Harvard Business Review “You Are What You Measure” by Dan Ariely
The theme of Dan Ariely’s Column “You Are What You Measure” for Harvard Business Review is that “human beings adjust behavior based on the metrics they’re held against.” Ariely is taking a business approach in the application of the observer effect, which is the theory that by observing a situation the outcome will change. “Anything you measure will impel a person to optimize his score on that metric,” continues Ariely.
Ariely’s column for Harvard Business Review then takes this theme and views it in the context of a CEO and company’s stock value. Concluding that a CEO will make all decisions, and be judged on those decisions, based on their effect to the stock value. There are no other metrics that are used to judge the success of a CEO other that the metric of stock value. In order to change the priorities and behaviors of a CEO, “we need to change the numbers we measure” them by. Performance Scoring objectively measures any employee in a company by metrics known by their company to drive success.
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Ariely then dives deeper into the fact that “this phenomenon plays out time and again in research studies” by economists and psychologists. He relates this to his time at MIT and the “complex equation” that was in use “to track performance on a variety of dimensions” for professors. The performance rating, and optimizing the rating, became priority even though gaining points did not “result in more effective learning.” To eliminate this from happening, Performance Scoring uses factors to measure employee performance. These factors are the unique and objective measurables that are known to affect performance, productivity and efficiencies throughout the company.
Finally, Ariely looks at this from an organizational level with standardized testing in education. In States with standardized testing, students will “perform well on these tests but falter when asked to demonstrate their knowledge of the same material in a different way.” This is because the teaching is predicated on standardized testing, the numbers that matter most with the state. The conclusion to the Harvard Business Review column is that “what you measure is what you’ll get.”
In the context of employee performance management there is a void of both data and metrics. Filling this void and measuring what matters with employee performance, is central to Performance Scoring, and will drive employees to perform better knowing their performance is being continuously measured.