Avoiding the Pitfalls of Metrics Driven Management

Most staffing executives and managers understand the value of metrics. They see the visibility it can provide and how it allows them to make better strategic and tactical decisions. However, what we rarely discuss are the pitfalls of metrics based management. These pitfalls can effectively banish common sense and replace it with bureaucratic certainty where rule enforcement dominates management decision making. Rule based management does have its place, but taken too far it can compromise adaptability and lead to a demotivated workforce. Below are a couple common pitfalls and how staffing managers can avoid them.

Pitfall One: Driving Non-Productive Activity

Potential Problem: Focusing on activity is an effective management strategy for a junior level employee who needs to develop disciplined habits. However, as a producer becomes more experienced and successful, focusing solely on activity metrics can be both demotivating and unproductive. In addition, the focus on activity may compromise the quality of the work. A sales person can definitely hit their meeting number, but are those meetings with people that generate business is a completely different matter.

Solution: Define the Key Measure of Accountability
It is a manager’s job to define the key measure of accountability for the different roles within the organization. If they are not defined and focused on, management runs into the problem of burying their people in secondary metrics and taking their eye off the primary purpose of the position.  In the majority of cases, any activity measured should feed into that key measure of accountability.  For a sales team that key measure may be quality job orders while for a recruiter it may be quality candidates.     The discipline of developing the key measure of accountability for each position is a first step in managing production personnel to metrics.

Pitfall Two: Reactive Management

Potential Problem: Because staffing is an action oriented industry, managers have a tendency to want to quickly respond when they see troublesome data. This approach can work when the problem is simple and easy to isolate. However, some problems are more complex and reacting too quickly can lead to problems. First, if the data is a one-off aberration, then management is in danger of over reacting and distracting the team. Second, most underperforming metrics can have multiple causes. Managers who act too quickly can easily assume the wrong root cause and roll out solutions that have no impact or in some cases can make the problem worse.

Solution: Disciplined Analysis
When troubleshooting underperforming metrics, managers must first decide determine if it is a pattern or an isolated event. This is where trending data is invaluable. Trending data can show whether the poor performance is part of a bigger pattern as well as providing the foundation for effective root cause analysis. Once a pattern is identified, managers must be prepared to put aside their assumptions and take an unbiased look at the problem. This is a crucial step for seasoned managers who may rely too much on past experience when diagnosing a problem. This solution bias blinds managers to root causes they either have not seen before or are outside their comfort zone. A manager must be mentally prepared to consider any cause. Only then are they ready to dive into the details of the data to identify the root cause(s) of the problem and craft a focused solution.

Metrics are an important management tool, but their effectiveness depends on management’s ability to leverage them. They are meant to inform the management of problematic patterns that can be real opportunities for improvement. But metrics do not stand on their own. Metrics cannot tell a manager what they must do and how they need to do it, they merely reveal that something must be done. Managers need to use their judgment to translate that data into effective action. To develop this discipline, management must be committed to limit their reliance on rules based management and avoiding these common pitfalls is a good place to start.

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