The Benefits and Downfalls of Percentages

Published February 2016

I’ve written several times in the past about measuring and reporting performance. It’s vital that employees know the score. In fact, Patrick Lencioni pegged “immeasurement” or the absence of pertinent measurements for one to assess their own performance as one of the “three signs of a miserable job” in his book by the same title.

Determining what to measure should involve balance with a handful of metrics covering safety, quality, delivery and financial performance. For each of these categories, employees should understand how the organization as a whole is doing, the goal, and how their individual work area is performing. Is our team supporting or detracting from the goal? This then aligns local improvement efforts to the goals of the organization. Are we (am I) getting better?

This month I want to offer some thoughts on how to report the score.

Let’s assume we operate a call center and our goal is to answer incoming calls within three rings. We monitor the number of calls that exceed three rings as a defect. During February we recorded 138 defects. We test some improvement ideas and in March we have 152 three-plus ringers. Were our tests successful?

One might assume not, based on the absolute defect counts. But March had two more work days than February. Also our call center is associated with income taxes and the number of callers spiked in March. We took 1451 calls in February and 5329 calls in March.

Generally it’s a good idea to normalize data so that apples-to-apples comparisons can be made. Using our example above, we can now see that our defect rate for failing to answer a call within three rings fell from 9.5% in February to 2.9% in March … a tremendous improvement!

The Occupational Health & Safety Administration (OSHA) requires that businesses report their number of worked-related accidents and illnesses per 200,000 employee-hours worked. While this basis may seem rather abstract on the surface, it is for good reason. An approximate number of hours worked in a year for a full-time employee is roughly 2000. Thus 200,000 employee-hours represent approximately 100 full-time workers working for one year. Therefore the normalized rates from various companies can be reasonably compared as the percent of full-time workers experiencing a worked-related accident or illness in a year.

While expressing values as a percent is a commonly accepted technique, it shouldn’t be the de facto metric. I once worked on a project to reduce broken tools in a machining environment. Although typical failure rates were about one percent, significant savings were possible because the tools used and the parts machined were very expensive. A broken tool typically resulted in both being scrapped. Thus, we reported the number of broken tools per 1000 tools used.

Another downfall of using percentages is that most of us have a bias wired into our brains after several years of formal education. As a youngster, I became programmed to know that any test or paper with a score of greater than 91% typically came with a gold star or the letter “A”. That was worthy of showing Mom!

Thus, explaining to a workforce raised via the same education system, that John Deere was demanding that 99.975% of our products be defect-free, was nearly impossible. We had to translate the goal into 250 defects per million opportunities.

Take time to explain the measurement to employees when normalizing data. Don’t assume that everyone will understand even simple percentages.

Finally, there may be a few measurements that are so basic or important that you don’t want to risk the potential for “watering down” caused by normalizing. An example might be the number of work-related accidents and illnesses. While the number reported to OSHA will still need to be in their required format, your internal reporting goal may be to have all employees understand simply that we had four recordable accidents this year and that’s four too many.

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