Are metrics always measured on Analog Scale (e.g. % or on a scale of 10)
Employees are hired to do specific tasks and are expected to perform specific activities by providing specific skills.
The season for goal setting is just a quarter away and the corporate HR is busy with setting a new metrics for its employees. During last 1 year, it hired no less than 3 renowned consulting company to overhaul its structure, and therefore role and responsibility metrics of its employees. Traditionally, per employee there would be a number of metrics that include delivery targets, safety, quality, new initiatives etc. Each one of these parameters would have different weightage ranging from 5% to 20%. Not surprisingly, employees, are in constant conflict and tend to get involved in mathematical calculation on where to focus to meet their performance numbers. Often excessive focus in one area leaves too less time to even engage in improving other performance parameters. It is often found that excessive focus on delivery led to poor quality and compromises on safety. And excessive focus on quality led to poor delivery.
The management said that Safety and Quality is company’s top priority; at the same time it said, “We need to increase the throughput.” Let’s look at how the company could deal this in a better way.
An organization has an objective. In order to achieve its objective, it must create and deliver value. Such value is normally indicated in terms of qualified products or services. Hence, the organization normally sets its goal to increase number of units of products or services on year on year basis. However, an organization also operates under certain ‘boundary conditions’. For example quality of product or service, safety of employees, environment conservation, local regulations etc. An organization is expected to achieve its goal by honoring these boundary conditions.
When an employee is measured, it is important that one is measured on parameters that one can influence with certainty. And, fewer the parameters better the measurement system and clarity in expectations.
One expert in organizational performance measurement from a leading Consulting Group, whom I met two weeks back in Chennai, threw a great deal of light on this.
He said that, it make sense to make delivery of work i.e. the goal unit as the performance parameter. Such a performance target can be easily be set by calibrating the current performance levels.
However, since safety is a boundary condition, the emphasis is on not having ‘any negative’ ramification. In a culture that promotes safety, it is either safe or not safe; nothing in between. Hence, the measurement scale for safety as applied to people who are linked to delivery would be not on the same scale or format. The metric should be to avoid unsafe behavior, hence it does not call for awarding safe behavior but it definitely calls for strict non tolerance principles for safety failure. Some experts say that people need not be measured by safety, they must be unmeasured by unsafe behavior (period)
And hence, in businesses like pharmaceuticals, where quality of product is closely linked to safety of consumer, organizations are not measured by their quality levels, they are warned or shut down for inadequate quality. We have ample examples on this…just visit FDAwebsite.
So, it seems that all metrics need not be measured in analogue scale. It is ok to measure delivery in % of targets. But boundary conditions must be measured on binary scale…i.e Zero or One… if organizations believe in what they write in their mission statements and append it with their commitment to health, safety, quality, environment.
(this is a draft post)
31 March 2014