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Measuring and Managing Performance in Organizations Paperback – 27 Nov 1996

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Product details

  • Paperback: 230 pages
  • Publisher: John Wiley & Sons (27 Nov. 1996)
  • Language: English
  • ISBN-10: 0932633366
  • ISBN-13: 978-0932633361
  • Product Dimensions: 22.9 x 15.3 x 1.5 cm
  • Average Customer Review: 4.0 out of 5 stars  See all reviews (2 customer reviews)
  • Amazon Bestsellers Rank: 68,968 in Books (See Top 100 in Books)
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Format: Paperback
How should you work round the conflicts of interest that arise whenever one person works for somebody else? I was very keen to read this having personally seen failure after failure as carefully designed measurement systems just made people focus on cheating the system.
Robert Austin provides a careful and detailed analysis of why performance targets cause problems. Unfortunately in describing what doesn't work - and why it can never work - it is difficult to see what we should use to replace metrics. I guess that is for other books to answer.
Compared to other management texts this is pleasantly light on jargon. Simultaneously it has more content than many thicker books. As such it is a pleasure to read and you don't finish feeling that you could have learnt just as much in half the time.
Highly recommended.
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Format: Paperback
This book explores measurement dysfunction - why it doesn't work as expected. And, usefully, takes the measurement of software development as focus because it is encapsulates so many of the issues of performance measurement. Austin develops a model for reasoning about measurement and uses this to look at performance measurement's fragility and the motivations of the measured, the measurers and the experts. It describes how performance measurement is treated in different cultures and suggests where the value of measurement really lays. This book will disturb and provoke those involved in software measurement, especially consultants. It is all the more disturbing because it convincingly makes clear the reasons behind so many of the software measurement problems we encounter.
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Most Helpful Customer Reviews on Amazon.com (beta) (May include reviews from Early Reviewer Rewards Program)

Amazon.com: 4.5 out of 5 stars 22 reviews
7 of 7 people found the following review helpful
5.0 out of 5 stars How have I missed reading this book for so long? 3 Mar. 2010
By Bruce F. Webster - Published on Amazon.com
Format: Paperback Verified Purchase
While research the issue of developer productivity and metrics for a client during this past week, I ran across a reference to this book, so I bought it. I started reading it on a cross-country flight and finished it that same day.

It was a revelation.

I have long been leery of most metrics used in software development, particularly when used to motivate (or punish) developers. This is particularly true since I've been working since the mid-1990s both as a consultant to organizations with troubled IT projects and as an expert witness in lawsuits that involve troubled, disputed, or failed IT projects. Developing software is hard, and measuring what's been accomplished in useful ways is even harder. But my objections have been largely intuitive, observational, and anecdotal.

Austin, by contrast, brings tremendous rigor and a remarkable depth and breadth of research to his approach. His use of the principal-agent model is particularly effective; I will probably be sketching figure 9.2 (or related figures) for years to come.

This is not an easy book to read; it's not a collection of breezy success (or failure) stories with some extrapolated maxims to explain them. It is almost like reading a work of philosophy, but there is nothing abstract or ethereal about it. I learned much, even as I had my own observations and suspicions confirmed. It has my strongest recommendation.
26 of 27 people found the following review helpful
5.0 out of 5 stars A simplified bare-bones model of how a managed organization works 22 Dec. 2006
By Vincent Poirier - Published on Amazon.com
Format: Paperback Verified Purchase
Robert Austin presents an idealized model of a managed organization. Instead of looking at an organization made up of thousands of employees and a few hundred managers arranged in a hierarchy, Austin's model consists of three participants: a principal, i.e. a manager, and an agent, i.e. an employee, and finally a customer who buys the goods or services provided by the agent under the supervision of the principal.

He also assumes that an agent's job consists of two activities and the customer is happy if the agent performs well in both. Austin looks at the cases where the principal can monitor neither of the two activities, where she can monitor only one of the two activities, or where she can monitor both activities. According to the model the agent will behave differently in all three cases.

If the principal cannot (or will not) measure either activity, then we have delegated management, if she can measure both activities, then we have a fully supervised model, and if she can measure only one of two activities, we have a dysfunctional model.

When delegating management, the assumption is that agents want to work well, that they are not deriving maximum satisfaction by exerting the least amount of effort.

When supervising, the principal evaluates overall performance by measuring certain aspects of the agent's activity. Austin's conclusion is that measuring performance won't work unless you can measure everything employees should be doing (i.e. full supervision). Incomplete measurement is not only useless, it is dangerous since it motivates agents to make efforts only for what is measured.

For example, if a help desk line measures performance by the number of calls an employee takes, then employees are motivated to spend very little time per call. The customer is left dissatisfied, but the measurements show that the agent is providing first class results. Austin calls this situation dysfunctional.

Throughout the book, Austin emphasizes dysfunction to the point where it seems he dismisses any and all attempts at measurement, but to quote Austin, the central message of the book is that "organizational measurement is hard". It's not impossible.

He suggests one method, probabilistic measurement, to mitigate dysfunction. For instance, if dysfunction comes from being unable to measure everything an agent does, e.g. you just can't have your supervisors listen to all help desk calls, the principal can carry out random samplings of performance, e.g. you can record all the calls and listen to a random selection of them each day. The agent will then expend effort along those dimensions that cannot be completely measured simply because he knows they might be.

All in all, an effectively simplified model of organizations sure to spark healthy and constructive debate.

Vincent Poirier, Dublin
1 of 1 people found the following review helpful
5.0 out of 5 stars Fundamentally Changed My World View 29 July 2011
By Chip Overclock® - Published on Amazon.com
Format: Paperback Verified Purchase
No, really. I've never looked at the world the same since reading this book many years ago. Austin, a former executive at Ford Motor Company Europe and now on the faculty of Harvard Business School, applies agency theory, an application of game theory, to incentives and performance measurement. Sounds dry, but this book is short, readable, and to the point. It explained so much of the dysfunction I see around me in both work and life in general. I ended up giving a couple of talks about it, recommending it to others, blogging about it (I write under the name "Chip Overclock"), etc. I'm a product developer by trade, and this book applies directly to how large product development organizations are run, or mis-run. I found it so fascinating that I ordered a copy of Austin's Ph.D. thesis, from which this book was derived, and read that too.
3 of 3 people found the following review helpful
3.0 out of 5 stars Left me hanging 26 Dec. 2013
By DocOnDev - Published on Amazon.com
Format: Kindle Edition Verified Purchase
This is a relatively difficult book to read. The structure is convoluted and the author is loquacious.

There is a lot of good information in the book about management styles, use of measurement, and the possible dysfunction that can occur. Unfortunately, the author leaves us with no real answers, only a list of ways things can go wrong. I wasn't looking for a panacea or silver bullet, but the author states they've seen measurement used in a fashion that creates resounding success, but fails to ever share what that looked like in any detail.
3 of 4 people found the following review helpful
5.0 out of 5 stars Measurement, Teamwork, and even Agility Explained 25 April 2010
By Steve Berczuk - Published on Amazon.com
Format: Paperback Verified Purchase
If you thought that performance review processes and incentive systems are often flawed, but wanted to understand why, Austin's book will give you a model to understand dysfunctional measurement processes, and a path to understanding how to avoid the dysfunctions and really help organizations and teams perform in a way that improves quality and gives customers what they want. Though the core of this book is an economic model, the book is quite readable and enjoyable. While this book was written before many people had heard of agile or Scrum, the model in the book also helps you understand why the approach of self-organizing teams that agile methods advocate can be very effective. Many of the conclusions in this book seem like common sense, but like many things, common sense is not synonymous with common practice, especially among people want to measure things. If you manage people consider reading this book to get a deeper understanding about incentive systems in addition to Behind Closed Doors: Secrets of Great Management (Pragmatic Programmers) which will help you to learn how to effectively manage people day-to-day to improve performance.
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