Measuring and rewarding individualsPosted: December 10, 2008
At the SOL conference some time ago I attended the workshop by the brain researcher Kiti Muller and happened to mention how harmful measuring and rewarding individuals is.
It rose huge interest, so here you have the reference – Robert D Austin: “Measuring and Managing Performance in Organizations, Dorset House, 1996.
Just to brief some points of the book:
Measuring and rewarding individual performance, especially a knowledge worker, is always distorting the performance, and is potentially dysfunctional.
Dr Austin acknowledges, that measuring organization is essential, and gives advice for constructive measurement too. Unfortunately it is difficult.
Here a brief of one critical flaw in rewarding based on individual performance:
To create value the knowledge worker does A, B and C. His/her knowledge of the detail enables balancing these.
The manager is able to:
- know and measure A
- know B
- don’t even know C
C is truly significant. There are a zillion small real decisions, that gradually make reality.
With all good intentions the manager measures only A. He might understand that this is only an indicator. Result:
- People game. Even some that don’t game in the beginning, gradually will. A will get done in excess, even to dysfunctional extent. There are zillions of cases, even extreme. Like measuring volume of sales instead of profit. Just imagine the result.
- The working relation narrows from co-operation to trading, degrading commitment.
- This kind of power setting suggests, that the manager knows better, and the knowledge worker should NOT use judgement. Subtle, but very powerful and harmful, reinforcing the command and control culture.
Measuring is necessary, complex and dangerous. In principle, rewarding teams and organizations based on throughput time, customer loyalty and business is healthier. Mary Poppendieck has some advice in her books and webpage.