanoi, under French colonial rule. In this case, the government paid a bounty
for each rat pelt. Again, a program intended to exterminate rats instead led to
rat farming.
But don’t think we’ve gotten smarter. IBM faced a similar
problem when it decided to pay its programmers by the line. The programmers
responded, predictably, by increasing the number of lines they wrote in each
program. Instead of producing more programs, faster—the intended effect—the
programmers simply wrote more complicated, and less elegant, code.
In some colleges, professors are rewarded for high scores on
student evaluations. More often than not, this leads to easy courses and
inflated grades, rather than improved accountability. Academic researchers are
rewarded for a large number of publications. While the intent is to improve
research productivity, the result is often incremental papers and little
innovation.
In the K–12 world, teachers are being rewarded for increased
student test scores. Rather than improving education and teacher effectiveness,
the effects have been teaching to the test and an emphasis on short-term
learning.
Motivation and Measurement Are Personal and Social
The key to understanding these strange motivations is
remembering that each employee, manager, and executive experiences his or her own
context. Employees make meaning out of measures and measurement data, and they come
to their own conclusions based on personal comparisons,
context, and connotations.
Personal conclusions and insights can be difficult to
predict. All sorts of dysfunctional behavior can be observed in complex
organizations. There are always challenges: What matters to one individual is
often not what matters to the organization. It’s foolhardy to proceed under the
assumption that all the people involved—measure developers, the executive team,
employees—have the same worldview.
Many talent professionals assume that formal incentives,
such as pay and advancement, are the primary motivators for employees. But
there are other motivation systems have huge effects in organizations. These
shadow incentives exert a powerful force on individuals. Personal relationships and social structures matter in organizations. This is the
important conclusion of the Hawthorne
studies, which showed that employee behavior, and organizational productivity,
is strongly related to social contexts.
A Shadow Incentive System
About a decade ago, a large telecommunications
company started a program that encouraged repair technicians to develop their
troubleshooting skills, in part by pursuing an associate’s degree in
telecommunications technology. The company assumed that highly skilled
technicians would be better at fixing problems, and that their increased skill
would reduce the number of repeat service calls.
Despite the multi-million dollar price of the training initiative, repair technicians never repaired more than three phones a day. The company’s management, understandably baffled, hired a team of researchers to look into the problem.
The problem turned out to be shadow incentive system. An anthropologist joined the technicians in their trucks, watched their interactions, and found that the technicians had simply established a norm: three phone repairs per day. Anyone who worked faster was punished and shunned—serious disincentives. One technician who broke the rule had a tool dropped on his head by another worker on a pole above him.
This was the social element—team norms were strictly enforced. There was also a financial incentive. By reducing the number of repairs, the technicians were able to nearly double their income with overtime. The formal compensation and reward system simply didn’t matter. The shadow incentive system was much stronger. Ultimately, the program was discontinued.
What’s also interesting is that some workers weren’t consciously aware of the enforced repair limit. It took an anthropologist—an outsider—to see what was really happening. People often aren’t aware of the basis for their actions.
Understanding and building motivation systems requires insight on an individual and organizational level.
Despite the multi-million dollar price of the training initiative, repair technicians never repaired more than three phones a day. The company’s management, understandably baffled, hired a team of researchers to look into the problem.
The problem turned out to be shadow incentive system. An anthropologist joined the technicians in their trucks, watched their interactions, and found that the technicians had simply established a norm: three phone repairs per day. Anyone who worked faster was punished and shunned—serious disincentives. One technician who broke the rule had a tool dropped on his head by another worker on a pole above him.
This was the social element—team norms were strictly enforced. There was also a financial incentive. By reducing the number of repairs, the technicians were able to nearly double their income with overtime. The formal compensation and reward system simply didn’t matter. The shadow incentive system was much stronger. Ultimately, the program was discontinued.
What’s also interesting is that some workers weren’t consciously aware of the enforced repair limit. It took an anthropologist—an outsider—to see what was really happening. People often aren’t aware of the basis for their actions.
Understanding and building motivation systems requires insight on an individual and organizational level.
The Side Effect of Surveying Engagement
Many organizations now measure employee engagement with
surveys, share the results, and hope the information will encourage managers
and teams to improve. This feedback process is potentially positive and
powerful.
But conducting a survey—asking employees what’s wrong and how to make things better—can raise expectations. If the organization fails to make improvements based on survey feedback, the result can be the opposite of what was intended: lower morale. In these situations, survey results do little more than give dissatisfied employees something else to complain about.
In addition, managers and employees react to surveys and measurement according to their idiosyncratic worldviews. While one manager may work to improve engagement and expect her team to respond honestly, another manager may simply ask the team to rate survey questions higher, as a personal favor.
To manage the unintended side effects of surveys, we need to be aware of the expectations, strange motivations, and personal connotations that will inevitably come into play at different levels of the organization.
If we’re aware of these different contexts, and the survey is framed in a forward-looking agenda, the results can help management focus employees on the positive aspects of improving the organization
In practice, it’s best to formally assign executives responsibility for the measures. Assigning accountability is going to happen anyway. Formalizing this effect increases transparency and openness across the organization.
But conducting a survey—asking employees what’s wrong and how to make things better—can raise expectations. If the organization fails to make improvements based on survey feedback, the result can be the opposite of what was intended: lower morale. In these situations, survey results do little more than give dissatisfied employees something else to complain about.
In addition, managers and employees react to surveys and measurement according to their idiosyncratic worldviews. While one manager may work to improve engagement and expect her team to respond honestly, another manager may simply ask the team to rate survey questions higher, as a personal favor.
To manage the unintended side effects of surveys, we need to be aware of the expectations, strange motivations, and personal connotations that will inevitably come into play at different levels of the organization.
If we’re aware of these different contexts, and the survey is framed in a forward-looking agenda, the results can help management focus employees on the positive aspects of improving the organization
In practice, it’s best to formally assign executives responsibility for the measures. Assigning accountability is going to happen anyway. Formalizing this effect increases transparency and openness across the organization.
Must We Measure Everything?
One of the challenges in measuring employees is that good
measures are hard to find. If we’re going to evaluate a proofreader’s work, for
example, the only way to measure the quality of the work would be to ask another
proofreader. And who is going to evaluate the proofreader’s evaluation? Obviously,
we can’t have a perfect measure of everything.
The lesson here is, don’t measure for the sake of measurement. A bad measure
can create a bigger problem than not measuring at all.
If you can’t find a good measure, it might be worth looking
for another way to monitor and motivate performance. In the case of the proofreader,
you could consider surveying customers, who will have a sense of the quality of
work.
It’s worth asking the question: Do you really need a measure
for this, or are you measuring because that’s what people do?
Reducing Negative Side Effects: Managing Measures
As we have seen, measurement can lead to misalignment and
malfunction in an organization or, for that matter, a country. Perhaps we should
think about this differently: What gets measured needs to be managed.
To be successful, we need to manage both the measure and its meaning.
If we can be deliberate in setting up motivation systems, being aware of the possibility of perverse incentives, it’s less likely that random motivations or shadow incentive systems will undermine the organization.
For measures to have their intended effect, it’s necessary to manage the meaning and the context. As always, communication is the key to successfully using measures.
I’ll write more about building shared meaning with measures in the next post.
If we can be deliberate in setting up motivation systems, being aware of the possibility of perverse incentives, it’s less likely that random motivations or shadow incentive systems will undermine the organization.
For measures to have their intended effect, it’s necessary to manage the meaning and the context. As always, communication is the key to successfully using measures.
I’ll write more about building shared meaning with measures in the next post.