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Measuring the Right Things

Recently, one of our staff witnessed two examples of managers trying to provide performance feedback to employees. In both cases management was correctly focused on improving customer results; however, the contrast in terms of impact on results was significant. This reminds us that while providing frequent, customer-based, and accurate feedback is necessary, determining the right measure is essential.

  • Example #1. When I arrived at a famous fast food restaurant recently there were about 15 customers standing around the counter waiting for their food. I hesitated, not knowing who had ordered, and who had not. They ALL had, so when the clerk said, “I can help who’s next,” it was my turn. I noticed that the cash register displayed the message, “AVERAGE SERVE TIME: 17 SECONDS.”

    “Wow,” I thought. “That’s pretty fast!” Then I ordered, and sure enough, within about 15 seconds, I had my change, and the clerk moved on to take the next order. In fact, it appeared that ALL of the orders and money transactions were taking very little time. But 10 minutes later, I still did not have my food.

    One by one, the other 15 customers were served, and while I waited, I saw three different customers return to the counter to complain about incorrect orders. Apparently, in an effort to speed up service, the fast food chain’s management decided that measuring transaction times (and giving prizes to stores with the fastest times) was a good idea. NOT. By measuring the wrong thing — AND by tying an incentive to it — management has actually worsened service. It takes longer to get food, and more mistakes are being made in filling the orders.

  • Example #2. Just hours after my “fast” food experience, I visited a big box retail store, and happened to pass by the employee break room. On the bulletin board outside the break room was a large neon sign with this handwritten message: “CONSECUTIVE INJURY-FREE DAYS: 187!”

    This struck me as an odd thing to measure so prominently, until I thought about it. Injured workers miss work, causing schedule complications and short-handedness. New workers must be recruited, then hired, and then trained to fill the gaps. Workers’ compensation insurance isn’t free, and payouts for claims or increased insurance rates increase costs. And we won’t even count the frivolous work comp injuries that often get reported in places like this. Suddenly, INJURY- FREE DAYS didn’t seem such an odd thing to measure.

    This is a place where people are cutting boxes open with razor-sharp blades, lifting very heavy things, hoisting those very heavy things onto and off of high shelves, using heavy power equipment — subjecting themselves to potential injury every day. And these people hadn’t had an injury in over half a year!

    And the impact was not just confined to their being safe. I realized that nearly every employee was familiar to me. I saw a shelf stocker instantly direct a customer to a requested item. I watched the checkout clerk process order after order — cash, credit, debit, gift cards, coupons — without a single error or call for a manager. Every shelf was fully stocked, there was no clutter in the aisles and the place was spotless. In fact, the whole store was purring along like a well-oiled machine.
These two instances are instructive. In both cases, managers measure and provide prominent feedback on specific results — but in one case results declined, while in the other they improved.

Contrasting these two experiences points to some guidelines for providing feedback on results. First, feedback is a planning issue for managers, not just a monitoring or systems issue. For Example #1, the real-time system displaying transaction times provided immediate and accurate feedback, but the feedback was irrelevant to customer service — and may have actually distracted employees from serving customers quickly and accurately. Think carefully about what is critical to measure based on the required outcomes for success. Don’t measure and report something just because it is easy to capture and/or report — and don’t ignore something that is critical and relevant just because it is hard to measure.

Second, remember that when managers measure the wrong things (and even more so when they involve incentives), the people doing the work will place importance on the wrong things. Decent, honest people will even game the system to get the incentives without accomplishing the work. If you are lucky, feedback on irrelevant measures will simply have no impact — but often it misdirects people’s focus, resulting in unintended consequences like slower service and higher error rates.

Finally, don’t underestimate the impact that relevant, consistent feedback can have on overall results. Efficiency increases. Effectiveness improves. Waste and unnecessary costs evaporate. Example #2 illustrates this well.

Think about this the next time you measure something at work, and provide feedback. If you can’t directly connect the feedback to people’s ability to improve results — think it out again! Providing feedback on the wrong things just might undercut what performance you ARE getting.


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