Performance Management and the limitations of measurement

Performance management relies on good performance measures. However, not everything can be measured to an extend that we would like. A great example to illustrate our measurement limitations is measuring human intelligence. The ‘measure’ we would traditionally use is IQ (Intelligence Quotient). However, the questions that arise are: What is intelligence? And what do IQ scores actually measure? Whereas the details of the answers to these questions are still subject to an ongoing debate, on the whole IQ tests focus on our analytical and mathematical reasoning. However, Dr. Howard Gardner, professor of education at Harvard University, has shown that there are multiple facets to our intelligence. His studies have identified eight different forms of intelligence – of which IQ only measures a small subset. The forms of intelligence identified by Gardner are linguistic intelligence (“word smart”), logical-mathematical intelligence (“number/reasoning smart”), interpersonal intelligence (“people smart”), bodily-kinesthetic intelligence (“body smart”), spatial intelligence (“picture smart”), musical intelligence (“music smart”), naturalist intelligence (“nature smart”) and intrapersonal intelligence (“self smart”). This suggests that someone can be classed as intelligent when he, for example, has great hand-eye coordination and awareness of space – and therefore becomes a great basketball or football player. Someone can have great emotional intelligence and therefore be able to connect with other people and become a great leader. Others might have great musical ability and become composers or musicians. All of these people wouldn’t necessary need a high score on an IQ test, since it only assesses linguistic and logical-mathematical skills.

The above example hopefully illustrates that measures in performance management systems cannot capture the entire truth when it comes to intangibles. However, they can indicate the level of performance. They are therefore indicators, rather then measures, and have to be treated as such.

When performance managements and performance measurement clash

Organizations who implement performance management fall into the measurement trap when they don’t link their indicators to the strategy of the organization and when they attempt to quantify the unquantifiable or measure everything that is easy to measure without focusing on the relevant and meaningful indicators in order to use them for strategic decision making and learning.