The mismeasure of performance

We've been talking for the last couple of months about metrics: how to make them work for you, and what common issues to avoid. And there's no question but that they can be very powerful. Rightly applied, quantitative metrics can give you unparalleled insight into the behavior of a process, allowing you to fine-tune it to improve efficiency and eliminate errors.

If metrics can tell us so much about our processes and machines, it is only natural to want to apply them to our people as well. After all, if Fred is more productive than Max, isn't it only fair for us to know this, and to reward Fred accordingly? It seems like an obvious line of thought, and in fact many companies have some kind of performance appraisal system in place.

So it's interesting that a number of high-profile voices have spoken out against the whole concept of annual performance reviews. Jack Dorsey—co-founder of Twitter and CEO of Block—is famously against them. Perhaps more seriously, so was W. Edwards Deming, who identified annual performance reviews as one of his "Seven Deadly Diseases of Management."

What's wrong with reviews?

If metrics are generally so useful, and if the use of metrics to evaluate human performance sounds so plausible, what's wrong with it? Why are Deming and Dorsey—and others, to be sure*—so opposed to them?

Jack Dorsey By cellanr - ,
CC BY-SA 2.0, Link

Their main objection is empirical: Deming and Dorsey both observe that no system of annual performance reviews ever seems to deliver the benefits that it promises. On the whole, performance doesn't improve. (Indeed, over time it may degrade.) People go through all the motions, but no one's heart is in it. And in the end the organization is left doing no better than it would have done without these reviews.

That doesn't mean that either Deming or Dorsey wants to do away with feedback between manager and employee. Not at all. They just argue that asking employees to hit numerical targets is an unreliable way to generate feedback, and talking only once a year is far too little. 

• More precisely, Deming advises that 90-95% of an employee's performance is determined by the system and not the employee's individual initiative, so improvement efforts have to focus on making the system better and not simply on making the employees more zealous. He agrees that it is important for employees to feel motivated, but argues that the most effective motivations come from the work itself, and from feeling fully engaged by the organization's leadership.
• For his part, Dorsey recommends ongoing, real-time conversation between employees and management on how well the work is getting done, along with focused coaching where needed to improve an employee's skills in the moment. Why wait another eleven months if you can address the topic now and get past it?  

How can this be?

This is all logical, so where did our original line of thought go wrong? What's wrong with applying the basic logic behind metrics to measuring human performance?

The error came in forgetting the cautions we have already observed about the use of metrics, because every single one of them applies to this use case. 

• We can't measure everything, so we have to choose to track this instead of that; but every time we choose a metric, the choice has a hidden bias which will skew the results one way or another. 
• When people know they are to be rewarded or punished based on the outcome of a particular metric, they will optimize the metric at all costs, even if that means undermining the organization's larger goals. 
• And often there are critical facts which can't be quantified, and which are therefore left out of account by any metric. 
• With respect to this last point, it's true that you don't have to quantify everything, and that sometimes a very simple number is enough to give you the guidance you need. 
• But that's mostly true when the choices you have to make are very simple. Human behavior, though, is wonderfully complex and subtle; and for anything complex and subtle, the risk is high of missing it completely unless your measuring tool is equally subtle. 

All in all, managing human behavior with a numerical dashboard is likely to miss all the things you really need to know. 

So yes, measure your processes. Measure your tools. But when it comes to your people, talk to them instead. You'll learn a lot more that way. 

Maybe I can end with a definition I saw recently, posted online by the reliably-entertaining Ralph Aboujaoude Diaz:

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* See, purely as an example, this recent post in LinkedIn.