Behavior versus Outcome Control

The balanced scorecardOpens in new window and strategy map are techniques used primarily by top and upper-level managers. Lower-level managers focus on the performance of people at the department level, who must meet goals and standards if the organization is to attain its overall goals.

There are two different approaches to evaluating and controlling team or individual performance and allocating rewards.

1. One approach focuses primarily on how people do their jobs
2. whereas the other focuses primarily on the outcomes people produce.

Behavior Control

• Do people get to work on time?
• Do they stay focused on their tasks or spend a lot of time socializing with colleagues?
• Do they dress appropriately for the job?
• Do they perform their jobs according to established methods or supervisor instructions?

With behavior control, managers provide heavy supervision and monitoring, pay attention to the methods people use to accomplish their jobs, and evaluate and reward people based on specific criteria, might include areas such as appearance, punctuality, skills, activities, and so forth.

Information technologyOpens in new window has increased the potential for managers to use behavior control. For example, GPS tracking devices installed on government-issued vehicles are helping many communities reduce waste and abuse, in part by catching employees shopping, working out at the gym, or otherwise loafingOpens in new window while on the clock.

In Denver, 76 vehicles equipped with GPS units were driven 5,000 fewer miles than the unequipped fleet during the same period the year before, indicating the value of this type of quantitative measure. Managers in many companies monitor employees’ e-mail and other online activities. Some retailers use cash-register management software that monitors cashier’s activities in real time.

Outcome Control

A second approach to control is to pay less attention to what people do than to what they accomplish.

With outcome control, managers don’t supervise employees in the traditional sense. People have a great deal of autonomy in terms of how they do their jobs—and sometimes in terms of where and when they do their jobs—as long as they produce desired outcomes.

Rather than monitoring how many hours an employee works, for example, managers focus on how much work the employee accomplishes—a human resource management model known as ROWE (Results-Only Work Environment)Opens in new window.

Switching from behavior control to outcome control had significant positive effects at Best Buy headquarters, and managers are now implementing a form of the ROWE systemOpens in new window in the retail stores. The Results-Only Work Environment program at Best BuyOpens in new window provides an illustration of outcome control carried to the extreme.

With outcome control, ITOpens in new window is used not to monitor and control individual employee behavior but rather to assess performance outcomes.

For example, at Best BuyOpens in new window, the manager of the online orders department can use IT to measure how many orders per hour his team processes, even if one team member is working down the hall, one working from home, one taking the afternoon off, and another working from her vacation cabin 400 miles away. Good performance metrics are key to making an outcome control system work effectively.

However, outcome control is not necessarily the best for all situations. In some cases, behavior control is more appropriate and effective, but in general, managers in successful organizations are moving away from closely monitoring and controlling behavior toward allowing employees more discretion and autonomy in how they do their jobs.