Metrics and People Management

What gets measured gets managed, so goes the old cliche.  As leaders we all have a responsibility to use the best information to manage and coach employees and to improve the performance of our organizations.  We all know that. The challenge is how to do it best.

Recently, the Harvard Business Review published an article about competing on HR metrics.  It makes an excellent argument for managing a workforce with information, rather than by gut instinct.

In general, I agree that using data to inform decisions reduces the risk of errors in judgment. But I fear that it increases another risk. The bias of misplaced sense of accuracy. Many of our measurement tools in HR today are based on performance evaluations and other judgment based tools. By assignment numbers to these evaluations, we give the impression of accuracy. Yet research suggests that there are many biases in performance evaluation (the halo effect; the similar to me bias; and anchoring to name a few).  Additionally, there is some evidence that the rater’s mood will have an impact on their evaluation of an employee. Additionally some employees may have a “harsh” rater as a boss while others have a more “lenient” rater, and yet the employees function at about the same level.

While effective measurement using carefully developed rubrics may reduce the likelihood of bias, it can’t eliminate it completely.  And because metrics appear to be so “unbiased” it may lull management into a false sense of accuracy about their assessment of their workforce.

Data needs interpretation in order to become useful information. In the end, metrics and measurement are only a management tool, not a magic bullet to solve all of our personnel issues.  In the end, we must still rely on judgment.


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