Against metrics: how measuring performance by numbers backfires - Jerry Z Muller | Aeon Ideas - Deepstash

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Against metrics: how measuring performance by numbers backfires - Jerry Z Muller | Aeon Ideas

https://aeon.co/ideas/against-metrics-how-measuring-performance-by-numbers-backfires

aeon.co

Against metrics: how measuring performance by numbers backfires - Jerry Z Muller | Aeon Ideas
More and more companies, government agencies, educational institutions and philanthropic organisations are today in the grip of a new phenomenon. I've termed it 'metric fixation'.

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Metric Fixation

Metric Fixation

Metric Fixation, an epidemic in most of the world's biggest companies is a way to measure employee performance primarily by numbers, counted, tallied, compiled and analyzed in daily, weekly or monthly intervals.

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Incentivizing Leads to Gaming

Incentivizing Leads to Gaming

The rewards of the metric performance measurement can be as a form of a monetary bonus, stocks or just an enhanced grade or designation, leading to competition among employees. This leads to many employees gaming the system to affect the bottom line of their metrics.

Example: Surgeons can refuse to treat patients having a complicated condition, as it may affect their failure rate.

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Ignoring Real Values

Ignoring Real Values

Metric fixation can make employees ignore the real values and goals of the company and focus on their short-term weekly or monthly goals so that they keep their jobs, get a pay raise or have their stock options out at the right time.

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Millions of Hours Lost

Millions of Hours Lost

On a macro level, metric fixation can lead to companies focussing on the quarterly report while ignoring any real R&D work, that takes years to provide any result.

Companies also suffer millions of hours of productivity loss due to employees maintaining performance records, a lot of expenses spent on recording and tracking tools, and the time it takes to read or analyze the numbers.

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SIMILAR ARTICLES & IDEAS:

Organizational Health

According to a decade long research, the health of an organization is based on alignment with a robust strategy, deep-rooted culture, and a clarity of vision.

The health of an organization ca...

Better Health = Better Performance

Extensive Data studies have found a link between the health of an organization and its performance.

Robust health is crucial to an organization's long term success.

The Four Organizational Recipes

Companies aligned with one of these four organizational recipes are more likely to be healthy and to deliver strong, sustained performance than those following random management styles:

  • Leader Driven
  • Market Focused
  • Execution Expertise
  • Talent and Knowledge-based

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The Peter Principle

The Peter Principle

It refers to an observation wherein people who perform well in their job gets promoted until eventually, they will reach a stage where they are incompetent for that job.

The Evidence for the Peter Principle

A study looked at promotions and performance of some 40,000 sales workers across 131 firms.

It showed that the best salespeople as measured by sales revenue are more likely to be promoted (top figure) but their value added as managers actually declines in their sales revenues (bottom figure).

The "Purpose" of Promoting Workers

  • To assign the suitable person to the managerial role.
  • To motivate workers excel in their current roles.

However, If firms promoted workers on the basis of managerial potential rather than current performance, employees may have fewer incentives to work as hard.

Why We Judge Others

There are many ways we choose to measure the value of our own lives, be it money or popularity of family or good deeds.

The way you measure yourself is how you measure others, and how you ...

Judging Mindfully

Traits we will not tolerate within ourselves, we will not tolerate in others. It is a choice we make. We should make those choices consciously and not without thinking.

It’s why corrupt officials choose to be corrupt: because they assume everyone else is as corrupt as they are. It’s why cheaters choose to cheat. It’s why those who can’t trust are the ones who can’t be trusted.

Recognize our own fixation

Recognize how you measure yourself and consciously choose your metric. Also, realize that everyone has their own criteria that will not be the same as yours.