In business we’re often taught to measure accomplishments or success with a number. The principle idea behind measurement is to trend towards a goal. Do you measure job performance or business success by the numbers?
Goals and the pressure associated with accomplishing them can stretch the boundaries of people’s ethics and integrity. Extreme pressure to achieve the numbers can also affect how people perceive and measure risk.
Performance Measurement
Years ago I worked in a mail order business. The company had reasonable success. They had a strong sales force and strict guidelines for performance.
If you were in sales, you occupied an expensive seat, a cubicle equipped with a telephone, a computer terminal (workstation or terminal as they were called in those days) and a calculator. There were only so many cubicles and they were required to be occupied with the highest performing sales representatives.
As a sales representative you were responsible to achieve monthly, quarterly, and annual goals. If you didn’t measure up you risked termination and the odds of long term success weren’t all that great.
I recall that one of the hiring strategies was to bring on fifteen new sales representatives with the hope that three to five might actually make it for at least three to six months.
Some did quite well, but the pressure to perform and acquire high volume repeat corporate customers was intense. As a commission sales representative your success was predominately measured by your dollars in sales, but did it really work?
Beating the System
Unfortunately several ethically challenged sales representatives found a way to make their numbers.
They discovered that they could send out product to random customers without their consent by using a shipping method known as C.O.D. (collect on delivery). Their sales were recorded (for measurement) in the computer system and their paycheck was calculated. If they achieved a high enough number a bonus was also applied.
The problem of course was that the customer never placed the order. The shipping company would attempt to deliver, the customer would refuse the shipment, and within about a week the product would end up back at the warehouse.
Not only was this entirely unethical but it cost the company time and money, the shipping company time and money, not to mention the terrible effect on the customer experience.
I think you get the idea. This was bad, really bad, but what caused this problem?
Challenges of Measurement
Certainly the persons who participated in this type of behavior had some ethical challenges, but then again did the company they worked for push things too far? Was the pressure to achieve the numbers and the witnessing of sales representatives getting hired and fired seemingly without care or concern for them as people a contributing factor?
Could it be that the culture adopted a feeling of, “I don’t care about the company because the company doesn’t care about me?”
Measuring success by the numbers is important but at what point does it cross the line? Do some exert too much pressure causing the employees to inappropriately assess risk and make very bad decisions for themselves and the company?
There are plenty of examples in business history. Companies such as Adelphia, Enron, and more recently Wells Fargo have all experienced ethical issues in part created by measuring by the numbers.
What to Measure
Using numbers as a measurement often brings with it the idea that more or higher numbers are better.
What if your automobile mechanic measured by the number and frequency of your visits, your dentist measured by cavities filled, or your doctor by knees replaced? Do they? They might.
Does the highest volume in ticket sales for the latest movie measure the best movie? Is a bestselling book the best book?
Are the highest sales numbers the most important or is the quality of the product, service, or customer experience a better measurement?
Measuring by the numbers probably works but the KPI’s (key performance indicators) need to be measuring the proper metric. What we measure and how, can have a significant impact on organizational health.
Companies who measure the right thing might be those with the best reputation. Those with the best reputation probably hire the best employees, they have the best training programs and they are most likely to have a low employee turnover ratio.
There is also a pretty good chance that they have the highest customer satisfaction ratings and will outlast their competition.
Are you measuring job performance by the numbers? Which ones?
– DEG
Dennis E. Gilbert is a business consultant, speaker (CSPTM), and corporate trainer that specializes in helping businesses and individuals accelerate their leadership, their team, and their success. He is a four-time author and some of his work includes, Forgotten Respect, Navigating A Multigenerational Workforce and Pivot and Accelerate, The Next Move Is Yours! Reach him through his website at Dennis-Gilbert.com or by calling +1 646.546.5553.
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