It should be simple: we set clear
performance targets and reward people for achieving them. Shockingly, in
practice it often leads to cheating and a desperate chasing of targets
rather than improved performance. What we are seeing time and time again
is that individuals hit the target to maximise their rewards (or career
performance) but miss the point. So does that mean targets and the
associated rewards for delivering them are bad? Let's just look at two
examples here.
Target culture in the police:
Recent investigations into a sex crime police unit in south London found that the culture in the unit was so focused on delivering centrally imposed targets that rape cases were not properly investigated. Instead, victims were pressured into retracting their statements so that the crimes could be reclassified or taken off the system, which in turn boosted performance statistics and detection rates for the unit.
Fiddling the targets in hospitals:
Hospitals are often targeted on the time it takes to offer patients operations. Hospitals in Scotland were found to offer patients operations just before their target time was running out but the appointments were offered at so short notice (say next day or so) and in hospitals so far away from the patients home that most patients had to decline the offers. This resulted in the hospital hitting their target: they have offered the operation within the targeted timeframe but the the patient declined, which also meant the stop watch would start from zero again!
Finding these practices in hospitals and the police is particularly shocking but those behaviours are equally common in the corporate world of business. Just think of the banker's bonuses that led (and still lead) to the wrong behaviours or the incentives that led executives in oil companies to overstate their oil reserves.
Does this mean we should stop setting targets and make bonus payments? No, but we have to do it a lot better. If we do it well targets allow us to communicate, deliver and reward our performance objectives. There are a number of technical things we can do to reduce the dysfunctional behaviours such as balancing short and long term goals, or balancing targets for individual, team and corporate performance, etc. But the single most important factor is creating a more trusting performance culture in which targets are not seen as something that is imposed from above to control people. Instead, what we need is an environment where targets are understood and owned by individuals and where rewards are given for delivering good performance and not for 'hitting a few targets'.
Target culture in the police:
Recent investigations into a sex crime police unit in south London found that the culture in the unit was so focused on delivering centrally imposed targets that rape cases were not properly investigated. Instead, victims were pressured into retracting their statements so that the crimes could be reclassified or taken off the system, which in turn boosted performance statistics and detection rates for the unit.
Fiddling the targets in hospitals:
Hospitals are often targeted on the time it takes to offer patients operations. Hospitals in Scotland were found to offer patients operations just before their target time was running out but the appointments were offered at so short notice (say next day or so) and in hospitals so far away from the patients home that most patients had to decline the offers. This resulted in the hospital hitting their target: they have offered the operation within the targeted timeframe but the the patient declined, which also meant the stop watch would start from zero again!
Finding these practices in hospitals and the police is particularly shocking but those behaviours are equally common in the corporate world of business. Just think of the banker's bonuses that led (and still lead) to the wrong behaviours or the incentives that led executives in oil companies to overstate their oil reserves.
Does this mean we should stop setting targets and make bonus payments? No, but we have to do it a lot better. If we do it well targets allow us to communicate, deliver and reward our performance objectives. There are a number of technical things we can do to reduce the dysfunctional behaviours such as balancing short and long term goals, or balancing targets for individual, team and corporate performance, etc. But the single most important factor is creating a more trusting performance culture in which targets are not seen as something that is imposed from above to control people. Instead, what we need is an environment where targets are understood and owned by individuals and where rewards are given for delivering good performance and not for 'hitting a few targets'.
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