Are Your Best People 'Gaming the System'?

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Let’s talk measurements. After the difficulty of getting your senior team to buy into a system of measurement, you also need to be aware that, once you are measuring things and setting consequences for the outputs, you have just created a game.

This is important because games are things that humans are, by and large, pretty good at. Hence the phrase ‘gaming the system’, which means ‘using the rules and procedures meant to protect a system to, instead, manipulate the system for a desired outcome’. In practice this gives people a tendency to ‘cheat’.

This is something that Andy Grove talks about in his excellent book ‘High Output Management’ and Stephen Covey alludes to with his notion of the ‘P/PC balance’ in The Seven Habits of Highly Effective People. Drawing on Aesop’s fable of “The goose and the golden egg” Covey says: 

To maintain the P/PC Balance, the balance between the golden egg (production) and the health and welfare of the goose (production capability) is often a difficult judgement call. But I suggest it is the very essence of effectiveness.

The heart of the problem is this: a lagging indicator can often be delivered in a number of different ways, and some of these may have serious long-term consequences for your organisation.

For example, a manager who is tasked with delivering higher revenue in a hurry might do this by massively overworking their staff. In the short-term, this works because people will respond to the challenge. But, over time, people will wear out, become mentally tired, are unable to produce great work and are left feeling resentful. This is bad news. 

In this case, short-term revenue is likely to spike and the manager may well earn their promotion. But the consequences in the long-term are that revenue may start to suffer, as quality slides further and further. It is likely that this will not only lead to customer dissatisfaction, but morale drops for the team internally and the best people quit.

I’ve used an extreme example to illustrate the point but this kind of gaming can be very subtle; people are not always consciously aware that they are doing it. You hire good people, they won’t deliberately sabotage your business but doing the ‘right thing’ is often difficult. Even good people will take the easy route when it conforms to their their own biases and needs. 

What this means is that we must be ever-alert to how measuring something can be gamed. We need to think about how we can pair such a measurement with another indicator that tells us something is happening that we need to be aware of. Often this second measure will be a quality or quality-of-life measure.

Going back to my example, if the business was to measure staff satisfaction (perhaps by using an anonymous survey tool on a regular basis) then we might expect that we would see revenue climb but staff satisfaction starting to decrease, then to decrease sharply.

This would be an alert to us that, while we were buying extra revenue, the cost is going to be too high and we need to change something. Essentially forcing the “right decision” to be taken by the business or accept long-term harm.

Instituting a system of measurement is a hard thing to do for several reasons but, given that the alternative is going into these things blind, it’s worth doing well.

Do you have experiences of people gaming the system? Drop me a note - I’d love to hear from you. 

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