Muller, J.Z. (2018). The tyranny of metrics. Princeton University Press, pp. 17-21, 137 – 156.
Muller goes into detail about the ways metrics can influence organizational policies and procedures. Some aspects of Diversity, Equity, and Inclusion are measurable by monitoring the results of recruitment and retention efforts, but not all. For example, senior leaders may devote more resources to metrics-based results instead of investing in qualitative measures that could improve organizational culture.
Muller first introduces the idea of metrics around a reward system. If you want to develop an employee-base devoted to the continued growth and success of an organization, then a metrics-based reward system might be counterproductive to your needs. Ideation, innovation, mentorship, and collaboration all contribute to the positive trajectory of an organization but cannot be measured using a metrics-based system. If you focus on measurable results and reward employees for meeting financial targets, you’re creating a system that encourages short-termism, competition, and individualism. Employees will focus on short-term financial targets by competing against each other. The employees are no longer thinking about the mission of the organization, only how they can financially benefit.
You’re also creating a system that encourages employees to lie, cheat, or manipulate data just to receive the reward. This could put your organization in a vulnerable position if employees make unsound decisions just to make money. Prior to the 2008 housing crash, brokers received bonuses for the number of mortgages they originated with or without sufficient income data. Scores of unqualified buyers defaulted on their balloon mortgages that they were never able to afford. Organizational behavior scholars have suggested that organizations “…abolish pay-for-performance for top managers and replace it with a higher fixed salary”. (Muller, 2018, p. 139).
“Forced ranking, in which managers are instructed to evaluate their employees compared to fellow employees, is another manifestation of metric fixation”, (Muller, 2018, p. 139).
Forced ranking is another form of metric fixation. By pitting employees against each other, you’re taking away the opportunity to build trust and collaboration, which could lead to ideation. In a 2006 study of human resources professionals, respondents reported that forced ranking “…resulted in lower productivity, inequity, skepticism, decreased employee engagement, reduced collaboration, damage to morale, and mistrust in leadership”, (Muller, 2018, p. 139).
Reliance on metrics will not make employees more accountable or transparent. Instead, they may become sneaky and duplicitous enough to create positive results for financial gain. They become accountable to themselves, not to the mission of the organization. Their actions become opaque as they potentially “cook the books” or distort data for financial rewards. Campbell’s Law holds that, “…the more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor”, (Muller, 2018, p. 19)
The solution is to eliminate pay-for-performance bonuses and replace them with higher fixed salaries for top executives.
L2: Demonstrate the ability to assess complex organizational environments and achieve communicative goals.
L4: Apply communication-centered scholarship to strengthen communication effectiveness.
D1: Iteratively develop inter-professional leadership competencies.
Keywords: metrics, organizational leadership, accountability, measurable results, rewards system, forced ranking, diversity, equity, and inclusion
