Did you spot the elephant in the room? The non-sense of performance indicators and metrics

Combining human efforts with technological advances to deliver services faster, better and cheaper has been a core ambition of management science (if there was such a discipline!) — at least since the start of the industrial revolution.

But over time, machinery tends to wear out and men become lazy and complacent. Both need to be managed, not least for efficiency but also for safety reasons with the aim to extract maximum surplus. Hence the old adage that everything should be quantified and measured, if not it is simply not manageable. This is the underlying basis for setting up and monitoring metrics and so-called performance indicators.

While it may be easy to pin down the survival of an organisation to one single metric of profitability, to achieve this is not always straightforward given the conflicting departmental goals and the difficult choices between personal rapacity, short-term survival and long-term sustainability. It is precisely here that indicators and metrics run into a familiar problem. The original intention behind establishing the indicators faces direct conflict with the goal of achieving the indicators.

And the examples are many. For instance, establishing indicators for monitoring rest hours and the unwillingness to supply additional manpower when rest hours are not being met, setting up unrealistic goals such as zero accidents and expecting openness from the crew in reporting accidents, assigning ambitious timeline to accident reports and turning to an under-resourced safety department to close reports in time, and setting up uncompromising deadlines for the maintenance of safety critical equipment with minimum spare parts and time allocated for maintenance.

What follows is a deliberate manipulation of metrics, such as falsification of rest hours, a culture of fear and under-reporting of incidents, questionable quality of accident investigations, and a deferral of maintenance based on risk assessments and waivers to meet individual and departmental key performance indicators. Managing the measure takes precedence over measuring to manage.

But there is a far more serious problem with this quantification and control myth that keeps many in the business of safety and quality management who should simply be kept out of it, not least for safety but also for business reasons. I will illustrate this through an example.

In one case a company became concerned about slips, lapses and mistakes of their staff carrying out routine office operations. The ideal solution in such a situation would be to hire more people or allow sufficient time for people to carry out their jobs but neither of these two options were considered cost effective. Rather, a solution was found in establishing detailed monitoring of safety and quality indicators.

But here is the dilemma. With tighter controls and increased surveillance the staff felt stressed and uneasy. The next thing for the company was to monitor the stress levels of workers, replace old office furniture with ergonomic equipment and offer free counselling on health and well-being to their staff.

Being conscious of their brand reputation, the management also felt the need to monitor the activities of their employees on social media. Indicators were set up to ensure the workers were using their holiday allowances and that no amount of annual leave was accrued at the end of every year.

A dedicated department was set up and kept extremely busy in balancing the competing goals of business and safety. Soon more people were recruited in this department but elsewhere in the organisation the sentiments were down. A happy workplace soon turned ugly. Productivity dropped further and the organisation was crippled under its own competing goals and metrics.

The example is a one-off but the underlying message is not. In many organisations meaningless metrics and indicators have become the elephant in the room — a flawed approach to management and an obvious waste of resources. We all know the problem but none of us want to discuss it.

Disclaimer — the views expressed in this paper may not be the views of the organisation that the author represents.

The article was first published in the TradeWinds news magazine on 2016-09-16.

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