Performance Measurement Microeconomics Approach
Performance Measurement Microeconomics Approach
Performance Measurement Microeconomics Approach
approach
Hong Kong - June 20th 2017
Ajit Alwe
What you will see.
The way you frame the problem, determines whether you solve it or not
o If the goal is to build a team to win a football league, then you may seek to achieve that goal by measuring
the number of goals player is scoring while scouting for talent.
o if the goal is long-term profitability, you may seek to achieve that goal by measuring and tracking
productivity.
Dysfunction occurs when the value of proxy parameter goes up, but the values of your goal
get worse.
Two categories of Measurement
1. Value chain indicators provides insights on the value chain of the organization and allows
better short-term management and long-term improvement of organizational processes to
achieve organization goal
2. Incentives Indicators information available to the employee which helps them to avoid/adapt
a behavior in pursuit of personal and organizational goals.
Incentivizing information they way economist see it
Coordination is Mutualistic: Each cooperator confers a benefit on the other while simultaneously
conferring a benefit on himself or herself.
Knowledge needed for co-operation
Palo IT Palowans
Commits to define jobs based on Palo IT vision Commits to acquiring new problem
solving skills which can be added to BIO
Positively
impact the
world by
empowerin
g Growth mindset
organizatio
ns and Employee Evaluate & monitors Company evaluates/monitors/tracks if
belief that talents
can be developed
leaders to Motivating potential of the job on 3 consultant is adding new skills (from the mkt (through hard
harness the work, good
power of dimension: demand trend) to his/her bio as regular strategies, and
transformat 1 Meaningfulness of work input from others)
ive
2 Responsibility for the outcome interval
technology
for the 3 Knowledge of the result
greater
good.
Value Chain
Palo IT
Market
Palo IT
Consultants
Use this information to
decide what skills to
acquire
Regularly updates skill
demand trends from
market
1. Clear Goals
2. Immediate Feedback
3. Challenge-Skill ratio
Novice Refer to previous To be done by the Ux Community in To be done by the To be done by the
slide HK as initial draft Dev Community in HK Product owner
Example: Can list Community in HK
SOLID principles
Adv. Refer to previous
Beginner slide
Competent Refer to previous Ex. Demonstrate a
slide project where SRP is
applied
Proficient Refer to previous
slide
Expert Refer to previous
slide
Dreyfus model of skill Acquisition
2 I have a chance to do a number of different tasks, using a wide variety of different skills and talents.
3 I do a complete task from start to finish. The results of my efforts are clearly visible and identifiable.
4 I understand how the value-chain of Palo HK works & able to figure out where in the value chain i can contribute.
7. The work itself (without the need for human feedback ) provides me with information about how well I am doing.
8. I make insignificant contributions to the final product or service of palo it, client
11. I have very little freedom in deciding how the work is to be done. ______
12. Just doing the work provides me with opportunities to figure out how well I am doing. ______
13. The job is quite simple and repetitive. ______
14. My supervisors or coworkers rarely give me feedback on how well I am doing the job. ______
17. Hive master let us know how well they think we are doing. ______
18. My job is arranged so that I do not have a chance to do an entire piece of work from beginning to end. ______
19. My job does not allow me an opportunity to use discretion or participate in decision making. ______
20. The demands of my job are highly routine and predictable. ______
21. My job provides few clues about whether Im performing adequately. ______
24. My job provides me with the chance to finish completely any work I start. ______
1. Baseline the value-chain for each of the Value Proposition Palo IT is selling now.
2. Value chain information needs to be kept updated based on the market information
3. 5 levels of career path needs to be integrated with the Value Proposition, so that employee
can know what effort and in what direction needs to be applied to be valuable to the company
Because the category of measurement is not inherent in the information provided by the
measurement, information is difficult to segregate by intended use.
Unless trust between workers and managers is greater than usual in organizations, claims that
measurement will only be used in a particular way are not credible.
Social Trust the belief that others will not, at worst, knowingly or willingly do you harm, and
will, at best, act in your interests.
1 = Very nondescriptive
2 = Mostly nondescriptive
3 = Somewhat descriptive
4 = Mostly descriptive
5 = Very descriptive
Value Chain Market
Palo IT consultant
Technical evaluation
HR
Dreyfus model of skill Acquisition
consultant
First treating causation as a summary of behavior under interventions; and
Second using equations and graphs as a mathematical language within which causal thoughts
can be represented and manipulated.
And to put the two together, we need a third concept: treating interventions as a surgery over
equations.
Causality - fundamental to all natural science
Causality (Working definition): A variable X is a cause of a variable Y if Y in any way relies on X for its
value.
think of causation as a form of listening; X is a cause of Y if Y listens to X and decides its value in
response to what it hears.
Our robot, economist, and epidemiologist all need to track down causeeffect relations from the
environment, using limited actions and noisy observations.
It may seem intuitive or simple, but a commonly agreed-upon, completely encompassing definition of causation has eluded statisticians and philosophers for centuries.
Key Premise - Human System are Probabilistic System, Not
Deterministic
Dysfunction
Goal of organization is = X
When a human system is trying to achieve a goal (X), there will be many aspects ( Y1, Y2, Y3Yn) of
progress that needs to be monitored regularly to make sure we increase the likelihood of achieving the
goal (X).
In practical terms, in human system, we cannot figure out all the aspects . So we end up shortlisting few
aspects (Y1, Y4, Y6) that seems to represent the goal closely and is simple enough to measure.
Dysfunction occurs when the value of Y1, Y4, Y6 go up but the values of X get worse.
common knowledge the shared understanding in which two or more people know
something, know that the other one knows, know the other one knows that they know, and so on
to coordinate their actions, and how peoples efforts to cooperate may fail without this infinite
level of shared beliefs.