| One of the greatest problems about KPI's is how they | | | | know exactly what they should do. Even if people |
| are set. This can lead to targets over which the staff | | | | stop doing the wrong behaviour, it doesn't guarantee |
| member has a complete lack of control. You can | | | | that they will do the correct or desirable behaviour. |
| imagine how soul destroying it can be to be measured | | | | Many supervisors get staff to start on time by |
| on something you cannot affect. | | | | punishing them for being late, only to discover that |
| Let's say for example you are an executive of a | | | | absenteeism has increased. The test for an active or |
| public company and a proportion of your income is | | | | passive KPI is the famous "Dead Man's Test." If a |
| related to the share price. If it goes up, you receive a | | | | dead man can achieve the goal, it is not a worthwhile |
| large bonus, if it falls you get no bonus. A recession | | | | one. Dead men don't make errors or have accidents |
| occurs and the share price plummets. On the other | | | | because you can achieve a zero error rate and a |
| hand, you have performed well during the year and | | | | zero accident rate by simply doing nothing. We hire |
| been an extremely effective contributor. The share | | | | people for active behaviour. We want them to |
| price falls because of events outside your control and | | | | produce error free work, work productively and work |
| you don't receive a bonus. performance indicators like | | | | safely. |
| this have profoundly negative effect and achieve very | | | | It is fashionable to have a regime which includes KPI's. |
| little apart from creating resentment. | | | | They are yet another solution in a long line of solutions |
| The second greatest problem is that KPI's can be | | | | such as Management by Objectives, Total Quality |
| active or inactive. For example, you may write a target | | | | Management, Quality Circles, Re-engineering, Profit |
| in terms of either attendance or absenteeism. | | | | Sharing, Self Managing Teams, Re-engineering and so |
| Attendance requires an action and is active. On the | | | | on. There are plenty of solutions which are applied |
| other hand, absenteeism is inactive because the staff | | | | without fully understanding the problems. It is little |
| do not have to do anything in order not to come to | | | | wonder that these "management fads" have an ever |
| work. Inactive goals like "zero defects," "no | | | | decreasing life as the staff progressively become |
| absenteeism," or "have no accidents," typically explain | | | | more cynical. |
| what we don't want. People perform best when they | | | | |