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There are huge unintentional costs to using performance measures badly, but those costs can be avoided with 5 easy tactics.

In his article “Numbers Speak for Themselves, or Do They? On Performance Measurement and Its Implications”, Berend van der Kolk talks about the individual, organisational and social costs of measuring performance.

There are leaders and managers that will refuse to improve their performance measurement approaches because of these costs. Like many, their past experiences with measuring performance are rife with time-wasting data collection, trivial measures, and uninformative dashboards that collectively lead to blame and gaming.

But because measurement can be done badly, it doesn’t mean it shouldn’t be done at all. Measurement is a tool just like a drug or a knife or a hammer. It can be used well with good intent, used badly with good intent, or just used badly with bad intent. In this spirit, Berend suggests five tips to reduce bad measurement’s costs.

PuMP is an approach built on the same principles that Berend describes in his article, and even more principles aimed at the interface between the technical (numbers) system and the social (people) system that make up performance measurement.

What follows is the PuMP take on Berend’s five tips to reduce the individual, organisational and social costs of measurement.

“First, performance measurement systems should be designed with those stakeholders who are impacted by them, and not only by those who are responsible for the performance.” – Berend van der Kolk

One of the bad performance measurement experiences so common for people is having measurement done to them. They are told what to measure, told what data to collect, told what the measures are saying, and told what to do about it. There can be no buy-in this way.

Building buy-in to measurement requires that people are actively involved in the selection, implementation, and use of measures they affect or are affected by. Getting this involvement depends more on getting stuff out of the way, rather than controlling it.

“Second, keep the goal of the measurement system always in mind, to tackle indicatorism.” – Berend van der Kolk

Indicatorism is essentially the same as what Jerry Muller means by metric fixation. It’s not seeing the wood for the trees.

Until it is learned by heart, it’s worth creating a physical meme about the true purpose of performance measurement. Its purpose is to give objectivity to information about performance, and help us see beyond our human ‘observing horizon’. It certainly isn’t about hitting targets.

“Third, complement quantified performance information with qualitative information.” – Berend van der Kolk

Not everything that matters can be quantified (even though more of things that matter can be meaningfully quantified than we might first think). And what cannot or should not be quantified still matters if it influences performance.

The qualitative information that measures cannot inform us about is in the form of stories, case studies, examples, research about feelings and perceptions, images, and diagrams, and such. They blend with our quantitative measures to give a richer story about performance.

“Fourth, provide managers with some flexibility regarding how the performance measurement system is used.” – Berend van der Kolk

Too often, how the performance measurement system is used is to judge people. This can be formally, as in employee or leadership performance agreements. Or it can culturally, in the tendency to blame people when aspects of the organisation underperforms.

We need more than just flexibility in how performance measures are used; we need a clear context. And the context that reduces the costs of measurement is when measures are only ever a tool in people’s hands and never a rod for their backs.

“Fifth, treat indicators of performance never as the ‘end’ of a conversation, but always as the beginning of one.” – Berend van der Kolk

The largest volume of performance measure literature is on the selection of measures. There is little that guides how we use performance measures in decision-making, strategy execution and performance improvement. It’s not a tick-and-flick exercise.

Performance measures are only part of the conversation about performance, not the decision-makers. They are like a lens to focus our attention on what is happening with what matters. And then it’s up to us to dive deeper into the causes and context and take an experimental approach to finding the solutions that fundamentally improve performance.

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Performance measures are tools to help us reach our goals sooner, and with less effort. To do this with fewer unintended consequences, like the individual and organisational and social costs described above, we need to take a better approach to selecting, creating, and using performance measures.