Big Data has made it possible to measure employee performance more thoroughly than ever. But two recent studies offer a warning: Be careful about how you deploy that data.
Many managers assume that distributing a ranking of their employees’ performance is an effective motivational tool, said Iwan Barankay, an associate professor at the Wharton School at the University of Pennsylvania. The idea is that lower-ranking employees will strive to improve, while higher-ranking ones will work to maintain their edge.
Professor Barankay sought to test this assumption in a study of 1,500 furniture sales workers that he conducted over three years in North America. One group of sales workers was shown how their sales ranked compared with their colleagues. Another group was not shown a comparison, but only their individual results.
Professor Barankay found that the sales representatives who did not know how they ranked achieved higher subsequent sales than those who were aware of their comparative ranking. The results of the workers who had received high rankings neither improved nor worsened.
Competition in a collaborative environment doesn’t work well,” Professor Blader said. In team-based environments, it may be better to inform each employee of his or her performance individually rather than as part of a group ranking. But if a company’s culture is self focused rather than team focused, publicizing rankings may be effective, he said.
So why do the Feds and many state leaders want to use this failing method?
What are their real goals when even Wharton says it is a bad idea?