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October 13, 2011


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John Maloney

Hi - Good post. Some random points.

Just to reinforce your important title. Comparative Performance Metrics are not destructive per se. It is the myth that they are a panacea that is destructive.

Bounded rationality means managers are ALWAYS making decisions with incomplete information and under great time pressure. Trying to fight this principle with metrics is futile.

It is critical to have SOME form of evaluation. Look how teachers unions and their demented notion of tenure has destroyed the US public school monopoly over the last 30 years.

Remember Goodhart's Law. Simple version: "When a measure becomes a goal it ceases to be a measure." Wonky version: "once a social or economic indicator or other surrogate measure is made a target for the purpose of conducting social or economic policy, then it will lose the information content that would qualify it to play such a role."

Pursue a Gaussian distribution for your employees. Award hi performance. Correct poor performance.

When dismissing under performers, simply tell them that you are happy to say that management would like to 'expanding their future employment options.'


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