Measuring and Managing Performance in Organizations

This is the digital version of the printed book (Copyright © 1996).   Based on an award-winning doctoral thesis at Carnegie Mellon University, Measuring and Managing Performance in Organizations presents a captivating analysis of the perils of performance measurement systems. In the book’s foreword, Peopleware authors Tom DeMarco and Timothy Lister rave, “We believe this is a book that needs to be on the desk of just about anyone who manages anything.”   Because people often react with unanticipated sophistication when they are being measured, measurement-based management systems can become dysfunctional, interfering with achievement of intended results. Fortunately, as the author shows, measurement dysfunction follows a pattern that can be identified and avoided.   The author’s findings are bolstered by interviews with eight recognized experts in the use of measurement to manage computer software development: David N. Card, of Software Productivity Solutions; Tom DeMarco, of the Atlantic Systems Guild; Capers Jones, of Software Productivity Research; John Musa, of AT&T Bell Laboratories; Daniel J. Paulish, of Siemens Corporate Research; Lawrence H. Putnam, of Quantitative Software Management; E. O. Tilford, Sr., of Fissure; plus the anonymous Expert X.   A practical model for analyzing measurement projects solidifies the text–don’t start without it!  

Table of Contents:
Foreword xii Preface xv   Chapter 1: An Introduction to Measurement Issues 1   Chapter 2: A Closer Look at Measurement Dysfunction 10   Chapter 3: The Intended Uses of Measurement in Organizations 21 Motivational Measurement 22 Informational Measurement 25 Segregating Information By Intended Use 29   Chapter 4: How Economists Approach the Measurement Problem 32 Balancing Cost and Benefit Associated with Agent Effort 34 The Effort Mix Problem 37   Chapter 5: Constructing a Model of Measurement and Dysfunction 42 The Importance of the Customer 44 What the Customer Wants 45 Extra Effort versus Incentive Distortion 47   Chapter 6: Bringing Internal Motivation into the Model 52 The Observability of Effort 54 Model Assumptions 55   Chapter 7: Three Ways of Supervising the Agent 58 No Supervision 58 Full Supervision 60 Partial Supervision 62   Chapter 8: Designing Incentive Systems 66 A Better Model of Organizational Incentives 68   Chapter 9: A Summary of the Model 74 The Model Setup 74 Three Ways of Supervising the Agent 76 The Principal's Solution 79   Chapter 10: Measurement and Internal Motivation 81 Internal versus External Motivation 81 Delegatory Management 87 The Conflict Between Measurement-Based and Delegatory Management 89   Chapter 11: Comparing Delegatory and Measurement-Based Management 92   Chapter 12: When Neither Management Method Seems Recommended 102 Measurement versus Delegation in Real Organizations 108   Chapter 13: Purely Informational Measurement 114   Chapter 14: How Dysfunction Arises and Persists 124 The Earnest Explanation of Dysfunction: A Systematic Error by the Principal 126 Misguided Reflexes, Folly, and the Mystique of Quantity 127 The Difficulty of the Principal's Inference Problem 133   Chapter 15: The Cynical Explanation of Dysfunction 137 Delegation Costs, Inevitable Dysfunction, and Non-Attributional Cultures 140   Chapter 16: Interviews with Software Measurement Experts 147 Interview Results 149   Chapter 17: The Measurement Disease 159 The Malcolm Baldrige Quality Award 159 ISO 9000 Certification 160 Software Capability Evaluation 162 Similarities Between Methods 163 The Nature of the Measurement Problem 167   Chapter 18: Societal Implications and Extensions 171 Probabilistic Measurement 172 Firm Integration Theories 174 The Difficulty of Explaining Cooperation Under Assumptions of Pure Self-Interest 178   Chapter 19: A Difficult But Solvable Problem 180   Appendix: Interview Methods and Questions 183   Glossary 191 Bibliography 195 Author Index 209 Subject Index 211