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Informational Measurement

Informational measurement can take two different forms. The first, which might be called process refinement measurement, provides information that reveals the detailed structure of organizational processes. Detailed accounts of the internal workings of processes are useful in designing improved processes, thereby making the organization function more efficiently. Frederick Taylor (1916) pioneered this use of measurement. He proposed using organizational quasi-experiments to determine the laws and parameters governing production processes (“Every little trifle—there is nothing too small—becomes the subject of an experiment. . . .” p. 75). In an often cited example, he showed that more total weight could be loaded if a man did not lift his maximum load each time; lifting the maximum load each time reduced the overall rate at which he could lift, thereby reducing the total amount that could be lifted in a day. After Taylor’s experiment, loaders of coal and iron ore were given strict orders concerning how much to lift in each shovel, and the result was more efficient loading. In a similar vein, Campbell (1979) proposed designing government social programs as quasi-experiments with built-in measurements.3

The second form of informational measurement, coordination measurement, has a purely logistical purpose. Coordination measurement provides information that allows short-term (sometimes real-time) management of organizational flows and schedules. For example, it benefits a print shop to measure its current stores and usage rates of various kinds of paper so that shortages or burdensome inventories can be avoided. Likewise, knowing how far ahead or behind schedule a software project is running can help managers avoid bringing resources to bear too early or too late. In rudimentary form, coordination measurement generates simple warnings or red flags, such as the light that flickers on a car dashboard indicating dangerously low oil levels.4

The informational use of measurement in its conceptually pure form is not intended to have motivating effects on workers. Its purpose, rather, is to learn about whatever is being studied or managed. A physicist reading from a voltmeter during a lab experiment is using measurement purely informationally. In such contexts of conceptual purity, measurement has been described as “the assignment of numerals to objects according to rules” (Stevens, 1946, p. 677), “assigning numbers to represent qualities” (Campbell, 1957, p. 267), and, more elaborately, “the establishment of empirical rules of correspondence between a set of empirical objects (A) and a set of numerals (N)” (Grove et al., 1977, p. 220). An often repeated assertion by Lord Kelvin espouses the virtues of purely informational measurement:

  • When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the stage of science (as quoted in Humphrey, 1989, pp. 3-4).

Proponents of organizational measurement take the claims expressed by Lord Kelvin deeply to heart. Some aspire to a science of organizational measurement; others place great practical store in the power of quantification to reveal aspects of the organizational world. Many posit analogies between measurement in physical and organizational systems. One frequent analogy casts the manager in the role of an airplane pilot guided by organizational measures that are like cockpit instruments. Kaplan and Norton (1992) use this analogy in their paper advocating multiple criteria measurement systems:

  • Think of [the organizational measurement system] as the dials and indicators in an airplane cockpit. For the complex task of navigating and flying an airplane, pilots need detailed information about many aspects of the flight. They need information about fuel, air speed, altitude, bearing, destination, and other indicators that summarize the current and predicted environment (p. 72).

Several experts interviewed for this book repeated versions of this analogy. Capers Jones also made comparisons to medical diagnosis, stating that just as doctors seeking to explain a patient’s ills measure blood pressure and pulse, so should managers seek out organizational ailments by checking flows, rates, and trends. Jones carried the comparison to the point of characterizing some measurement advice as “measurement malpractice.”

Outside of the theoretical realm, however, it is nearly impossible to achieve the purity of informational measurement inherent in these analogies. Unlike mechanisms and organisms, organizations have subcomponents that realize they are being measured. Russell Ackoff (1971) draws a careful distinction between organisms and organizations (concisely paraphrased here by Mason and Swanson):

  • . . . both are purposeful systems in the sense that each can change its goals. The difference is that organisms are comprised of organs that only serve the purpose of the system, whereas organizations are comprised of purposeful subsystems with their own goals (see Mason and Swanson, p. 135).

Organizational subsystems are composed of people, most of whom maintain among their goals the desire to look good in the eyes of those responsible for evaluating and allocating rewards to the subordinate subsystems. The desire to be viewed favorably provides an incentive for people being measured to tailor, supplement, repackage, and censor information that flows upward. Eric Flamholtz (1979) reacts to the extension of purist definitions of measurement into organizational contexts by protesting that

  • In the context of organizations, the role of measurement is not merely a technical role of representation; it has social and psychological dimensions as well. The function of accounting measurement systems, for example, is not merely to represent the properties of “wealth” (measured in terms of “assets”) and “income”; but rather to fulfill a complex set of functions. . . . Accounting measurements are simultaneously intended to facilitate the functions of accountability (stewardship), performance evaluation, and motivation, as well as provide information for decision making (Flamholtz, 1979. See also Mason and Swanson, p. 255).

Mechanistic and organic analogies are flawed because they are too simplistic. Kaplan and Norton’s cockpit analogy would be more accurate if it included a multitude of tiny gremlins controlling wing flaps, fuel flow, and so on of a plane being buffeted by winds and generally struggling against nature, but with the gremlins always controlling information flow back to the cockpit instruments, for fear that the pilot might find gremlin replacements. It would not be surprising if airplanes guided this way occasionally flew into mountainsides when they seemed to be progressing smoothly toward their destinations.

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