Table of Contents
Exemplifying scenarios............................................................................................ 2
Problem of control .................................................................................................. 3
Forms of control ...................................................................................................... 4
1. Action control .......................................................................................................... 4
- Examples ..................................................................................................................................4
2. Personnel control ..................................................................................................... 5
- Examples ..................................................................................................................................5
3. Results control ......................................................................................................... 6
- Examples ..................................................................................................................................6
Implementing a results system ................................................................................ 6
1. Performance dimensions .......................................................................................... 7
- Examples ..................................................................................................................................7
2. Measure performance .............................................................................................. 7
3. Performance targets ................................................................................................. 8
4. Set rewards and incentives ....................................................................................... 8
Unintended consequences ...................................................................................... 9
- Examples ..................................................................................................................................9
Takeaways of performance measurement ............................................................... 11
, Introduction to performance management
In today's class we're going to learn some introductory concepts around performance management.
I'll also sensitize you to some of the common problems with performance management. These are
the unintended consequences of management. This will lay the foundations for the next classes.
Today we are going to learn about controllability in an organization, we're going to know the
forms of management control, we're going to learn how to implement performance
measurement, and we're going to finally examine the potential dysfunctional effects of
performance measurement and control.
Exemplifying scenarios
Alright, so let me start with some scenarios. In 2016 Wells Fargo was subject to a very public
scandal. Employees were given aggressive targets. A personal banker was expected to sell 20 to
15 products a day. Employees opened more than 2 million fake accounts to meet sales quotas and
one employee noted “I am not sure how that's possible within an 8 hour day of work”. Pretty much
every customer takes an hour. And the fallout was catastrophic for the bank, for its customers, its
employees, and even for the CEO.
This one is in 2002 and it stars two clerical workers at the US Immigration and Naturalization
Service. They were accused of destroying thousands of immigration documents, visa applications,
passports, etc. And according to an investigation, the clerks started shredding unprocessed
paperwork in early 2002 to decrease the backlog of 90,000 documents. By late 2002 the backlog
was reported at 0. One can say that they were entrepreneurial, but we'll get back to this later on.
What about this scenario? The UK governments recently set a target for all National Health Service
hospitals to treat patients within 4 hours of admitting them. There are no financial penalties and
rewards for meeting the target, but performance is reported publicly on the Hospital Compare
website.
Ok, finally, this is a clip from The Wire, a show that was on HBO in the early 2000s. And in this
clip we can appreciate how targets are set in the Baltimore Police Department. And these targets
come from the mayor's office.
“Feelin' a little phased, Colonel Foster? A little dyspeptic?
Dys-who? No, sir. I'm good to go.
Here's a fun fact for you people.
If Baltimore had New York's population, we'd be clocking 4,000 murders a year at this ring. There
is no excuse I will accept. I don't care how you do it. Just fuckin' do it.
Exemplifying scenarios............................................................................................ 2
Problem of control .................................................................................................. 3
Forms of control ...................................................................................................... 4
1. Action control .......................................................................................................... 4
- Examples ..................................................................................................................................4
2. Personnel control ..................................................................................................... 5
- Examples ..................................................................................................................................5
3. Results control ......................................................................................................... 6
- Examples ..................................................................................................................................6
Implementing a results system ................................................................................ 6
1. Performance dimensions .......................................................................................... 7
- Examples ..................................................................................................................................7
2. Measure performance .............................................................................................. 7
3. Performance targets ................................................................................................. 8
4. Set rewards and incentives ....................................................................................... 8
Unintended consequences ...................................................................................... 9
- Examples ..................................................................................................................................9
Takeaways of performance measurement ............................................................... 11
, Introduction to performance management
In today's class we're going to learn some introductory concepts around performance management.
I'll also sensitize you to some of the common problems with performance management. These are
the unintended consequences of management. This will lay the foundations for the next classes.
Today we are going to learn about controllability in an organization, we're going to know the
forms of management control, we're going to learn how to implement performance
measurement, and we're going to finally examine the potential dysfunctional effects of
performance measurement and control.
Exemplifying scenarios
Alright, so let me start with some scenarios. In 2016 Wells Fargo was subject to a very public
scandal. Employees were given aggressive targets. A personal banker was expected to sell 20 to
15 products a day. Employees opened more than 2 million fake accounts to meet sales quotas and
one employee noted “I am not sure how that's possible within an 8 hour day of work”. Pretty much
every customer takes an hour. And the fallout was catastrophic for the bank, for its customers, its
employees, and even for the CEO.
This one is in 2002 and it stars two clerical workers at the US Immigration and Naturalization
Service. They were accused of destroying thousands of immigration documents, visa applications,
passports, etc. And according to an investigation, the clerks started shredding unprocessed
paperwork in early 2002 to decrease the backlog of 90,000 documents. By late 2002 the backlog
was reported at 0. One can say that they were entrepreneurial, but we'll get back to this later on.
What about this scenario? The UK governments recently set a target for all National Health Service
hospitals to treat patients within 4 hours of admitting them. There are no financial penalties and
rewards for meeting the target, but performance is reported publicly on the Hospital Compare
website.
Ok, finally, this is a clip from The Wire, a show that was on HBO in the early 2000s. And in this
clip we can appreciate how targets are set in the Baltimore Police Department. And these targets
come from the mayor's office.
“Feelin' a little phased, Colonel Foster? A little dyspeptic?
Dys-who? No, sir. I'm good to go.
Here's a fun fact for you people.
If Baltimore had New York's population, we'd be clocking 4,000 murders a year at this ring. There
is no excuse I will accept. I don't care how you do it. Just fuckin' do it.
