S3, Ep.12 - Overcoming Why Performance Metrics Don’t Work: The Application of Gamification in KPIs to Change Performance

Introduction

0:00Welcome to Organizational Sherlocks, the podcast where business meets psychology and your organizational puzzles meet their match. Join us for captivating stories and practical solutions to unravel your toughest challenges. I'm Dr. Elizabeth Fleming. And I'm Morgan Ashworth, your guides to a prescription for business success. Let's dive in.

0:32So listeners, again, excited for this episode. I think I say that every time, but it's because we really do try to curate our episode topics for you guys, making sure that they're actionable, things that you're going to use and also learn from.

KPI Systems

0:47So today, I kind of want to talk about why so many KPI systems feel like report cards rather than motivational tools. So maybe it's not the metric that we're measuring, but the psychology of how we present it. Yeah, absolutely. I know KPIs are a conversation that comes up a lot with my clients, especially when they're, you know, maybe a leadership team is tasked with coming up with KPIs or reporting back on their progress towards KPIs. And so I think this is a great conversation and

1:21one that maybe we can provide a different view on, maybe an alternative solution that helps it kind of be a little bit more successful. Yeah. Yeah. So just to lay the foundation for you guys, ultimately, this episode is going to explore how teams engage with KPIs in a way that feels motivating rather than punishing. And instead of defaulting to, you know, pressure, shame, or heavy consequences when goals are missed, we're going, our conversation is going to examine how gamification, a psychological term that maybe some of you have heard before can instead make

1:53performance tracking more energizing, meaningful, and sustainable. So our focus is going to be on applying psychological theories as normal, though we're always going to put them in layman's terms for you. And this will help leaders design KPI systems that encourage progress, ownership,

Gamification

2:09and overall healthy accountability. Wow. Yeah. And you know, when I think about gamification overall, it's something I've definitely incorporated into my work internally, but also with clients. And sometimes I will be honest, I'm curious your perspective. Sometimes I get people who say, well, it's kind of childish. Like, why are we making this into a game? Right. But I don't see it that way. Right. Because we think about just general motivation and performance anxiety and

2:44fear-based management and all of those different things, which I know we're going to explore in this episode, um, together, but gamification kind of changes the, God, I'm going to use the word game changes the game. Um, because you're not focusing as much on all of those kind of that, those anxieties or those fears you're, you're focusing on, on what makes progress visible or, um, you know, what is rewarding, um, and, and really kind of looking at in that, in that way. I'm curious if

3:14you see it similarly or. Yeah, no, I mean, I think there's different levels to gamification too. I feel like you could get to the level of gamification, which is just, you know, metrics that are visual and able to be seen. And, and there's, you know, clear reachable goals within KPIs, you know, there's clear numerical understanding. Um, but then it could all go all the way towards gamification in the sense of, you know, making cute little signs and having like bells and things along those lines in the workplace. Um, that's more like visual auditory, um, like physically connected to, uh, but all in

3:50all, if you think about it, um, for our listeners, you know, what keeps you playing a video game? What keeps you watching that football game, right? It's actually gamification. Um, so video games are gamified to make you want to get to the next level, to keep you on that game and always going for the next challenge, right? That's the same idea within the workplace, but it's real life circumstances, real life KPIs. Um, same idea for a football game. What keeps you engaged into watching that football game? It's all the steps that they have to take to get a point, to get,

4:25you know, that, that kick, to get that touchdown or football in the sense of soccer, to get that goal. Um, so what keeps you engaged? It's the gamification itself and there's different levels to it. And sometimes certain levels are seen as more quote childish. Yes. Um, but I think we can think we can look at gamification as simply getting the numbers down on paper as something to strive towards as, as a goal-based gamification. It doesn't always have to be playful.

4:57Absolutely. Well, and I mean, I think I really like that you're talking about kind of the, um, sensory elements, the visual, or even, you know, the auditory kind of all the different sensory components. I think that's a really important thing. Um, and, but it also makes me just think generally about goals, right? And I mean, ultimately KPIs are goals, right? They're goals

Goal Setting Theory

5:21that we're striving to achieve. And, and that brings into mind for me, goal setting theory, um, which is really about making those KPIs, um, very specific and achievable. Um, many of our listeners may have heard of SMART goals, the acronym SMART goals. Um, this can be really, really helpful. You know, they're specific, they're measurable, they're achievable, they're realistic, and they're time limited. Um, KPIs can be created in that same exact way, right? Um, and goal setting theory helps us understand that specificity and the ability

5:53to achieve them. Um, if we are looking at kind of incorporating some kind of psychological theory, right now, that doesn't necessarily mean gamification, right? Um, that we can make goals without using gamification. However, when we then kind of add in that layer of motivation, motivation, um, and, and what motivates people, um, and, and keeps them engaged, I really think that's where those sensory components come in. It's where kind of the, the cognitive, um, kind of interest, how do we keep people interested and engaged? Um, it just adds an extra layer to goal

6:28setting theory that wasn't originally part of that theory. Yeah. Yeah. I mean, if you think about it, we have the extrinsic motivation versus intrinsic motivation. So extrinsic is meaning you're getting some sort of external rewards, um, related to, you know, operant conditioning is followed by some sort of positive reinforcement. Um, meanwhile, intrinsic motivation, meaning means that there's some sort of internal level of enjoyment towards this. And so if you can make the, you know, achieving of KPIs more fun, more joyful, I guess I would say like something that you can enjoy, um, something

7:02that you can experience, you know, the sensory things that we were talking about, then you're going to get higher levels of intrinsic motivation towards your, um, towards those KPIs and that goal and those goals, which is what turns it into that gamification, that gamified process. Yeah. When I just want to make one, one point or add one point to the kind of motivation side of things, because when you're talking about intrinsic motivation, right. And I guess maybe just for our listeners, you know, extrinsic motivation might be praise from your, your supervisor or your leader

7:34or money or a gift card or whatever it might be. Right. Um, that's more of those extrinsic, extrinsic pieces. Um, but that intrinsic motivation is, is really comes from within and, and what that looks like may be different for each person, say on a team. So I think that's important for leaders to recognize is getting to know who's on your team and who's working toward achieving these KPIs. will help you to kind of tailor the experience in a way that, um, kind of, um, increases the chances

8:07of success, if you will. And I'll just offer just like a quick example. Like I'm someone who loves, um, tasks. Like I like to have a list. I like check boxes where I can check off my list. Right. That is motivating to me. Like that in itself is gamification, right? When I can check one thing off and get all the way through my list, I feel intrinsically motivated to do more, right? That might not be the same for other people, right? There are people who hate having lists, um, and much

8:40prefer that, um, kind of the external validation piece of things. And so again, I think it's important when we think about motivation to understand who's on your team. Um, you know, what are they motivated by and then tailor the experience? Yeah. Yeah. So I think that kind of plays into the whole, it depends within industrial organizational psychology. And in fact, I was even having a conversation, um, regarding our current, the, the work environment I'm internally at. And, you know, we were talking about how even, you know, the, the problem solving or the decision-making

9:12regarding a certain situation, it always depends on the person, on the customer, on the situation. Same idea for, um, when it comes to motivating employees, it's, you, you have to have a understanding of what motivates your employees in order to best motivate them to get those goals. Um, yes, there is a sense, uh, there is a, a necessary sense of self-accomplishment as well. Um, so that there needs to be a level of self-accountability within those employees. But I would argue that as a leader, if you can recognize what motivates your individuals, whether that be intrinsic or extrinsic

9:46motivators, then you're more likely to help or get your person, that employee, that staff member to achieve the goal you want them to, even if they might not have that self-accountability in a way. Self-accountability, yes, important, but I think having an understanding of those motivational factors helps you be that much more successful as a leader and helps your team be that much more successful since you're achieving organizational goals, not just individual goals.

10:16Yeah. Yeah. Yeah. No, I agree with you. And I do, I do think too, um, you know, as a leader, I guess it's not really gamification necessarily, but there's a lot of power to, and, and have been kind of giving folks the latitude to make some decisions about how goals are achieved. You know, I may say, Morgan, our goal is to do X, right. And we need to get there. How you get there is totally up to you and to your team. And I think there's a lot of that can be really important. And that in

10:48itself can be kind of a game as well, right? Like if you're a Tetris player, for instance, right, you might like figuring out how to get there, um, and how to put the pieces together in a way that's going to help you achieve them. So, yes, exactly. I mean, I feel like you gave one of the most basic examples of gamification checklists. It's that ability things off, um, whether it be checklists on, on like a virtual to-do list or checklists on a physical notepad. Uh, I'm sure our listeners who watch see that I'm constantly taking notes. I truly am constantly taking notes because I'm always

11:23thinking of things and I'm not always adding to my to-do list or, or, or something along those lines. And that checklist is a great way to hold yourself accountable because you've gamified it for yourself. Um, but then you can take gamification to the next level, you know, of spreadsheets and with, um, different sorts of tracking figures. And I mean, that's going to sound funny, but there was a conversation back in the day with a sales manager I was coaching who, um, previously she had set up a, um, like the Superbowl was coming up. And so for quarter one goals, she set up a little

11:53football theme. So again, this is why I think football earlier on in the episode. And she almost had the people as like players and they went up on this magnetic whiteboard as they got closer to their goal for sales, which ultimately helped them get their quote touchdown. Um, so there was that gamification and there was a real, there was a level of realism within football and it was relating to something outside of the workplace. Now that's kind of the more playful, I guess, quote unquote childish, not necessarily childish, childish. It's a good use of fun in the workplace

12:28because fun in the workplace is difficult. We can have fun in the workplace. I think that it doesn't have to, I mean, we have to do our work of course, but I think we can have fun. I like having fun. I mean, for us in the U S you know, most people are at their office eight hours a day, 40 hours a week. And so we're spending a significant amount of our life at work. Why are we not going to make it fun? It should be something we enjoy. And then that also, again, would play into a piece of the intrinsic motivation. If they're enjoying it, whether that be what they do, their

12:59team, the systems they're working with something along those lines, they're just going to be more naturally motivated. Um, though I'm sure there's extrinsic factors related to.

Motivation and Leadership

13:10Yeah. Oh, for sure. But I mean, there's a lot of research that suggests that people who enjoy their time at work, um, or feel connected to folks do stay longer. So there's some benefits there as well, but I know we're talking about some of kind of the, the, you know, more, I guess what we would maybe consider to be games. Right. Um, but it also makes me think about just some of the, the platforms that folks use or, or some of the software tools that are kind of being implemented

13:42in organizations. So take, for example, like a dashboard, a KPI dashboard, right. Um, that has a workflow built into it. So the one that I'm most familiar with is Power BI, um, which is a built on Power Platform, a whole thing, whatever, we're not going to get into the technology of it. Um, but I can tell you that, you know, in having built them before, it's really cool because the workflows, you can see at what step, like, where are we in the process, right? Whether that's goal related

14:12or a client service that you are, um, engaging with whatever it might be. And so you can see kind of using almost like progress bars, or, um, maybe there's a celebration of some kind, like a milestone celebration, something like that, that kind of helps you to see where you're at. And, um, you know, that can be something that is utilized in the workplace and, and that in itself, even though it's a productivity tool and efficiency tool, um, all of those things,

14:42it is still in some ways kind of gamification, right? Like how close am I to meeting my goal, right? How long is it going to get there? And it might be the more basic black and white type of gamification, which is not the quote childish, playful, fun ones, but it's still fun in the sense of it makes it visual. It makes it, you know, sensory in some way, shape or form. Um, and there's multiple components to it. So it's not just progress bars. It's also those celebrations. It might be other types of goals or consistency markers, or even visible streaks as well. Uh, you know,

15:17that could be all incorporated into a singular dashboard for these individuals. Uh, in fact, it makes me think of a previous dashboard I looked at, which, um, basically there was a dashboard for like a summary of the entire team with each person on it. And then there was a kind of like a prepare dashboard, like one that shows them where they're going to be at a couple months from now. Then there's individual dashboards and support dashboards all within this one piece, because you can see not only where you're at, but where your team's at. And I think for those environments

15:52where collaboration is critical, team-based goals, team-based progress bars and visible streaks is super important to recognize. Um, you know, again, I'm going to relate it back to sales because sales and KPIs are tend to go hand in hand. A lot of times sales teams have quotas they have to meet or goals they have to meet. You know, they might have to get beat last year by 5% and that's considered quota or 40% even that's what the sales teams are like, right? Depends on the industry you're in.

16:22But anyhow, if I think of a sales team, you know, they could be, you know, maybe the team as a whole is in the green for their goal, but there's a couple of people in the red from their goal, but they hit their quota markers. So as a team, they've, they've managed to hit the company expectations, but maybe individually, a couple of people had bad months, something along those lines is what I think of. So for those environments where collaboration is key, team-based goals, um, and visibility is very helpful on those dashboards. Yeah. Yeah. Well, and I think too,

16:53just the interactive kind of component of the, of many of the dashboards available today, again, like Power BI, um, that makes it kind of fun. So to your point, you know, I, I think outside of sales, just even in like consulting, for instance, for, you know, those that are, are working in consulting, um, or want to, and are interested in doing, you know, like a more of a productivity model, a lot of times the dashboards that are built in my experience can, can be built in a way that you can see the team. Right. But then I can really like dial in and look at how is Elizabeth doing

17:28or how is Morgan doing? Um, and I, and I think as it's, it's gamified in that I can say, Ooh, Morgan is beating me by one client or two clients or whatever it is. I want to achieve more. Right. I'm not super competitive, but maybe other people are. Well, okay. That's not true. I am when it comes to ice hockey, but other than that, not really. Yeah. You're competitive. Okay. Okay. Okay. Okay. Fine. I'll take that. Um, but you know, thinking about kind of those, those pieces, right. Of, um, you know, being able to look at the whole picture, but dial into areas where you're really interested.

18:02Take that same example. I just gave between, you know, you and I, and say, we have our leader, right. Maybe there's a leader leading us and they want to understand who can they spend extra time with to help them succeed. They can also utilize those dashboards to be able to see where is Elizabeth at, where is Morgan at and how can I help you? Right. And so again, building that connection between leader and employee, but also allowing that employee to have some accountability about where they're at as well. So that speaks, I think, to your point of the self accountability,

18:35but also the oversight of a leader. Yeah. And I was actually going to say, yes, dashboards and gamification are great for, you know, motivating your, your team to get to that next level as a leader. But for you as a leader, it helps you look at where performance is at before it drops is what I'm going to say. It helps you see where performance issues might be happening before it's too late. So that way you can intercede sooner and help your teammate, your team sooner. Not usually teammates,

19:08those, those that are reporting to you, team members, but it's so critical. And KPIs are measurements of performance, right? There's yes, there's qualitative measures, you know, those more quality type measures that are, you know, like verbal constructs versus the number based constructs. But all in all, I think it's great to see where other people are at from either a team, the team member level or a leader level. And I think you honed into something really important,

19:40Elizabeth, you get that gamification when you have a healthy level of competition, whether that be against yourself, or against other team members. So I guess that drives into another point behind gamification is, you know, recognizing for improvement and not just top performance. And so that can be for those people competing only against themselves. Mm hmm. Yeah, no, I completely, I completely agree with that. Gosh, now I'm stuck in my head about whether I'm competitive or not. But I think that there's a, I think there's a high likelihood

20:12I might beat Morgan. I don't know. But yeah, no, I, it, it's not just about, to your point, that top performance. Yeah, that's important. And it's important to recognize folks. But, you know, how are people like, what steps are they taking to get to achieving their KPIs, right? Are those KPIs realistic? Are they, you know, too high of, you know, too high of a goal right now? Are they too low? Right? I think all of those things are really important to keep in mind. And, and honestly,

20:46it's making me think a little bit about just how KPIs are developed. And I know that's not exactly what we're talking about right now. But it just to go back to the kind of dashboards. It's a part of it for sure. Yeah, like it just going back to kind of the dashboard part of it. And I, this is something I'm doing in my MBA right now. So for our listeners, I'm doing an MBA, because why not? And I would like to. And I mean, I'm a lifelong learner. So of course, I want to keep doing it. But it's making me think

21:17about just even some of the, like, yes, kind of seeing real time where we're at is helpful in those dashboards. And there's an ability to add more predictive analytics in there as well. You know, you think about, like, how do you define those KPIs? Well, what is your three month moving average? You know, can you run a regression or something to try to understand where are you going? Right? What does the trajectory look like and try to predict that out? So that you don't have KPIs that are so vastly out

21:50of reality, you know, so you really are keeping them within. And then guess what, if you beat that? Awesome. Like, that's an awesome place for recognition. But let's be realistic on the front end. You know? Yeah, I think realism to create those gamified programs is so, so important. Sometimes I see individuals, you know, set multiple tiers to goals, even, you know, once you reach this goal, then like your next goal is to try to get to this tier. And then once you reach that goal, try to get to this next tier. So yes, realism is so important, because just like realism is important

22:24within gamification, realism is important within actually measuring performance. Because if you don't have reality within your metrics, you're not going to have reality within actual performance management and performance reviews and your ability to rate your employees and to, you know, promote them or get them raises or, you know, note that they might not be due a raise for another reason, right? So realism is critical to what you're doing. Yes, weekly challenges, progress born bars, milestone celebrations, etc, etc. Those are all great things to put into your gamified programs.

23:00But if they're not realistic, progress bars, they're not realistic milestone celebrations, then they're actually going to defeat the purpose of your gamified program. And I know you're people won't take them seriously. And you will have put all this work into something that isn't being paid attention to. That makes sense. And I know, like Elizabeth, you're mentioning Power BI being one of those common programs. But let me tell you, if you're just starting out, go on Excel, go on Google Sheets, you can develop a program just within that system. You know, these spreadsheet

23:36systems have programs within them to, you know, help you make it more visual and make it more pretty. And then on top of that, you know, make graphs and all that type of stuff to review after the fact, again, making it kind of pretty visual in a way. Absolutely. Yeah. For those who don't know and want to get into it, the way you do that in Excel is using a pivot chart. So you can do that. So it updates real time as your data updates. We could provide a link to a cool YouTube video with this

24:09that kind of shows a little bit about how to do that, because dashboards don't have to be, you know, built on those on those big platforms. You can use Excel. You know, obviously, there's there's pros and cons to that, because there's maybe a little bit less customization in, say, Google Sheets or Microsoft Excel. But there are work to it. There's still ways to make it work. Absolutely. But I think the biggest thing, if I'm being honest with you, kind of in this conversation that's sticking with me is all of this is so important, but none of it will be successful if we

24:44don't do change management right and get people on board and get that buy-in and help them understand why it's helpful. And so I know that's not necessarily the topic of our conversation today, maybe a secondary conversation we could have. But we if gamification is something you're interested

Implementing Gamification

25:02in deploying and using within your organization, you know, think about how and what will you need to do to get people on board with it. And one thing I always tend to say is, when I'm developing a KPI system, I tend to want to first measure motivation, you know, see what they're what they're motivated by. And then take that also talk with them, you know, talk with them and be like, hey, so this is what I'm thinking for measurement. These are your current KPIs. You know, this is how we're

25:34currently measuring them. What are your thoughts on measuring them in this way? Or, you know, kind of getting building that buy-in before you start creating that program. That's part of the change management. And seriously, ask yourself, though, do you have fear based KPI management at the moment? Because if you do, you're going to have a significantly different change management process than someone that simply doesn't have the best, you know, current KPI tracking. Yeah, when I think too, that's a great place. This is a wonderful example of where IO psychology

26:06comes into play, right? This doesn't mean you have to go out and, you know, if this sounds interesting to you and something you want to create and use in your organization, it doesn't mean you have to go out and hire someone, you know, somebody new or whatever it is, like maybe you need a little bit of support from a consultant or something like that. But I would encourage you to just think about what is, like, what will you need, right? How will you measure that? And do you have internal capabilities to measure, say, motivation, for instance? If not, there are plenty of folks

26:39out here, us included, that do that work and love that work. So just, I think, taking kind of an idea of what that, what it is that you're looking to do and then deciding what is the best path to get there. Yeah. And I like that you say, like, you know, we do both partake in that, both Elizabeth and myself, kind of for similar and different reasons at the same time. You know, we're in the same space, but we have different focuses. One of mine is actually gap analyses. And so I'll recognize gaps in organizations. And one way I do that is by the measurement of KPIs and seeing where

27:12performance currently sits versus where it could improve and then, you know, finding gaps from there. So there's a lot of connectivity to KPIs in the workplace. You know, some people measure KPIs very professionally, you know, in a way of like, these are exactly the quotas and the KPIs we have to hit versus other individuals kind of know their KPIs, but they're, they're kind of generalized. We do recommend, recommend trying to quantify those KPIs in some way, shape or form. It is going to make

27:43your life as a leader so much easier when it comes to evaluating your team and recognizing the needs of this team. And then also to connect goals to the organization too. Performance connects to everything across an organization. It truly does. We're, we're talking about a small area of it, which is measuring performance in a way that people want to achieve goals and want to achieve these metrics, specifically honing in on KPIs. But we're talking about it because it's so important and it's

28:17connected everywhere else. It's a web of KPI in the organization. Oh, absolutely. I think so much of what we do is interconnected. We just don't always realize it, but I do agree that the, you know, quantifying that information is, is really helpful. And sometimes it can be hard to figure out how do you quantify, you know, people factors and there are ways of doing that. And so if you're, you know, interested, reach out. We'll be happy to talk about that with you because there are absolutely ways to quantify things that may seem like they're more

28:50intangible. So just kind of keeping that in mind. I mean, ultimately, I think what we're talking about though, is that KPI systems, this interconnected nature of, of performance management, all the things that we do, it shapes kind of the culture. Right. And so gamification can be a great way to kind of infuse a level of kind of energy into a place where maybe energy isn't typically found, right. Or some level of creativity as well. And so thinking about motivation and understanding what

29:27motivates people, you know, gamification can be a great way to motivate people and again, bring in some of that energy. So yeah, why not? Yeah. All in all, a good KPI system does not just measure performance. It teaches people how to, and motivate people to make progress. Absolutely. Yep. I completely agree. Um, well, this was a great conversation today. I appreciate it. Um, I will say to our listeners though, you know, if there are things, again, we say this every week, but if there are things you want

29:59to talk about or want us to talk about, or you want to talk about with us, please let us know, reach out on LinkedIn, um, or via email, whatever works best for you. We'd be happy to, to chat with you. Um, we're really excited about some of the guests that we have coming on in the, in the coming months. So please keep in touch with us and, and keep listening, um, so that you can hear about other IO topics that I think are top of mind for a lot of people in the working world. Yeah. And we're super easy to find, you know, organizational Sherlock's. It's our name. So organizational Sherlock's on

30:32LinkedIn and just organizational Sherlock's at gmail.com. If you want to shoot us an email again, happy to talk with you on screen or off screen regarding your KPI situations or anything else IO related. Absolutely. All right, Morgan and listeners, this concludes another intriguing episode of organizational Sherlock's. I'm Elizabeth Fleming. And I'm Morgan Ashworth reminding you that the journey to success is an ongoing investigation. Stay curious, stay strategic and keep utilizing insights to decode your business mysteries. Join us every Friday for your next

31:06whodunit. This is organizational Sherlock's closing today's case. We will see you next time.

31:25We'll see you next time.