Many managers rely too heavily on metrics to make decisions for them. Metrics don't make decisions—they provide guidance. Learn how to use metrics to inform your next decision.
- In some cases, our metric is a rating or a grade. On a scale of one to five, rate the service you received during dinner. On a scale of 1 to 100, rate the person you interviewed this morning. Which letter grade, A to F, does this paper deserve? How do we come up with these scales? How many graduation's levels do we need to have when measuring? Does it really matter? Believe it or not, it really can matter. Let's go back to a metric we're probably all familiar with, getting grades in school.
Traditionally, schools provide grades from an A to F scale. "A" being the highest grade and "F" being the lowest grade. Let's begin with that as our starting point. Suppose we give grades A through F and this is the distribution of our grades for a class. 25% of the class got A's. 40%, B's. 25% got a C. 7% got a D.
And 3% got an F. What do we notice? We really only have three highly populated grades. And the other two grades wouldn't be considered to be satisfactory. An F is really bad. But would you consider a D student as significantly better? On the other end of the scale, 25% of the students get A's. And 40% get B's. Together, they represent 65% of all the students.
If I'm considering hiring someone from this class, and there are 200 people that took the course, taking only A students into consideration gives us 50 candidates. Taking A or B students, gives us 130 candidates. That's a lot of people to consider. But it's much better than a pass-fail system. Using our initial distribution, where A through C is passing and D and F would be failing, we would have 90% of the class pass and 10% fail.
Consider how that might impact student motivation. Also, consider how that might impact teachers. And if you were looking to hire one of these students, you would now have to consider 180 out of the 200 people. So, let's go in the other direction. Let's use plus and minus grades. We now have 11 grades. This gives us additional granularity, a little more detail. Perhaps this system keeps students motivated to always get a higher grade.
As an instructor though, there are many more decisions to make. And for those looking to hire excellent students, only 3% were capable of getting A pluses. More granularity was helpful for those looking to hire the best students. So, how about if we had grades A through Z? 26 grades. And what if they had plus and minus grades? What's the real difference between R minus and an S plus? As you create metrics, consider the number of grades or categories.
It might impact employee motivation, the decisions and workload of the graders, plus it can really affect the ease with which decisions are made.
- Metrics and human behavior
- Common corporate errors in measuring
- Developing a good metric
- Using the performance measurement tune-up
- Avoiding redundancy
- Using dashboards, infographics, and other data visualization tools