Human Resources and Mathematical Fictions

It is hard to find more discussed and less solved issues than how to quantify Human Resources. We have looked for tools to evaluate jobs, to evaluate performance and at what percentage objectives were met. Some people tried to quantify in percentage terms how and individual and a job fit and, even, many people tried to obtain the ROI over training. Someone recovered Q index, aimed to quantify speculative investments, to convert it into the main variable for Intellectual Capital measurement, etc..

 Trying to get everything quantified is so absurd as denying a priori any possibility of quantification. However, some points deserve to be clarified:

New economy is the new motto but measurement and control instruments and, above all, business mentality is defined by engineers and economists and, hence, organizations are conceived as machines that have to be designed, adjusted, repaired and measured. However, it is a common fact that rigor demanded about meeting objectives is not used in the definition of the indicators. That brought something that is called here Mathematical Fictions.

A basic design principle should be that any indicator can be more precise than the thing it tries to indicate whatever the number of decimal digits we could use. When someone insists in keeping a wrong indicator, consequences appear and they are never good:

  •  Management behavior is driver by an indicator that can be misguided due to sneaky type of the variable supposedly indicated. It is worth remembering what happened when some Governments decided that the main priority in Social Security was reducing the number of days in waiting lists instead of the fluffy “improving Public Health System”. A common misbehavior should be to give priority to less time consuming interventions to reduce the number of citizens delaying the most importan tones.
  • There is a development of measurement systems whose costs are not paid by the supposed improvement to get from them. In other words, control becomes an objective instead of a vehicle since control advantages do not cover costs of building and maintenance of the control. For instance, some companies trying to control abuse in photocopies ask for a form for every single photocopy making the control much more expensive than the controlled resource.
  • Mathematical fictions appear when some weight variables that, in the best situation, are only useful for a situation and lose its value if the situation changes. Attemps relative to Intellectual Capital are a good example but we commit the same error if we try to obtain percents of people-job adjustment to use them as to foresee success in a recruiting process.
  • Above all, numbers are a language that is valid for some terrains but not for others. Written information is commonly rejected with “smart talk trap” arguments but the real fact is that we can perceive fake arguments easier in written or verbal statements than if they come wrapped in numbers. People use to be far less exigent about indicators design than about written reports.
  • Even though we always try to use numbers as “objective” indicators, the ability to handle these numbers by many people is surprisingly low. We do not need to speak about the journalist that wrote that Galapagos Islands are hundreds of thousands of kilometers far from Ecuador coast or the common mistake between American billion or European billion. We can show two easy examples about how numbers can lose any objectivity due to bad use:

After the accident of Concorde in Paris, 2001, media reported that it was the safest plane in the world. If we consider that, at that time, only fourteen planes of the type were flying instead of the thousands of not-so-exclusive planes, it is not surprising that an accident never happened before and, hence, nobody can say from it to be the safest plane. The sample was very short to say that.

Another example: In a public statement, the Iberia airline said that travelling by plane is 22 times safer than doing it by car. Does it mean that a minute spent in a plane is 22 times safer than a minute spent in a car? Far from it. This statement can be true or false depending of another variable: Exposure time. A Madrid-Barcelona flight lasts seven times less than a trip by car. However, if we try to contrast one hour inside a plane with an hour inside a car, results could be very far from these 22 times.

The only objective of these examples is showing how numbers can mislead too and we are less prepared to detect the trick than when we have to deal with written language.

These are old problems but –we have to insist- that does not mean they are solved and, perhaps, we should to arrive to the Savater idea in the sense that we do not deal with problems but with questions. Hence, we cannot expect a “solution” but contingent answer that never will close forever the question.

If we work with this in mind, measurement should acquire a new meaning. If we have contingent measurements and we are willing to build them seriously and to change them when they become useless, we could solve some –not all of them- problems linked to measurement. However, problems will arise when measurement is used to inform third parties and that could limit the possibility to change.

An example from Human Resources field can clarify this idea:

Some years ago, job evaluation systems had a real crisis. Competencies models came from this crisis but they have problems to for measurement. However, knowing why job evaluation systems started to be displaced is very revealing:

Even though there are not big differences among the most popular job evaluation systems, we will use Know-How, Problem Solving and Accountability, using a single table to compare different jobs in these three factors is brilliant. However, it has some problems hard to avoid:

  • Reducing to a single currency, the point, all the ratings coming from the three factors implies the existence of a “mathematical artifact” to weight the ratings and, hence, priming some factors over others.
  • If, after that, there are gross deviations from market levels, exceptions were required and these go directly against one of the main values that justified the system: Fairness.

Although these problems, job evaluation systems left an interesting legacy not very used: Before converting ratings into points, that is, before starting mathematical fictions, we have to rate every single factor. We have there a high quality information, for instance, to plan professional paths. A 13 points difference does not explain anything but a difference between D and E, if they are clearly defined, are a good index for a Human Resources manager.

If that is so…why is unused this potential of the system? There is an easy answer: Because job evaluation systems have been used as a salary negotiation tool and that brings another problem: Quantifiers have a bad design and, furthermore, they have been used for goals different from the original one.

The use of mix comittees for salary bargaining, among other factors, has nullified the analytical potential of job evaluation systems. Once a job is rated in a way, it is hard to know if this rating is real or it comes from the vagaries of the bargaining process.

While job evaluation remained as an internal tool of Human Resources area, it worked fine. If a system started to work poorly, it could be ignored or changed. However, if this system starts to be a main piece in the bargaining, it losses these features and, hence, its use as a Human Resources tool dissapears.

Something similar happens if we speak about Balanced Scorecard or Intellectual Capital. If we analyze both models, we’ll find that there is only a different variable and a different emphasis: We could say, without bending too much the concepts, that the Kaplan and Norton model is equal to Intellectual Capital plus financial side but there is another difference more relevant:

Balanced Scorecard is conceived as a tool for internal control. That implies that changes are easy while Intellectual Capital was created to give information to third parties. Hence, measurement has to be more permanent, less flexible and…less useful.

Actually, there are many examples to be used where the double use of a tool nullifies at least another one. The same idea of “Double Accounting” implies criticism. However, pretending that a system designed to give information to third parties can be, at the same time and with the same criteria, an effective tool for control, is quite near to ScFi.

Competencies systems have too its own part of mathematical fiction. It is hard to créate a system able to capture all the competencies and to avoid overlapping among them. If this is already hard…how is it possible to weight variables to define job-occupant adjustment? How many times are we evaluating the same thing under different names? When can we weight a competence? Is this value absolute or should it depend on contingencies? Summarizing….is it not a mathematical nonsense aimed to get a look of objectivity and, just-in-case, to justify a mistake?

This is not a declaration against measurement and, even less, against mathematics but against the symplistic use of it. “Do it as simple as possible but no more” is a good idea that is often forgotten.

Many of the figures that we use, not only in Human Resources, are real fiction ornated with a supposed objectivity coming from the use of a numeric language whose drawbacks are quite serious. Numeric language can be useful to write a symphony but nobody would use it to compose poetry (except if someone decides to use the cheap trick of converting letters into numbers) and, however, there is a general opinion about numbers as universal language or, as Intellectual Capital starters said, “numbers are the commonly accepted currency in the business language”.

We need to show not only momentaneous situations but dynamics and how to explain them. That requires written explanations that, certainly, can misguide but, at least, we are better equipped to detect it than if it come wrapped in numbers.

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