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VETERANS AFFAIRS: Performance-based Pay and the Law of Unintended Consequences
Tuesday, Jun. 10, 2014
Source: Christian Schnettelker
It is clear that the problems at the VA go deeper than individual workers, all the way to core leadership and systemic failures. In an effort to turn the organization around during the Clinton Presidency, performance-driven metrics were introduced throughout the VA. The most important being that patients not wait more than 14 days from their preferred appointment date. But the new system created an unintended consequence: supervisors created a parallel reporting system and pressured schedulers to manipulate appointments to meet performance measures. On paper, the Phoenix facility reported an average wait of 24 days with 43% seen within the 14-day window, but an investigation uncovered an average wait of 115 days and only 16% seen within the 14-day window. How can an organization implement performance-driven metrics, but avoid the pitfalls of incentive gaming and flat out manipulation?
Kirk: At the same time you implement performance measures you have to put an emphasis on the importance of accurate reporting and the penalties for dishonesty. In a system as large as the VA, it is inevitable that there will be those who actively game the system. Weeding out this behavior must be a top priority of management, even if it is only a few bad apples. To do so, it requires performance measures to be coupled with adequate auditing of those measures. Firms have long neglected to give “human metrics” the same attention as financial measures. It’s time to change this.
Patrick: This is a culture problem, but in a bureaucratic behemoth such as the VA, fixing it is easier said than done. One thing is certain, when performance-based incentives are introduced without a culture of accountability, misconduct and scandal will soon follow. Going forward, steps need to be taken to maintain the integrity of the metrics, but perhaps more importantly, legislators and management must have realistic expectations. The VA backlog has been a long-time coming, and this is what you get when you try to wish a problem away.
A Framework for Thinking Ethically (Markkula Center)