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KPI = Key Performance Indicator. It's basically a list of things that are considered during your evaluation. The more items off that check list you cross (if th
by alxlaz 5y ago
KPI = Key Performance Indicator. It's basically a list of things that are considered during your evaluation. The more items off that check list you cross (if they're one-time items, like "ensure an uptime of X"), or the more of each you do (if they're things like "upstream patches" or "patents granted"), the better your score is.
It's a shit system that does exactly the opposite of what it's supposed to do IMHO, but that kind of stuff doesn't belong in an ELI5 explanation :-D.
- lmilcin 5y agoKPIs are not a shit system, they are actually important to running any nontrivial organization. The issue isn't whether KPIs are good or bad but what you do with them. KPIs don't need to be tied to actual people, usually they are tied to teams, systems, projects, processes, etc. For example, a number of users resigning from our services might be a KPI. KPIs are an important tool to understand what is going on and whether we are going in the desired direction or not and to communicate this to your teams. KPIs are a tool for telling your organization what you think is important, to set the incentives in the right direction. KPIs will not help you if you have no effing idea how to set incentives -- they are just a tool in case you know what you are doing. Because they are just one step from being a target for your teams, you need to be very careful to communicate what you mean exactly when you set KPIs. Now, if you make number of users resigning from your services a KPI, you immediately need to set some additional guarantees that this is not overused -- for example by making it difficult for your clients to resign. This might be another KPI (user satisfaction with regards to how easy it was for them to resign).
- Clewza313 5y agoGoodhart's law: when a measure becomes a target, it ceases to be a good measure. Humans are extremely good at gaming KPIs, and will do so as long as they're rewarded for it.
- lmilcin 5y agoOveruse law. If you overuse a law too much it stops being meaningful. Organizations have hard time improving without measuring their performance and communicating incentives. There isn't magical solution you can scribe on a paper and tell everybody -- this is exactly what you need to do to achieve success. The best what you can do is compromise, it is unavoidable. So we know setting targets can make wrong incentives. It is also not a reason to not be setting targets. It is a reason to make sure you damn set those incentives right and take close look that you are getting what you have intended.
- Tainnor 5y agoThe point they're trying to make is, I believe, that metrics shouldn't be targets. In a sense I think that this is obvious to anyone with a rudimentary understanding of applied statistics.
- dtech 5y agoYou can't have a (semi-objective) target without a metric.
- Tainnor 5y agoWhat you want to measure and what you actually can measure are usually very distinct things, that's where "operationalization" comes in. You have a target that you can't measure directly, hence you measure a proxy. That only works for as long as people don't game it and aim for the proxy instead of the actual target. Also, in addition, at least in research every statistician worth their salt knows that their proxy is not the actual thing and only their best effort at approximating it, hence in good studies, limitations of the methodology are extensively discussed. Importantly, the moment you realise that your proxy is being gamed, you need to switch proxy. I think this is only one example of this annoying trend of pretending to be "data-driven" by coopting numbers and fancy statistics without also adopting everything we know about uncertainty and how we can quantify it. "Data" in many businesses often implies a level of clarity ("look, the graph always goes up") that often does not actually exist and I suspect that this can be hard to understand for certain types of managers.
- shkkmo 5y agoWhich would indicate that the issue is not using KPIs to understand how your business is performing, but providing incentives based on KPIs.
- Ericson2314 5y agoThis is trite. Just about any way of understanding something is going to create perverse incentives. Keeping the metrics secret has other problems too. I don't think there is a a good solution. Maybe with radically shortened work hours and less pay disparity, the strives can strive off the job instead.
- Ericson2314 5y agoActually I'm being silly, there is a good solution: Workplace Democracy. You can fool the higher ups come promotion time, but you can't fool all the people all the time. Mondragon please get in the tech biz.
- andrey_utkin 5y agoCould you please show some real-world examples of this practice?
- Ericson2314 5y agoI am familiar with tech co-ops, but they are small, and so not good evidence.
- nsonha 5y agoDidn't Donal Trump fool a lot of people in a democracy? And how does this have anything to do with metrics?
- patrick451 5y agoNo, he didn't fool us.
- croes 5y agoRather Marilyn Strathern's rephrasing. The original quote is "Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes."
- alxlaz 5y ago> KPIs don't need to be tied to actual people, usually they are tied to teams, systems, projects, processes, etc. Right, but my post, the post I was responding to, the post the post I was responding to was responding to, and the article in the link, was specifically about a situation where KPIs are tied to actual people. I'm not sure what you're arguing for or against.
- fungiblecog 5y agoMeasuring things is important, but turning them into a target is a disaster. The term KPI is generally used when the measure is a target.
- mbrodersen 5y agoI have seen many examples of KPI’s not working as intended. Do you have any real world examples of KPI’s that actually worked in practice (and not just in the make-believe heads of managers)?
- jart 5y agoI didn't know open source programmers were subjected to those kinds of performance reviews. It sounds to me like the pandas have come and visited the penguins and there's a whole lot of shock and horror as the penguins get eaten because you'd think the pandas only want bamboo.
- sosborn 5y agoA great many open source programmers are being paid salary and sitting in a corporate cubicle.
- na85 5y agoKPIs are actually very good when used properly, but they are (like many things) easily misused. For example if you provide a service then your obvious choice for the team's primary KPI would be service uptime. Use SMART objectives (Specific, Measurable, Achievable, Relevant, Time-bounded) and set a realistic service uptime (e.g. how many nines you want in a given month/quarter/whatever) and KPIs directly enable good decisionmaking at all levels of the org. Manager up in your grill about a choice you made? Point at the KPIs and say "this will help make it easier to meet our objectives for KPI 1.1" or whatever.