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Abstract: This article explores the limitations of traditional performance metrics commonly used in organizations and proposes alternative approaches for measuring what truly drives success in the modern workplace. It is argued that an overreliance on narrowly quantitative targets can distort priorities, undermine employee well-being and job satisfaction, dilute customer focus, and even encourage unethical behaviors. While metrics provide useful data, a more holistic view is needed to account for important qualitative factors linked to engagement, collaboration, innovation and outcomes. The article then outlines methods for systematically measuring soft skills and intangible attributes through surveys, interviews, feedback discussions, and job design analysis. Practical examples are also provided of leading companies that have operationalized blended quantitative-qualitative systems focusing more on people than numbers alone. A multifaceted, outcomes-based model is advocated for building high performance sustainably over the long term.
Since the beginning of the Industrial Era, organizations have relied heavily on quantitative metrics to gauge performance and productivity. While metrics provide useful data, focusing too narrowly on numbers can distort priorities and undermine what truly drives long-term success: people. After decades spent in academia and consulting, I've witnessed firsthand how misguided measurement practices can demotivate employees and damage company culture. There is a better way forward that leverages qualitative data to cultivate engaged workers and high performance.
Today we will explore alternative approaches that get to the heart of what matters most in the modern workplace.
Traditional Metrics: Shortcomings and Unintended Consequences
Traditional performance metrics revolve around easily quantifiable outputs like revenue, profits, units produced, and transactions completed (Piccolo & Colquitt, 2006). However, reliance on narrow numeric targets can breed unhealthy behaviors and neglect important qualitative factors (e.g. customer satisfaction, job satisfaction, collaboration) shown to impact organizational outcomes (Guzzo et al., 1987; Hackman & Oldham, 1980). When bonuses and rewards hinge entirely on quantitative metrics, employees may focus solely on reaching targets rather than understanding customer needs or innovating in a sustainable way (Lawler et al., 1995). This leads to "gaming the system" through corner-cutting or distorted reporting (Andersen & Cheng, 2018; Banker et al., 1996).
Job satisfaction, collaboration, and innovation suffer. Traditional metrics give little consideration to employee well-being, teamwork, or creativity—despite their proven importance (Gagné & Deci, 2005; Oldham & Cummings, 1996). Workers start to view their efforts instrumentally rather than taking pride in high-quality work (Amabile et al., 2004). Continuous improvements and new ideas are stifled when daily tasks revolve around chasing numbers (Hunter et al., 2007).
Customer focus is diluted. When financial targets overshadow all else, employees lose sight of their customers' real problems and needs (Gupta & Zeithaml, 2006). Quantity and speed trump quality of interactions or solutions (Heatherly et al., 2001). Dissatisfied customers will gradually opt for alternatives as customer service erodes (Reichheld, 2003).
Gaming and unethical behaviors surface. Under undue metric pressure, some will prioritize appearances over substance by manipulating data or cutting corners undetectably (Banker et al., 1996). A narrow focus on maximizing short-term metrics encourages unethical decisions that damage long-term sustainability and trust (Camerer, 2000; Ordóñez et al., 2009).
Clearly, traditional metrics are limited and come with serious downsides if taken too far. A broader view is needed to get the full picture of what creates value in today's knowledge economy. But how can qualitative factors be measured effectively?
Measuring Soft Skills and Intangibles
Quantitative metrics provide a simple, standardized way to track performance but fail to capture many drivers of organizational success. Qualitative data like employee engagement, collaboration, adaptability, and customer satisfaction are equally if not more important, yet inherently more difficult to quantify (Guest, 2011). Thankfully, alternative measurement approaches have emerged that offer valid, reliable insights into "soft" constructs.
Surveys. Carefully designed surveys using validated scales can measure qualitative attributes like employee engagement, well-being, leadership, innovation climate and more (Harter et al., 2002). Regular "pulse checks" via brief anonymous surveys identify issues early and track improvements over time (Gallup, 2017).
Interviews and focus groups. Speaking directly with employees, customers and stakeholders via individual or group interviews surfaces valuable qualitative feedback and stories that surveys alone may miss (Mack et al., 2005). Themes, sentiments and suggestions gleaned provide a human perspective.
Performance discussions. Structured, developmental conversations between managers and direct reports can evaluate competencies more holistically while checking-in on well-being, priorities and goals (Pichler, 2012). Qualitative feedback is shared and documented for individual development.
Multisource/360-degree feedback. Gathering confidential input from one's manager, peers, direct reports, customers and others reveals strengths and weaknesses across critical soft skills from varied perspectives (Church & Waclawski, 1998). This promotes balanced, helpful self-awareness.
Job design analysis. Analyzing tasks and responsibilities reveals whether roles are structured to best utilize employees' varying skillsets, keeping work engaging and meaningful (Hackman & Oldham, 1980). Opportunities for more autonomy, variety, impact and feedback come to light.
With the right tools and approach, qualitative attributes shown to really impact performance can be monitored systematically and actionably. Forward-thinking companies now blend both types of data for a complete picture.
Putting it into Practice
Leading organizations are already recognizing that people, not numbers alone, drive performance in today's economy. Let's examine how innovative firms have operationalized a more holistic, outcomes-based approach.
Salesforce. Rather than obsess over quarterly targets, Salesforce's Culture Code focuses on fostering trust, customer success, innovation and equality (Taylor, 2019). Compensation weighs customer satisfaction highly. Leaderboards acknowledge top countries/teams for new ideas over closed deals, keeping collaboration and creativity strong.
Google. While revenues are tracked, Google prioritizes employee well-being, diversity and learning over individual metrics. Perks like free meals, onsite services and optional 20% creative time encourage work-life integration and outside-the-box thinking (O'Brien, 2018). Surveys and feedback help management support needs.
Zappos. Zappos thrives through cultivating a familial, values-driven culture where individuals are empowered (Hsieh, 2010). Strong company bonds are crucial, so qualitative factors like mentorship, friendliness and fun come before bottom lines. Regular surveys and anonymous feedback steer continuous improvements.
Adobe. Adobe examines engagement and innovation factors for each team along with financial targets. Managers receive coaching on people skills, with quantitative performance metrics constituting only 30% of annual reviews (Lee, 2015). Development supersedes discipline to strengthen leadership and adaptability.
Conclusion
As society progresses, so too must workplaces recognize that non-financial drivers like relationships, well-being and personal growth increasingly matter to employees and shape business results. Though traditional metrics provide important data, a narrow focus on numbers to the exclusion of qualitative factors risks damaging culture and losing sight of what really creates value. A blended approach that systematically measures both hard and soft outputs offers a complete picture upon which to build high performance sustainably over the long term. When organizations prioritize treating people, not numbers, as their most important asset, both business success and humanity stand to benefit. It is time we redefined 'what matters' at work from a more holistic perspective.
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Additional Reading
Westover, J. H. (2024). Optimizing Organizations: Reinvention through People, Adapted Mindsets, and the Dynamics of Change. HCI Academic Press. doi.org/10.70175/hclpress.2024.3
Westover, J. H. (2024). Reinventing Leadership: People-Centered Strategies for Empowering Organizational Change. HCI Academic Press. doi.org/10.70175/hclpress.2024.4
Westover, J. H. (2024). Cultivating Engagement: Mastering Inclusive Leadership, Culture Change, and Data-Informed Decision Making. HCI Academic Press. doi.org/10.70175/hclpress.2024.5
Westover, J. H. (2024). Energizing Innovation: Inspiring Peak Performance through Talent, Culture, and Growth. HCI Academic Press. doi.org/10.70175/hclpress.2024.6
Westover, J. H. (2024). Championing Performance: Aligning Organizational and Employee Trust, Purpose, and Well-Being. HCI Academic Press. doi.org/10.70175/hclpress.2024.7
Citation: Westover, J. H. (2024). Workforce Evolution: Strategies for Adapting to Changing Human Capital Needs. HCI Academic Press. doi.org/10.70175/hclpress.2024.8
Westover, J. H. (2024). Navigating Change: Keys to Organizational Agility, Innovation, and Impact. HCI Academic Press. doi.org/10.70175/hclpress.2024.11
Westover, J. H. (2024). Inspiring Purpose: Leading People and Unlocking Human Capacity in the Workplace. HCI Academic Press. doi.org/10.70175/hclpress.2024.12
Jonathan H. Westover, PhD is Chief Academic & Learning Officer (HCI Academy); Chair/Professor, Organizational Leadership (UVU); OD Consultant (Human Capital Innovations). Read Jonathan Westover's executive profile here.
Suggested Citation: Westover, J. H. (2024). Beyond Metrics: Measuring What Truly Drives Success At Work. Human Capital Leadership Review, 15(1). doi.org/10.70175/hclreview.2020.15.1.6
