- Because employees respond very strongly
to performance evaluation measures,
those measures are a powerful tool
in motivating desire behavior.
Let's do an illustration of an optometrist office.
In this hypothetical example,
let's say that the optometrist
has been in business for 20 years.
The optometrist is starting to get hit
with new competition from low-cost outlets,
such as online sellers.
Customers are complaining.
Why do I have to pay you several hundred dollars
for these glasses when I can buy them for $10 online?
There are very few new customers.
Staff feel threatened, because they think
they're going to lose their jobs.
Profits are down.
Everything's bad.
That's the situation that the optometrist finds herself in.
So what does she do?
Well, this wise optometrist gets a consultant,
and they sit together and they make a mission statement.
And here's the mission statement they create:
Provide lifetime, high-quality eyecare
to individuals and families, with an emphasis
on courteous, flexible service, and respectful disclosure
and consultation in terms of options and costs.
The optometrist has decided not to focus on low prices,
but instead to focus on service
and being respectful to customers.
Because that's the direction
that the optometrist wants to go,
it's important to measure employee performance
to support this mission statement.
Mission statements show where the accounting measure
should be pointing.
Consider the impact of the following measure,
percentage of customers who must wait
more than 15 minutes past the appointment time
before they get in to see the doctor.
Now, let's say that the office receptionist
is made responsible for this number.
So how might his behavior change,
this office receptionist, if he's told,
listen, we're going to compute the percantage
who have to wait more than 15 minutes
past their appointment time.
Every week, Friday morning, when we have our staff meeting,
you, the office receptionist, are going to be responsible
for that number, and if the number's high,
you're going to have to tell us why it's high
and explain to us what you're going to do to get it down.
All that has changed is that now
we are measuring the percentage
and causing one person to be responsible for it.
So how will this office receptionist
start doing his job differently?
Now the receptionist might go back into the back room
and remind the doctors to stay on schedule
to avoid causing people to wait too long.
The receptionist will become the patient's advocate
to keep the doctors on schedule.
So, all day long, the receptionist will be thinking
of ideas of how to keep the patient waiting times low.
No one will have to remind the receptionist to do this.
The accounting measure focuses his attention.
The patients will be impressed with how much
the receptionist seems to care about them.
Does the receptionist really care about the patients?
Not really.
The receptionist cares about
the performance evaluation measure, the number.
This shows the power of accounting.
Just measuring something and holding somebody responsible
for that number changes their behavior.
If you want people to do something,
you have to measure it,
but you have to be very careful about what you measure,
because employees are going to focus on that number.