Validity

An issue for entrepreneurs: how do you measure and reward performance? Your own and that of others.

Last time I talked about reliability, the consistency of measurement across time. Reliability and validity are two basic issues in measurement. To be effective, measures have to be reliable, i.e. repeatable, and valid.

Validity refers to the extent that you are measuring what you think you are measuing. You can have results that are reliable, that is they come out within acceptable limits time after time. If you aren't measuring what you think you are measuring reliability doesn't matter.

There are a number of different kinds of validity, so look it up on Wikipedia or in a research methods textbook.

Here's an example of how an entrepreneur I used to work for, the president of a market research sompany, used an invalid measure.

She measured the productivity of her employees according to how many hours they put in according to their time sheets. While I was there her data collection manager worked 60-80 hours a week. She thought her data collection manager (whom she treated like a daughter because she'd had a falling out with her real daughter--but another story) was the cat's meow.

My analyst came in at 8 o'clock a.m. every day, five days a week, took an hour for lunch, and left at 5PM every day. The president didn't think much of him because he didn't put in the hours that little Miss Data Collection Manager put in. She continually trashed him at every opportunity, used him as an example of a lazy employee, and wouldn't okay raises for my guy. She continually talked up her surrogate daughter and upped her salary repeatedly. My analyst finally got fed up with this nonsense and went and got a better job for more money.

Only thing was, Miss Perfect put in all those extra hours because she couln't do anything right the first time and had to do everything over. My analyst was really smart, got his work done, and went home.

So my boss lost a really good employee and rewarded a barely competent one. She measured productivity on what she could see, hours on a time sheet.

We hired a new analyst who looked really good on paper but who took really a really long time to get anything done, but put in 60-80 hours a week. My boss thought she was the cat's meow, too.

Sad, really, when you think of it. She thought she was measuring productivity, instead she was measuring ineptitude.

To repeat: how do you measure and reward productivity.

My second novel is out. Go to amazon.com and plug in my name and you'll come up with both mysteries, The Case of the Kearney Music School Murders and No Stop on Red. Neither is ready yet for the Kindle but will be.