‘Tis The Season for Management by Measurement

It must be that time of the year. I see traffic in the online forums asking about how to set key performance indicators for lean staff people so their performance incentives can be set.

If anyone were to ask my advice here, it comes down to one word:


Two reasons.

First, we have overwhelming evidence that these incentives not only don’t work, but they actually make performance worse in the kinds of work you are asking these people to do.

The Overjustification Effect

Dan Pink on motivation

All of this is consistent with what Deming told us decades ago, yet we keep doing it.

The second reason is inconsistency and misalignment.

Having the continuous improvement staff operating to separate metrics disconnects their efforts from line management’s. They become responsible for improving the operation while the line management processes are… what?

The message to the shop floor team is pretty clear here. They can read an organization chart. Do what the boss says, then, if we have time, and if the improvement guys can make the case, then maybe listen to what they have to say.

If you must have management-by-KPI, then the performance measurement for continuous improvement must be exactly the same as the line manager being supported. Why?

The question I would ask is “Who is responsible for the performance of the organization?” If it isn’t the line leader, then why does that position exist?

It makes no sense whatsoever to have the lean implementer working to a different agenda.

Our management traditions of de-aggregating and delegating are not serving us well. We need to take a systems view and realize that everything is inter-related. Further, we need to grasp that B.F. Skinner’s (dubious) research on rewards-based-behavior simply does not apply to management. Never has. Wishing otherwise isn’t going to change it.

6 Replies to “‘Tis The Season for Management by Measurement”

  1. What’s your second reason?

    Not that you need more. I think that your supporting evidence is about as conclusive as it could be. I was just wondering if you had something in mind when you said “Two reasons.” You had two supporting links but they come down to the same reason – because science says so…

  2. Given the trend to do what shouldn’t be done, that is set different metrics, should we consider that even the thought that different metrics are needed indicates that we don’t have the correct people in the CI positions?

    1. I don’t think it is about the correct people.
      Anyone you put into the same situation and system is going to respond the same way.

      It certainly isn’t about people in CI positions. It is about the entire approach to management.

      What CI people can do is
      1) Survive. That may mean playing the game.
      2) Work, over the long term, to shift things. I know this is really general, but exactly what to do depends totally on the local situation.

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