Businesses in the service sectors have taken many management practices straight out of the factories of the 20th Century. Often they don’t work.

Let me use one of my staff’s previous performance reviews as a case study.

He worked for a large corporation and its performance review policy was worker and boss would sit down once a year for 20 minutes.

The boss had a set checklist for everyone – the same one.

It was a single A4 page covered with metrics along which each staff member would receive a score from ‘subpar’ through ‘needs improvement’ and ‘meets expectations’ to ‘exceeds expectations’.

My employee told me that his boss ticked ‘meets expectations’ for everything … regardless of who he was scoring.

For people who have worked in large corporations, nothing would be surprising so far. However, my employee and his boss had an unusually candid relationship.

When my employee asked his old boss what he had to do to ‘exceed expectations’, the boss intimated that head office had decreed that no-one was allowed to ‘exceed expectations’.

You could surmise that this might have merely been an attempt to keep things simple. If everyone is average and everything works well enough, then no-one gets a raise, no-one needs leadership coaching, no budgets are stressed, and everyone remains motivated to ‘exceed expectations’.

However, this case study skewers the saying <em>you can’t manage what you can’t measure</em>. This company’s performance reviews were <em>not </em>measuring, though they looked a lot like it. Their measurement tools and practices didn’t match the nature of their staff’s tasks in a services industry.

So this company was using an unreliable yardstick – a single A4 of tick-and-cross – and an unreliable measurer: the manager’s judgment in that one 20-minute block once a year.

Plus they had kneecapped both with a rule that no-one can be better than just ‘good enough’.

Here’s the rub. Most jobs these days aren’t on conveyor belts. Most create ‘value’ – the unmeasurable flipside of ROI – through services. Performance in these jobs can be accurately judged and appraised by involved and well-trained managers, but job performance in these sorts of roles cannot be accurately summed up with numbers.

Here are the crucial toolkit words – and these words are a great hammer and anvil to crack so many things apart: qualitative and quantitative.

Management by measurement is quantitative. It is accountancy played with people. It fits neatly with the MBA approach to business.

Management by attention, involvement and open dialogue is qualitative. It understands and then secures consensus. It doesn’t fit anything neatly.

Working with people’s qualities isn’t neat, but it <em>is </em>where value comes from in the service sector.