Management consultants and finance leaders often claim that ‘what gets measured gets managed’ or ‘what gets measured gets done’. However, greater use of measurement is not always a good thing – especially as AI-driven analytics permit increasingly granular, moment-by-moment tracking of employee performance.
Consider a typical sales activity leaderboard monitoring client acquisition figures or revenue generation. While driving sales, it could tempt some salespeople to steal clients from colleagues or engage in unethical practices to sign deals.
Tighter monitoring may encourage employees to look for employers who trust them more
A finance leaderboard reporting on transactions completed could inadvertently discourage professionals from helping or mentoring colleagues – because doing so reduces the time they have to achieve their personal metrics. Reporting on real-time cashflow could reduce decision makers’ willingness to invest in high-return opportunities that have longer time frames.
Increased stress
Moving away from hypothetical examples, data collected from within real organisations questions whether extensive monitoring works. A recent meta-analysis led by Daniel Ravid at The George Washington University examined performance in 94 separate teams comprising 23,461 employees. They concluded there was no evidence that technological monitoring improved performance. The only consistent outcome was increased employee stress.
A separate investigation led by researcher Cornelius König found that monitoring’s overall impact on performance was broadly neutral – neither good nor bad. Again, there was a consistent link with higher stress and lower job satisfaction.
Taken together, these findings have important implications. Tighter monitoring does not reliably improve job performance. However, it does tend to frustrate employees – and may encourage them to look for employers who trust them more.
Does quality of thinking, judgment and creativity matter more?
Organisational psychologists speak of two kinds of motivation. Intrinsic motivation is the drive people feel when they find work genuinely engaging – solving problems, developing new skills and doing work they feel proud of. Extrinsic motivation is the kind that comes from being monitored and rewarded or punished – whether through bonuses, positions on a leaderboard or the disapproval of managers when targets are not met.
Quality vs quantity
An influential meta-analysis led by Christopher Cerasoli found that intrinsic motivation was the better predictor of work quality; extrinsic incentives were a better predictor of sheer quantity. This distinction matters enormously. Leaders should think about whether their organisation’s success is driven mainly by volume and production output – number of transactions processed, products manufactured – or does quality of thinking, judgment and creativity matter more?
It is difficult to quantify innovation meaningfully. Some organisations have tried tracking numbers of ideas submitted by employees. But evaluating quality – for example, whether ideas get implemented and deliver real value – has proven extraordinarily difficult.
Heavy reliance on targets and measurement sharpens focus on whatever is being tracked – but inevitably detracts from everything that is not. As a result, unmeasured aspects of people’s work tends to suffer: collaboration, ethical conduct, creativity and complex problem solving, and genuine customer care.
Leadership disconnect
Organisational research consistently points to three factors that boost motivation and therefore performance: autonomy, belongingness and competence. Professionals produce the highest quality of work when they feel they have a say in not only how they do their work but also the tasks and projects they are given in the first place. Belongingness describes having a genuine sense of social connection and mutual caring with colleagues. Competence is the sense of mastering new skills over time.
The success of most organisations depends on human factors that are incredibly hard to quantify
There is often a disconnect between what leaders think applies to themselves versus their employees. When leaders reflect on their own best performance, they typically say they thrived when they were trusted, had colleagues they genuinely liked, and developed new skills. In other words, they experienced autonomy, belongingness, and competence. Yet those same leaders often feel that their own employees need tighter monitoring to ensure compliance with what is required of them.
Of course, dashboards and metrics have their place. In high-risk industries or compliance-critical roles, monitoring serves a crucial function. However, the success of most organisations – particularly professional services firms – depends on human factors that are incredibly hard to quantify. Just because AI makes it cheap and easy to monitor many aspects of performance does not mean that we should.
My advice for leaders is to give people real ownership over how they do their work. Encourage them to pursue projects that they find genuinely interesting. Show genuine interest in them as individuals so that they feel socially connected to you. Provide opportunities for them to learn and feel stretched – not just measured and monitored.
More information
Watch Dr Rob Yeung’s video on three factors that make work worthwhile
