Liberty, Politics and Economics

Why Management Targets Become Ineffective

The use of targets usually has a desirable effect on the behaviour of managers for a year or two at most. After that the effects of overusing numerical targets can be detrimental for the following reasons:

1.Targets are only effective if the manager is largely in control of the parameters being measured.  In many organisations the management performance is affected by many factors beyond the control of any individuals, or even the whole organisation.  Prevailing economic factors and general market conditions, demographics, fashion, Government legislation, behaviour of competitors, competence of colleagues and peers etc. etc. can have a profound effect on individual performances. In particular it may not be appropriate to overuse numerical targets for public bodies such police forces and healthcare providers when so much crime and illness is caused by influences beyond their control  – changes in demographics, immigration, relative affluence and socio-economic factors to name but a few.

2. Targets can only be set against aspects of the job, which can be accurately measured. This can cause a bias towards “hard” numerical targets at the expense of more important “soft skill” aspects of the work. For example nurses can be set targets around number of patients treated, but cannot easily be measured and rewarded against the important “soft” skills of a caring bedside manner and patient empathy which lead to better patient care.

This type of “measurement” culture has caused a proliferation of Speed Cameras on our roads. In fact, driving over the posted speed limit accounts for less than 10% of road traffic accidents, whereas “driving without due care and attention” accounts for 40%. Measuring speed is easier than measuring attention levels or driving skills, so that’s where we put our resources. We take policemen of the road and concentrate on what can be easily measured rather than improving driving skills. This is lazy and ineffective.

3.      Soon after the targets are set the incumbent usually finds “short cut” ways to hit the targets required, making them ineffective. The problem here is that managers waste a lot of time and energy “gaming” the target setting system to their advantage, rather than actually doing their job. This will be particularly true if a large part of their remuneration is based on hitting certain “hard” targets. There are numerous examples of this, including those given in the article above. The classic example is the reporting of “profit” made in a business. A good accountant can quite legally adjust the books to show a wide range of profit levels allowing senior managers to choose the scenario which best suits their needs at the time.  Another good example was reducing waiting lists in hospitals. This was easily done my phoning all those on the waiting list and crossing off those which has got better, moved house or died whilst on the list. Hey presto! – the list is shorter.  New managers generally restate previous performance levels to a lower standard and blame previous incumbents for the short fall, so they can show better performance against a lower base. They can also redefine parameters being measured, use legitimate but misleading statistical analysis to show better performance and change the way the data is collected or collated. They can also just lie.

4.Having set targets an enormous amount of time, energy and money must now be spent in collecting endless amounts of data to see if targets are being made. Additional resources are used in collating the data, creating reports, reading and interpreting the reports and constantly adjusting targets and measurement criteria to keep up with the managers who are spending their time and energy finding ways of gaming the system. Endless, expensive debates then ensue as to whether the data has been correctly interpreted.

Eventually we find we are spending all our time and money collecting data and trying to catch each other out using statistics, rather than managing whatever it is we are supposed to be managing. Remember all this work and energy is only focused on aspects of the job which are numerically measurable.  Integrity, professionalism, judgement, interpersonal skills, empathy, care etc. etc. are difficult criteria to measure.

We cannot eliminate all target setting but perhaps we can allow more performance measurement based on soft, observable skills as interpreted by an experienced hands-on manager.  The “art”, rather than the “science” of management.

We should concentrate on getting the right people, in the right job with the passion and motivation to make a positive difference.  And then let them get on with it.  This should take precedent over arbitrary numerical targets.