HR Group, founded in Edmonton Alberta in 1993, is a partnership of highly experienced management consultants who specialize in organizational effectiveness and human resource management, and promote participative, lean, and cost-effective management practices. All partners are Certified Human Resource Practitioners with extensive senior level experience in both the private and public sectors.

Quantitative vs. Qualitative

Reprinted from “Productive Workplaces” (October, 2011), the HR Group newsletter.

Peter Drucker once said that “what gets measured, gets managed”. Today you cannot escape the prevalence of management metrics to measure all aspects of organizational as well as individual performance. KPIs or Key Performance Indicators include such measurements as CPO or cost per order, number of sales, number of defects, number of dissatisfied customers, and the list is virtually endless. Metrics specific to Human Resources are also prevalent and include such measurements as revenue per FTE (full-time equivalent), absenteeism rates, labor cost per FTE, turnover rates, and HR costs per FTE. User interfaces called “dashboards” are developed to present all this data in a way that is easy to read and comprehend.  

According to businessdictionary.com, metrics are “standards of measurement by which efficiency, performance, progress, or quality of a plan, process, or product can be assessed.” The use of such measurement tools is heavily emphasized in most schools of business and MBA programs. It is undoubtedly true that metrics are an extremely valuable tool in measuring both overall as well as specific performance, productivity, quality, and cost effectiveness. It is hard to understand why so many organizations and managers have not used metrics and how so many companies have survived without their extensive usage.

But there is also a serious downside to this growing reliance on metrics. Managers are taught to rely on such measurements as they are supposedly more reliable, more objective, and fairer than any personal or qualitative analysis. They feel more comfortable in dealing with hard and cold measurements rather than any qualitative assessments. Metrics, in fact, are increasingly being used to the exclusion of any qualitative analysis, because it removes the aspect of personal judgement and assessment. Society in general reflects the same trend as individual values and opinions are called subjective and everything has to be backed up with quantitative statistics to be believed, no matter that these same statistics are developed, in many cases, by those with highly subjective viewpoints that they are trying to promote.

It is so much easier to hide behind statistics rather than make and defend decisions based on your own personal judgement. In assessing someone’s performance, for example, it is far easier to defend a poor evaluation and less than a full salary increase by telling an employee that they didn’t score well enough on a quantitative evaluation system, than it is to explain and defend specifically what competencies need improving and why and to accept the responsibility of personally coaching their performance. The majority of issues of poor performance are not readily quantifiable, anyway, and are those, for example, of attitude, poor fit, lack of cooperation, and poor management style. As we have often stated, it is a manager’s prime responsibility to exercise their discretion and deal with performance issues. If they don’t, then what are they “managing”?

What is also forgotten, is that the performance evaluation factors and the quantitative rating assigned to each factor must be based in the first place on someone’s qualitative or subjective input; usually that of senior management and the Human Resources Department. It is impossible to avoid such qualitative input at some stage in any evaluation process. We cannot avoid the use of our own personal judgement – nor should we.

In assessing overall organizational effectiveness, “best practice” organizational reviews are based on a participative process where as many staff as possible are personally and confidentially interviewed. The main rationale for such a process is obvious. It is the employees that usually know best how the work should and can be done in the most cost effective and productive manner and, therefore, are most aware of what is impeding improvement and what needs to be changed. The internal or external consultants’ job is to gather the input, to add their own generic expertise in organizational effectiveness and best practices, and to present the results in a coherent and meaningful manner with logical recommendations. Yet there are those who suggest that such analysis is based on biased opinions and that quantitative data from KPIs is more objective and fair. The selection of those KPIs, however, and the determination of what the acceptable quantifiable standards should be are based on qualitative or subjective input. What better way to review an organization’s performance than to personally interview all staff and allow them to provide whatever input they feel is relevant and be able to probe where necessary to fully determine the why as well as the what? If the majority of such employee feedback identifies certain issues, is this not objective and quantifiable data?

Some even suggest that quantitative employee satisfaction and other surveys are a more objective means of reviewing organizational performance. Yet the metrics derived from such surveys won’t show, for example, whether an organizational structure is efficient, whether departments need to be realigned, whether there is too much departmental turf protection with poor lateral communications,  or whether management is ineffective. All of this requires face to face employee feedback with effective probing and qualitative analysis. The metrics may well be indicators to a trained observer or analyst, but then you still need to know the why and what to do to fix the issues and metrics can’t tell you that.

No amount of quantitative measurements is going to find out all the invaluable qualitative information, for example, that an “undercover boss” can discover. That is why good managers are constantly seeking and evaluating the feedback of all staff at all levels. They are constantly performing their own organizational reviews.

The choice of metrics is also of key importance in determining their usefulness. HR Metrics, for example, frequently include the percentage of completed performance evaluations as a measure of HR effectiveness. Yet traditional performance evaluations do not reflect best practice and have no bearing on the strategic relevance of HR to an organization. Health Care institutions are frequently using the metric of waiting times to be admitted to hospital and treatment as an indicator of their performance. Yet waiting times are primarily a reflection of staffing and budgets that are constantly manipulated for political reasons. Waiting times do little to reflect the actual effectiveness and efficiency of overall health care practices, procedures, and management.

Another example are ISO programs and their metrics which measure standardization in production, but standardized excellence or mediocrity? Someone has to determine what the proper standards are and this again entails the use of judgement and discretion.

The excuse frequently made for the growing reliance on metrics is that they prevent the use of poor judgement on the part of some managers. Well if that’s the case then those managers should have their performance properly assessed and coached so that they can exercise better discretion in the future. More metrics are not a viable solution to the exercise of poor judgement.

Metrics don’t tell you if you’re at maximum possible productivity or best service. They can only tell you what the statistics are and whether or not you’re meeting the goals that someone had to input in the first place based on their judgement and discretion. It is only through the input of all staff that one can determine whether or not maximum possible production has been reached – Lean management, for example, demands employee participation to eliminate all wasted steps in any given process that do not add value.

Why choose an artificial metric performance goal in the first place? Why not just try and create a productive workplace culture where continuous improvement and quality are considered the norm?

Metrics can tell you what but not necessarily why or how to improve; it’s staff that can provide the why and the how. This is why it is absolutely necessary to have a fully participative workplace with employees at all levels who are fully engaged and can freely provide their ongoing input. The human element must come first and the quantitative elements are there as back-up. Metrics are a highly useful aid to effective personal judgement and discretion, but they are not a replacement.