09/09/16
Wells Fargo paid $185M in fines and 5,300 people paid with their jobs to bring you this perfect example of metrics dysfunction.
The question that does not seem to have been answered is whether or not the people who set up the system -- the people who put 5,300 line workers in the impossible situation of choosing between losing their jobs when they got caught eventually or losing their jobs right away for not meeting targets -- have themselves been fired. Or do the higher level metrics show that the system was actually profitable, even net of the fines and costs of employee turnover?
"When you pay people to do something measurable (like open accounts) they do more of it — and not necessarily in a way that actually increases the underlying figure (profit) that you wanted to raise."
http://www.businessinsider.com/wells-fargos-scandal-is-a-cautionary-tale-about-incentive-pay-2016-9
08/31/16
Careful, thoughtful, painstaking use of metrics; clear aspirational goals; intrinsically motivated people with no desire to game the system: all together, a big improvement.
"For five years Charlie took it upon himself to create a new workflow system for the tracing center, breaking down each step in the tracing process into equations, doing time-motion studies for actions as minute as how long on average it takes the ladies to go from their desks to the roll room. Every step was analyzed and rethought, the numbers crunched.
And now? Despite no increase in budget, no new technology, no new staff: `I'm doing twice as many guns, twice as fast, and almost twice as accurately as we did when I got here in 2005.'"
http://www.gq.com/story/inside-federal-bureau-of-way-too-many-guns
08/08/16
A large and possibly calamitous financial hole for the aged and infirm at the intersection of two metrics tied tightly to incentives.
Flexibility and discretion in the application of rules invites abuse and corruption. Inflexible application produces unintended consequences and invites efforts to game the rules.
03/28/16
"The main measure of economic activity, GDP, counts housework when it is paid, but excludes it when it is done free of charge. This is an arbitrary distinction, and leads to perverse outcomes. ... The usual defence is that measuring unpaid work is hard."
The perverse outcomes are in many ways visited upon women, who do most of the world's unpaid work; the hard work would have to be done by men, who make up most of the economics profession.
03/10/16
"`The p-value was never intended to be a substitute for scientific reasoning,' the ASA’s executive director, Ron Wasserstein, said in a press release."
Note that p-values are metrics, measures of a particular probability under certain assumptions. As usual, the Goal - Question/Signal - Metric framework is appropriate: the goal would be to determine, say, if a new drug is efficacious in the treatment of some condition; the question would be whether or not it could reasonably be concluded to be the cause of some observed effect in some experimental trial; and the p-value would be a metric that would help answer that question.
