It seems like every few months I hear a story that tries to claim that 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.” (Source) 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 waiting outside hospitals with patients in the back. Apparently, the central government mandated a ‘waiting time limit’ that is measured starting from when patients come in the door. If patients wait outside, the hospital is less likely to exceed the defined target.
But why create this activity measure in the first place? No doubt the overall goal of the National Health Service is to ensure that people are healthy. The assumption is that the less that patients waited, the more likely that they could be appropriately treated, and the healthier that they would be. Seems reasonable, right?
The problem is that they’re measuring an activity that may or may not be tied to the outcome. For example, a patient with a life-threatening injury should certainly have a shorter wait time than someone with a broken leg. Futhermore, how do we decide whether we care more about the maximum wait time for any one patient or the average wait time for all patients? And if we give patients the wrong treatment (as in the second example), does it really matter that we did it in a timely fashion?
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 efficiencies, 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.