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By Steve Kelman

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The performance measures that managers hate

Shutterstock image: businessman relaxing and looking at digital graphs.

As many blog readers may be aware, I have long been a fan (perhaps even a fanatic) when it comes to the use of performance measures to manage in government. Performance measures can be used effectively to improve an agency's performance -- by motivating staff (there is a huge literature showing that people's performance is better when they have a specific, ambitious goal); by focusing their efforts and steering them away from lower-priority areas; and by providing data that can be used in a feedback cycle to learn about shortcomings and see if changes made in response to problems have produced improvement.

Private-sector managers routinely use metrics in the daily management of their organizations' performance. Government would be working considerably better if we did this as well. I have regularly taught about using performance measurement in Harvard Kennedy School executive education programs, and, now that I am (as of two weeks ago) back to teaching after my illness, I have been lecturing on this topic again.

Nonetheless, even an enthusiast like myself realizes that poor performance metrics can have dysfunctional effects. The most common kind of problem involves what Michael Barber, who ran the aggressive performance measurement effort under British Prime Minister Tony Blair almost two decades ago, has called "hitting the target but missing the point." This refers to a situation where achieving a good score on the metric doesn't actually improve the organization's performance, because a good result on the measure is not associated with meeting the underlying goals the measure is supposed to further.

In such cases, the metric can cause everyone to run in the direction the measure directs, but that can just mean that the lemmings are marching together over a cliff. At the same time, metrics don't need to be perfect to generate improved performance -- managing to imperfect metrics is often better than managing to no metrics at all.

At the end of the three classes I recently taught on this subject, I invited the students to reflect on what they had learned about metrics -- how they can be a powerful tool for performance improvement but also how they can create misdirected effort. To make their thoughts more concrete, I then asked them to think of a flawed measure being used in their own organization, and to decide whether they thought it should be abandoned (and, if not abandoned, how it could be improved).

When I asked the question, I only had time in class to hear from three participants, but, within the constraints of this very small sample size, their responses were telling. All three named a performance measure that had they had been directed to track by somewhere higher in their chain of command. In all three cases, the participants stated they would like to scrap the metric entirely, but added (not surprisingly) that given the source of the metric, this was not possible.

Whenever I discuss performance measurement with government managers, I emphasize that they should see this not as something being done for "them" -- overseers, Congress, their internal chain of command -- but for "us," the working managers out there trying to deliver a product or service. Federal managers routinely complain, with reason, how few management tools they have available, compared with their brethren in the private sector, to influence the behavior of those working for them. Managing with performance measures is a potent tool that is already available. But any new way of doing business needs to run a gauntlet of suspicion on the part of hardened managers.

For this reason, it's important to allow the managers themselves to help set the metrics. Sometimes, obviously, the higher-ups will want agency managers to track a performance metric the managers themselves don't like. But whenever possible, I think that outsiders should hesitate about being too quick to impose a specific metric on an organization. We want managers to have as much ownership of their metrics as possible, and imposed measures take that sense of ownership away.

Posted by Steve Kelman on Jan 28, 2016 at 8:05 AM

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Reader comments

Fri, Feb 5, 2016 Jimosaurus Richmond,VA

"Performance measures can be used effectively to improve an agency's performance -- by motivating staff..." While that may be true, in our government, they are not. The majority of coworkers I work with are career government workers and have never held a position in a REAL company. The metrics being measured have no correlation to the job being completed. Even if you "Busted Hump" the best you could hope for is a minimal raise and a piece of desk bling. Job recognition doesn't pay the bills. Ergo, there is no motivation to do more than try and keep your job.

Sun, Jan 31, 2016 Josh Gotbaum

The notion that managers should not set metrics for their operations is a fantasy. As one commentator pointed out, nowhere in business are standards set by those whose performance is being measured (unfortunately, non-profits generally don't follow this rule). In fact, I think double entry bookkeeping was devised to ensure that no one person could both do and measure their performance, The history of performance measurement in the federal government is replete with people setting measures that they know they can achieve. At first, these were input measures (b/c, of course, people couldn't be held responsible for results in an uncertain world). In my experience, imposed metrics are the ones likeliest to matter. Performance measurement should of course be widely discussed with those whose performance is measured. Nonetheless, as the US Senate frequently reminds us, there's a difference between "advice" and "consent".

Fri, Jan 29, 2016

As long as there is red tape to get anything done in government there will be shortage of getting things done. Micro-management is not the way to go either. The public as tools yes but they also have bonuses that allow them to give to there employees on how well there company does. They get overtime paid or comp time time and a half off when they have to work over. What do we get well it is expected of you, wow what a statement, more like more crap to our ears. You can sit up there on that high horse and make all this changes but until you apply apples to apples and oranges to oranges, then you might get the lemonade your are looking for. I hear everyone saying the same thing over and over, remember the old days when you did your job and did not have thousands of paper work or data entries to "CYA", cause someone upstairs decided we had to do that. Most of them are saying let me just get to my retirement requirements and let me get our of here. The stress and long hours cause of short man hours and micro-management is driving good employees away. Most are starting there own business or going home to get there health back. Is that what we have to look forward for retirement, most government employees do not have life time appointment and get paid to sit around and make comments about how great life is, they have to still do part time jobs to be able to enjoy some life or what health they have.

Fri, Jan 29, 2016

Did Mr. Kelman write this post because a performance measure motivated him to do it? Human beings do not need to be goaded into action by targets. It does not matter how much you sweeten the pill, workers will always see them for what they are: carrots and sticks. This is then DE-motivating, not motivating. It is a shame that both Kelman and people like Barber think that the best way to make workers do something is to return to (the errors of) the Benthamite past. We all need to have much greater faith in human beings.

Thu, Jan 28, 2016 Jeff

Steve, what proportion of private sector managers get to choose what proportion of their own metrics? My sense is that some get to participate in setting some, but none gets to set all. Further, I perceive that there's a conflict of interest in setting the metrics (and targets) by which you yourself are measured. I always think of Wall Street earnings reports. Companies pretty much have to live with reporting the metrics Wall Street expects (GAAP profit, Return on Equity, market share, etc.). And, what's more the positive spin by the company doesn't mean that it met the target of Wall Street analyst expectations. That's what makes these private sector measures powerful - you can't game them.

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