Monitoring employee performance: the pitfalls for HR

Performance metrics designed to motivate employees and drive efficiency in the workplace can paradoxically leave workers less engaged and more likely to quit, research has found. 

Human Resources analytics expert Professor Martin Edwards from The University of Queensland led a study which analysed data from 283 employees in the UK across 23 industries.  

“Our research found the more intensively an organisation measured employee behaviour, the more likely the work not being tracked was de-prioritised,” Professor Edwards said.

“This correlated with lower employee engagement and a higher intention to quit a month later, particularly where staff don’t see their organisation’s processes as fair.

“Interestingly, intensive performance metrics didn’t translate into an increased focus on the work that was being measured.”

Professor Edwards said when tasks were measured, they became a metric and ultimately a target, which could change behaviour.

“Employees pull away from the work that isn't captured, because the measured tasks are what they'll be judged on,” he said.  

“This isn't laziness, it's a rational response to the signals the system is sending about what actually counts. 

“But non-measurable tasks will still be incredibly important.

“They include things like mentoring, helping a struggling colleague or flagging a risk. 

Organisations should be asking which parts of the job their dashboard can't see, because those are the parts most in jeopardy.”

Study participants worked in jobs including teaching, finance, engineering, healthcare, IT, consultancy and food service.

Their performance was tracked through things like computer activity, website clicks, email opens, customer reviews, sales records, response times, ticket resolutions and referral number. 

The researchers said technology had made performance monitoring easier for a broad range of organisations to adopt.    

“Metrics have been used for a long time in call centres, sales and IT,” Professor Edwards said.

“But it’s now easy to collect and analyse employee activity across a wide range of industries. 

“AI can make digital dashboards for HR to use as performance indicators.”

Co-author Professor Tyler Okimoto said the perception of fairness in an organisation could safeguard against unintended consequences of employee monitoring systems.

“Employees need to feel confident that valuable work will be recognised, even if it’s not visible on a dashboard,” Professor Okimoto said.

“When people trust that their organisation's processes are fair, consistent and transparent, they’re less likely to de-prioritise important aspects of their job just because they aren’t being measured.” 

Professor Edwards said the findings were a reminder that not everything important can be captured by a metric.

“There are genuine benefits to using performance dashboards and other monitoring tools, but not using this technology well can pose genuine risks to employee wellbeing and retention,” he said.

“Organisations need to acknowledge the work that sits outside those measures so valuable behaviours don’t fall through the cracks. 

“It’s about striking a balance.”   

Read the research published in The International Journal of Human Resource Management. 

Collaboration and acknowledgements