Productivity Metrics Motivate (Not Always for the Right Things)
BY Leigh Buchanan
Wharton management professor Matthew Bidwell talks with Inc. editor-at-large Leigh Buchanan about the nuances of measuring employee productivity.
A recent newsletter from the University of Pennsylvania's Wharton School addressed the lack of clarity over what constitutes productivity in an office. Among other commentators, management professor Matthew Bidwell weighed in on the problems with using "crude numeric tools" to achieve desirable behavior.
Inc. Editor-at-Large Leigh Buchanan spoke with Bidwell about the trouble with traditional productivity metrics.
Organizations place so much emphasis on people developing their intellectual capital. But there aren't a lot of tangible outputs for that. Does that discourage people's willingness to spend time on it?
Learning, developing intellectual capital, these things are very hard to measure. So are other desirable behaviors, such as helping people. And of course the more you measure those things that can be measured, the more attention people pay to that, and not to the things that are more difficult. Setting clear goals for people motivates and engages them. If you use metrics for those goals then the other things tend to get ignored.
So helping colleagues and other what you call "citizenship behaviors"--recruiting, mentoring etc.--are sacrificed to productivity metrics?
It's about tradeoffs. People see the costs of citizenship behaviors much more clearly because they see them as coming at the expense of exceeding their targets or whatever is being measured. So you have to ask yourself, as the manager, what is more important? In a lot of organizations you may feel helping is nice but not so critical to our success. In those cases, yes, I'm prepared to sacrifice some of those citizenship behaviors. In other environments you might make a very different judgment.
How do you encourage citizenship behaviors?
You can let it be known that [employees] will be rewarded. A lot of organizations have 360-degree reviews where they try and incorporate feedback from peers to get a sense of who is helping others. And there are some cultures where the expectation is if someone needs your help then you will give it. In those cultures people understand that there are sanctions for not helping. So you can never measure it as well as more tangible things. But you can certainly get a sense of it.
What you can't have are wishy-washy metrics of "people say this guy is very helpful," and then the hard dollars they brought in. It becomes very hard for organizations to resist the temptation to pay more attention to the hard dollars.
Do employees generally dislike productivity metrics?
I guess it depends, in part on what you are using them for. We know that people like feedback. Not necessarily performance evaluations--they hate those. But they like to know how they are doing. Productivity metrics help people say, "I had a good day today. Yesterday, I had a less good day."
That's especially true if rewards are tied directly to the metrics. Very high-performing salespeople who get high commissions are very, very focused on their productivity metrics. There's a lovely video we sometimes show in class of Nordstrom's highest-performing salesman. In it, he says it's all about I want to know exactly how much money I'm making each day, so I know what my paycheck is going to look like. In those kinds of jobs, productivity metrics actually help people get excited. In other jobs they might be a distraction.
I guess if the company doesn't have metrics then managers will just use their judgment about how an employee is doing, which can be problematic.
Most managers try to anchor their judgments to something. If they can't measure your outputs, they may measure your inputs, like whether you're staying late at work. We tend not to like those cultures, where what is important is that you are in the office, not what you actually achieve.
As a manager, talking about the quality of someone's work is hard. We can sit here all day and argue about whether or not something is high quality. Measures have objectivity about them. They make it much easier to justify a decision.
Are there some professions where metrics don't work--very creative ones, for example?
We think of academia as being this great haven of creativity. But it's actually quite metric-oriented. People want to know how many papers you have published, how frequently they have been cited, what are the student evaluation scores you have received. Scriptwriters might be evaluated on how much money their movie made or the ratings on their TV shows.
How do you help employees weigh productivity when deciding how to allocate their time? You probably don't want to say," quantity matters more than quality so don't worry whether it's any good."
Nobody is going to say that. People quickly get the message based on who gets the bonus, who gets promoted, who gets fired. It's much less a stated policy and much more what organizations do in practice.
Is there a correlation between individual productivity and leadership?
A lot of behaviors that correlate with productivity are going to be important in a leader as well. You want somebody who has the ability to focus on the task. You want someone with a goal orientation. Still, there are certainly people who are very good at getting things done but not so good at working through other people.
LEIGH BUCHANAN is an editor at large for Inc. magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture. @LeighEBuchanan