Measurement Madness: Recognizing and Avoiding the Pitfalls of Performance Measurement

Chapter 7Gaming and Cheating

The managing director of a small pharmaceuticals company in Russia was determined to combat the endemic tardiness of his employees. He considered a number of ways of doing this, even incentivizing his workers financially, just for turning up on time. However, eventually he decided that his best course of action was to punish his staff for their lateness. Therefore, he introduced a system of fines whereby an employee would be fined the equivalent of $1 for every minute he or she was late. So, if an employee was ten minutes late, an equivalent of ten US dollars was deducted from their monthly pay cheque. The information on who was on time was easily collectable, as the workers had to “swipe in” using magnetic cards. After the system was implemented, the records showed that the managing director was now achieving perfect punctuality, although productivity did not seem to be improving. A closer examination of the behaviour of the workforce showed that the majority of them did show up at 09:00 sharp or slightly earlier, but then proceeded to have breakfast, drink coffee, do their makeup and check their bank balances on the Internet – all using the company's resources. Those who did not want to get out of bed earlier, however, came up with a new and much more elaborate solution – their swipe cards would be given to a designated person, who was rotated and who would show up on time to swipe the whole stack of cards through the entrance scanner before 09:00. ...