A little bit more on KPIs

A blog follower has just given me a great example on the madness of KPIs.  I am all for setting reasonable and challenging goals. I think everyone likes to be clear about expectations and if there are no set goals at all, rust-out can result. The value of one’s work may be obvious to someone like a paramedic, but it may not be so obvious to someone in a large business who is a few steps back from where the product meets the customer. So, I do not dislike KPIs per se. It’s when they are stupid or thoughtless that I despair.

The above-mentioned friend has just witnessed a prime example of business target stupidity. The story began a year ago when her company distributed a staff engagement survey. Turnover of around 30% ought to tell us whether rational people in that company bother to whip themselves up in a motivational sense, but in fact, the company directors seemed surprised at the shockingly negative feedback.

The next step should have been to investigate further and face the music, but management decided that the low return rate must be to blame. They concluded that only the very angriest of employees had filled out the survey and that a higher response rate would dilute the result. Force the apathetic to answer and Voila! The culture has miraculously improved. (You couldn’t make it up!)

Survey Monkey was utilised again. Survey monkey is a quick, cheap and impersonal on-line surveying product. It is perfect if you don’t wish to invest in researchers to run focus groups or get some honest answers. It also allows for control of the questions and therefore, control of the answers.

But how do you encourage, or even force, participation in an on-line survey?

It was decided that the bonuses for senior managers should, in part, be linked to the number of their reports who returned a survey. Suddenly employees were being spoken to in unusually kind tones about when they would complete their surveys. There was suddenly a smell of desperation about getting surveys returned. My friend was amused at the not-very subtle attempts to find out whether people had been cooperative. She was even more amused when a town hall gathering was held in the main office to stress the importance of filling out the surveys. Town Hall gatherings in this company were only ever reserved for major announcements. My friend was directly asked about her own survey and she lied. She was enjoying the rare opportunity to feel some level of control over the boss’s pay for a change. When it became clear that someone might check returns specifically, she relented and filled it in, with as much joy as a child eating broccoli.

Her survey contained some very angry comments, but she knew this was irrelevant. No-one would be reading it. That portion of the bonus dependent on a return rate will be paid even if 100% of employees write ‘Help! We are trapped in hell.

Of course, it is not really a hell. It’s not Syria or Somalia. People are free to leave and plenty of them do resign. Others sit around waiting for a redundancy payout. That’s not an impossible dream. The company makes random cutbacks now and then and rarely uses performance as the selection criteria.

But not everyone will be jaded. The board will be impressed that the figure on returned engagement surveys has improved and they might congratulate themselves that something positive is occurring. The shareholders will possibly hear the good news about the ‘turnaround’ at the Annual General Meeting and the Annual Report will show the face of a smiling worker. Managers will get their bonuses, despite the truth. Bit by bit, our standards of integrity are lowered and our faith in genuine leadership is eroded.

I mentioned in the last post, that some Australian Banks and one large insurer were facing a Royal Commission into their behaviour and governance.  The dirty secrets were well hidden for a very long time. The leaders of all companies, public or private, would do well to remember a quote from Robert Louis Stephenson; Sooner or later, everyone sits down to a banquet of consequences.


3 thoughts on “A little bit more on KPIs”

  1. Fascinating that solution was thought necessary, and sufficient. Isn’t every defect a treasure? Angry people often have a reason.

  2. Whoops, dilution, not solution. The only important KPI would be a completely accurate spell check.

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