Why measuring staff performance doesn't work

Too many businesses think measuring performance means measuring staff. They believe that when staff are measured, they perform better. And when staff perform better, the business performs better. But there’s a flaw in this logic.

Measuring staff performance doesn’t work

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 this 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. But that’s not to say that staff performance should not be evaluated and improved, and it’s not to say that staff can’t be accountable for business results. What’s needed is a new logic about the relationship between staff performance and business results.

Measuring staff drives the opposite of what’s neededMeasuring tape

The way that performance measurement and performance improvement is practised will have a direct impact on the culture that emerges. When KPIs and measures 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: Recognizing and Avoiding the Pitfalls of Performance Measurement, Dina Gray et al note how often “people focus on the measure at the expense of the real objectives of the [organisation]”.

This results in gaming the measure through data manipulation, or gaming work practices to hit targets. 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 true 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 hold them accountable for three specific behaviours:

  • The first behaviour is that they directly measure and monitor the important results they are responsible for, 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 action is required, to work on their processes, and not just in them, to improve their results.

Measures are a tool for staff to use, not a whip for management to crack over their heads

KPIs or performance measures play a central role in this model of accountability, but a fundamentally different one to the old model of accountability. 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 judgment or blame. Ownership and transparency will increase, and performance will improve.

Stacey Barr is a performance measure specialist.

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