The difference between measure and incentivize

Afraid of taking measurements about your organization because of what behaviors it might create? Don’t be. Measurement alone isn’t harmful to the organization, and understanding how your organization works can be very useful. Oftentimes, the outcomes we want aren’t directly controllable. We want more sales, but you can’t just say to your team “make more sales” and actually expect it to happen. On the other hand, with internal measures of performance people often can just make the numbers look better.

Tell people to be more productive, and if you measure productivity by counting lines of code you’ll get undesirable behaviors like excess code and a resistance to optimizing existing code. However, if you figure out what behaviors cause more code to naturally get generated you can encourage or direct different behaviors in your organization.

For example, I frequently measure organizational productivity as function points per hour. That’s measurement. If I simply say to folks, make our productivity measure go up that’s incentivizing. If I then identify behaviors that matter I can continue to measure and understand what matters without it becoming an incentive that breeds bad behavior – like making your coworkers inefficient so you appear more efficient.

Measure, but don’t directly incentivize people on the outcome you want. Figure out the behaviors that matter and focus there. The outcomes will follow.

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