The Dangers of KPI Grabbing [Guide for 2023]
What is KPI Grabbing?
KPI Grabbing refers to the process of selectively choosing key performance indicators and focusing specifically on improving these KPIs, often to the detriment of overall business performance.
Example:
Synergy Sales Partners evaluates the performance of its salespeople based on the number of sales calls that each employee makes rather than their total sales. In this case, employees have an incentive to maximize the number of calls that they make, not to actually sell more products.
KPI Grabbing Examples:
Further KPI grabbing examples in various industries include:
1. Healthcare Industry: Doctors may focus on the number of patients they see per day, neglecting the quality of care they provide.
2. Financial Industry: Brokers may focus on the number of trades they made, regardless of whether
3. Education Industry: Teachers may focus on improving test scores rather than fostering critical thinking and creativity in students.
4. Marketing Industry: Marketers may prioritize increasing web traffic without considering whether those website visitors are converting into paying customers.
5. Non-Profit Industry: Directors may focus on the amount of funds raised rather than the impact and effectiveness of the programs funded, creating a focus on fundraising rather than program impact.
6. Hospitality Industry: A focus on room occupancy rates may incentivize hotel managers to overbook rooms or neglect maintenance in order to keep as many rooms occupied as possible.
7. Technology Industry: Measuring lines of code written or features shipped may incentivize developers to prioritize quantity over quality and to push out buggy or incomplete software.
8. Consulting Industry: Measuring performance based on the number of billable hours may incentivize consultants to spend more time on projects than necessary or to focus on low-value work in order to maximize billable hours.
9. Manufacturing Industry: Prioritizing production output may incentivize workers to cut corners and sacrifice quality in order to meet output targets, ultimately reducing profitability.
10. Retail Industry: Prioritizing the number of units sold per sales representative may incentivize salespeople to push lower-quality or less expensive products to increase their sales numbers to the detriment of total sales revenue.
Why is KPI Grabbing Harmful?
KPI grabbing can cause companies to value the quantity of work performed over the quality of that work by manipulating KPIs without making valuable contributions to the organization or focusing on minor metrics that do not contribute to the overall success of the organization.
How to Avoid KPI Grabbing?
1. Focus on Quality, not Quantity
Focusing on quality of work over quantity means prioritizing the value and impact of contributions rather than simply meeting a numerical target.
This approach can minimize the risk of KPI grabbing by promoting a culture of meaningful and impactful work, rather than simply achieving a metric at all costs.
2. Encourage a holistic approach
To avoid individuals or teams from focusing solely on achieving KPIs at the expense of other important factors, it's important to encourage a holistic approach to performance management.
This can involve setting goals and objectives that consider multiple factors beyond just KPIs, such as employee engagement, customer satisfaction, and innovation.
3. Use a Variety of KPIs:
Instead of focusing on a single KPI, use multiple KPIs that provide a more comprehensive picture of the overall performance of the business or project.
This can help prevent individuals or teams from focusing solely on achieving one metric at the expense of others.
4. Collect Data in an Unbiased Manner
It's important to collect data in a way that is representative of the entire population being measured.
This might involve using random sampling techniques or ensuring that data collection processes are consistent across all groups being measured.
5. Use Lido to Track a Wide Variety of KPIs in a Single Dashboard
Lido allows you to collect lots of data from multiple sources in one spreadsheet and build a no-code dashboard to display and manipulate the data. Lido can help prevent KPI grabbing by limiting the selection bias involved in choosing KPIs. Instead, Lido can track all of your data! Get started here.
