1.4 the power of measurement

There are some who say that rewards are the most powerful force in organizations. According to Michael LeBoeuf, the world’s greatest management principle is “What gets rewarded gets done.” He said that he reached this conclusion after hearing the following parable:

A weekend fisherman looked over the side of his boat and saw a snake with a frog in his mouth. Feeling sorry for the frog, he reached down, gently removed the frog from the snake’s mouth and let the frog go free. But now he felt sorry for the hungry snake. Having no food, he took out a flask of bourbon and poured a few drops into the snake’s mouth. The snake swam away happily, and the man was happy for having performed such good deeds. He thought all was well until a few minutes passed and he heard something knock against the side of his boat and looked down. He was stunned to see that the snake was back – with two frogs!

Sound familiar? We have all experienced analogous situations

where employees do something that is inconsistent with the goals or values of our organizations, and we can’t understand for the life of us why they did it. The fact is that people do these things because their managers often inadvertently apply LeBoeuf’s principle of “What gets rewarded gets done,” but they fail to implement an effective system of measurement to support it.

Every day, I see or hear of disturbing behavior by individuals in organizations as a result of how they (and their performance) are rewarded: Sales managers who alienate key customers because they need to close a sale by the end of the month so they can get their quarterly sales bonus; corporate executives who allow expenses to be deferred to a subsequent period because they are rewarded for profits during the current period; employees who fail to share knowledge with others because knowledge sharing isn’t counted in their performance appraisals. The list of reward-motivated abuses goes on and on.

So, was Michael LeBoeuf right? Is “What gets rewarded gets done” the greatest management principle in the world? No – I think not.

Rewards are indeed extremely powerful, and people will naturally tend to do the things for which they are rewarded. But despite the plethora of books and articles (including several I authored) that promote rewards and recognition as the solution to every conceivable organizational failing or management woe, simply implementing a system of rewards is only one part of the solution, and it isn’t even the most important part. In fact, this book resulted from my realization that no matter how important and powerful rewards are, they are no better than the measurement system they are based on.

But rewards aren’t the only management system that can be problematic without good measurement. Measurement underlies every system in an organization – and that’s why performance measurement is so important!

While “What gets rewarded gets done” may very well be one of the world’s greatest management principles, there is another principle that is even more fundamental. In fact, it determines what people choose to do
(and reward) on the job, and in their lives. This principle is: “You get what you measure” and its proper application will help you not only to use rewards better, but also manage everything else you do more effectively.

1.4 the power of measurement