Once upon a time, a project manager (whose customer service project contained a large information system component) needed high productivity from the programming staff. The PM argued long and hard that in order to run successful projects, managers need authority. Finally, the PM killed the dragon of the management hierarchy in the organization and secured the authority to directly assign work to and reward the work of the project team members. It was a day of celebration and revelry for every project manager in the organization.
But in the sober light of the next day, the PM was uncertain about how to use the new authority. Should every team member get a performance review at the end of each assignment or just at the end of the project? How closely should the work be monitored? After long thought, the PM made a decision.
After some planning, the PM decided to measure programmers' performance according to the number of lines of code they wrote. Linking rewards to this metric, the PM gave out $1,000 end-of-project bonuses.
Not surprisingly, the programmers wrote thousands of lines of code, crushed the metric under a deluge of programming and earned their bonuses. Equally predictably, the resulting system failed to improve customer service. As a result, the PM lived a miserable, lonely life as a stable sweeper. Worse, no PM was ever again granted assignment and reward authority over the people on their project teams.
One of the morals of this story is that the activity of writing code, while certainly necessary, did not really count. What counted was improving customer service. The PM should have counted and rewarded the programmer's measured contribution to the larger customer service achievement rather than the activity of coding. This is achievement-driven project management. Another moral in this story concerns the amount of reward "horsepower" to put behind whatever performance metric we use. Only when we have mastered the art of assigning measured achievements can we dole out large rewards for reaching those achievements.
Clarity, Commitment and Consequences
Unfortunately, when PMs find that they are measuring the wrong thing, they often respond by measuring nothing. They rely on subjective evaluations of performance, often with the goal communicated after the fact. The result is a lack of Clarity about what is expected, lack of team member Commitment to achieving the result and an inability to dole out appropriate Consequences for performance.
This "measuring nothing" approach paralyzes a project team. Good performers receive the same reward as bad performers; and thus, we remove the incentive to do well. No one understands what is expected so people think "Well, I'll just rough something out, the PM doesn't ever decide what he wants until we're halfway done anyway."
So, we see the problems that come from counting the wrong thing and the problems that come from measuring nothing. The solution comes from measuring achievements.
Activities versus Measured Achievements
Readers familiar with our Achievement-driven Project Management understand the difference between activities and achievements. In the example about the programmers above, writing code is an activity necessary to reach some measured achievement. This measured achievement might be providing the user with a history screen that displays six months of customer transactions in less than 30 seconds. When we manage project team members with measured achievements like that, we do not have to worry about counting the wrong thing. We clearly communicate to the programmers the achievement we want and can reward performance against that achievement appropriately.
Developing measured achievements down at the level of individual team members is not easy but it is well worth the effort (see developing measures of success). Using a measured achievement as the heart of your assignment process with individuals, cures the 3C's problems quite nicely. It gives us the ability to communicate expectations with clarity, gain commitment and then render consequences appropriate to the individual's achievement (or lack there of).
Consequence Horsepower: How Much Is Too Much
The second decision a PM must make concerns the magnitude of the consequences we associate with the measured achievements. Clearly we are not going to fire everyone (even if we could) who fails to reach his or her assigned achievement. Likewise, we are not going to tie a bonus equal to 50% of a person's annual pay to an achievement that requires 1 month of effort. These are questions of consequence "horsepower." The more horsepower we link with an achievement the more behavior modification we should expect.
On the one hand, we want people on our projects to "see" a strong link between consequences and performance. Good performers should "see" that the PM identifies and rewards their performance appropriately. Bad performers should "see" the same thing. However, we do not want so much horsepower behind an achievement that people ignore any issue that is not linked with the reward.
The wise project manager designs reward structures (monetary and non-monetary) based on a person's risk tolerance, deciding how much of a person's reward should be "at risk" based on performance. If we are moving from an "entitlement" culture, where people view their rewards as unlinked to achievement, we must move slowly. In the beginning, we link a relatively small part of the total reward to performance. As people's comfort and performance level increase the proportion of "at risk" reward can grow.
In sum, we have discussed the problems associated with counting the wrong elements of performance and the problems associated with measuring nothing. The solution lies in measuring the elements of performance that are directly linked to the project's overall measure of success.
