More and more companies are using productivity metrics to measure employee performance. However, if you make a mistake, this indicator can give an unfair and inaccurate evaluation.
In 2019, Bill Tayler, a professor of accounting at Brigham Young University, published a feature article in Harvard Business Review about the dangers of productivity metrics.
University professors are usually judged by how many papers they publish in academic journals, rather than in mainstream publications like Harvard Business Review. Fortunately, he says, Professor Taylor’s superiors seem to have taken this article into consideration in evaluating his work.
However, not all bosses are as flexible as Taylor’s university dean when it comes to how to evaluate performance.
Productivity metrics are something of a paradox in modern management. Productivity metrics widely used in call centers and manufacturing plants are also beginning to be used in knowledge work fields such as social work, law and health care, a recent New York Times investigation found.
The widespread adoption of remote work has led to increased use of productivity metrics as a way for managers to score employee productivity and ensure that their subordinates are working hard.
Logically, scoring employee productivity can help organizations identify top performers and uncover potential problems. But if companies use these tools carelessly, they run the risk of encouraging the wrong behaviors, increasing inequity among employees, and worsening employee performance rather than improving it.
Productivity indicators are far from fair.
Understanding employee performance has been a challenge for decades, especially for “complex, multifaceted jobs,” said Michael C. Sturman, director of human resources at Rutgers University. says that the problem is serious.
What kind of person is a person who can contribute highly to an organization? The answer depends on when you ask the question, who you ask, and, of course, what your criteria are. Also, one can imagine the difficulty of quantifying soft aspects of work such as subordinate training, collaboration, and thinking.
Taylor also points out that it is easy to confuse the actions an organization wants with the results it wants. The numbers that companies measure to evaluate performance, such as the amount of time a service representative uses a computer, are very often correlated with the results the organization seeks, such as improved customer satisfaction.
However, the boss does not want you to do any “computer-based activities” per se. For example, let’s say an employee has installed a “mouse jiggler” that automatically moves the computer mouse (no laughing matter, it’s actually used). This allows the employee to appear as if they are online all day. However, this does nothing to measure customer satisfaction.
The biggest problem with scoring employee productivity is that it gives companies the impression that they are evaluating employees fairly, says a professor of organizational behavior at the French business school INSEAD. Associate Professor Kaisa Snellman.
“Companies will say, “Our company has an objective performance evaluation system. We’ve done everything we can to ensure fairness, so we can rest assured now,” but the scores evaluated using that system are fair. It’s hard to say.”
For example, research shows that workplace performance reviews and scoring systems have gender and racial biases. Other studies have shown that men are seen as better and valued more highly than women in multiple industries and occupations. This is a plausible phenomenon even when we conduct experiments controlling for educational background, age, and role.
Furthermore, even when performance is evaluated using seemingly objective indicators such as “number of units produced” or “absenteeism rate,” non-white employees are less likely to be evaluated for high job performance than white employees. Studies have repeatedly shown that it is much lower.
Furthermore, compensation systems tied to performance evaluation scores have also been found to be biased. A paper published in 2014 found a disparity in promotion rates between men and women at major law firms that track paid work hours.
On the other hand, a meta-analysis of nearly 200 studies on differences in performance evaluation and compensation between men and women found that women receive smaller raises than men, even when performance evaluations are similar. Even though the evaluations were almost the same, there was a 14 times difference in the rate of pay increases for women and men.
The more you pursue metrics, the lower your productivity will be.
Cary Cooper, a professor of organizational psychology at Manchester Business School in the UK, wrote in his co-authored book, The Healthy Workforce, that employees are motivated to work. In order to do so, he cites a large amount of business management research that says people need to feel trusted, valued, and given discretion in their work.
Research shows that engaged employees have less absenteeism and are more likely to stay with their organization rather than change jobs.
Cooper points out that grading employees based on their output and giving them points is counterproductive to “actual productivity” and “engagement.”
“Employees need to be given autonomy, trust, and recognition. But productivity metrics work against this. They make employees feel like they’re being controlled and manipulated.” I’ll let you.
Productivity metrics that tell you you’re not doing enough aren’t helpful. This means that employees have no idea how to improve. For employees, productivity metrics are just unpleasant.”
Furthermore, Professor Taylor points out that companies are overlooking the fact that even when using the same performance management tool, different employees react differently. Some employees work hard because of intrinsic motivation, while others work for the money. Evaluating this based solely on productivity scores may discourage employees who are working hard due to intrinsic motivation.
If you could understand what motivates each employee, you could design a more effective performance management system, saving time, effort, and money.
Requires a comprehensive approach to performance
Although productivity metrics come with risks, there are also practical uses for productivity metrics.
“For managers, (productivity indicators) are good for getting a rough sense of scores and getting a sense of the area.By using productivity indicators, you can identify which employees are performing well, and which employees are performing poorly. “We can determine who is responsible for the problem and identify potential problems,” said Snellman.
For example, if a department’s productivity index score is low, it may be a sign that management is not working well. If team performance scores are low, psychological safety may not be maintained.
However, a single score should not determine the fate of an individual employee.
“Productivity scores are best used as a diagnostic tool for employees, and should never be used as a basis for firing someone,” says Snellman.
Companies should take a step back and think about this. Professor Cooper also says:
“Why do companies use productivity indicators? This is the point to consider. Is it because they want to see the scores as an indicator of employee performance, or is it because of a chain of command issue where managers are in a position to supervise their subordinates? Is it because you want to? I think it’s the latter.” (Cooper)
Taylor recommends that companies involve their employees in how they evaluate performance. Ask your employees how they spend their time on weekdays. Maybe you were dealing with an angry customer while offline, or you might say you were thinking about a business issue.
You can also reward this behavior by thinking about ways to account for your employees’ work, Taylor says.
“The vast majority of people want to do good, and we have to be very careful not to eliminate intrinsic motivation in our efforts to control employee behavior.” (Taylor) )
*This article was first published on October 11, 2022.
[Original text]
(Edited by Ayuko Tokiwa)
Source: BusinessInsider
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