Conventional wisdom tells us a few things about establishing key performance indicators. It goes something like this: Determine your corporate goals. Identify metrics to grade progress against those goals. Capture actual data for those metrics. Jam metrics into scorecards. Jam scorecards down the throats of employees. Cross fingers. Hope for the best.

In an episode of the TV series "Undercover Boss," Waste Management president and COO Larry O'Donnell walked in the shoes of his employees for a few days under the guise of an alternative identity. He discovered firsthand the effects his KPIs had on employees. Specifically, a productivity and efficiency KPI convinced one of his "co-workers for a day" that to satisfy her production quota she needed to urinate in a coffee can to save time. As a truck operator, stopping to find and use the restroom adversely affected her performance grades. Therefore, she decided it was more efficient to use a coffee can she kept with her in the vehicle. O'Donnell later acknowledged that this was not what he had in mind when he selected the KPI.

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