It seems like every few months someone tries to claim performance management is bad for organizations.
The latest one comes from Phil Dourado who writes, “Target-based systems distort everything and most people’s behaviour.” Phil bases his indictment of performance management on several stories about the UK’s National Health Service in which “brilliant, dedicated people [are] pushed into ludicrous behaviour by top-down target-setting.”
I’m not going to defend anyone’s actions but the fault isn’t performance management or even poorly set targets. Remember the classic saying ‘what gets measures, gets done’? Well, the National Health Service used the wrong measures so the wrong things got done. Someone doesn’t understand the difference between activity measures and outcome measures.
Take the first example about ambulances with patients in the back of them waiting outside hospitals, rather than bringing the patients inside. Apparently, the central government mandated a ‘waiting time limit’ measured from when patients enter the hospital. If patients wait outside, the hospital is less likely to exceed the maximum waiting time (aka target).
By why are they measuring waiting time? One of the overall objectives for the National Health Service likely is to ensure that people are healthy. Someone who set up this measure likely assumed the less time patients waited, the more likely they could be appropriately treated, and the healthier they would be.
The problem is they’re measuring an activity that may or may not be tied to the desired outcome. For example, a patient with a life-threatening injury should certainly have a shorter wait time than someone with a broken leg. Furthermore, how do they decide whether they should care more about the maximum wait time for any one patient or the average wait time for all patients? And if they give patients the wrong treatment (as in the second example cited by Dourado), does it really matter if they did it in a timely fashion? They are using unhealthy measures.
I may be guilty of speculating but there may be a clue in the use of the phrase ‘lean service.’ Lean six sigma and related methodologies force organizations to obsess about improving their efficiency, without careful examination of whether they are actually using the right processes. True performance management instead focuses on effectiveness – better processes for the situation, rather than improving each process.
In my opinion, this obsession with efficiency is unhealthy. Personally, I’d rather wait a little longer – at the emergency room, on hold for the call center, at the grocery story – if I got the right treatment/answer/price the first time. And if I didn’t have to go back.
The cure is simple: focus on the outcomes, not the activities. Use healthy measures.