When the Metrics Contradict the Mission

The Human Side of Alignment

Article 4 of 8

At a quarterly review, a claims manager presents two employees for recognition. One handled a high volume of routine claims and exceeded the department's closure target. The other spent weeks untangling an unusual return-to-work case, coordinating a revised job description and obtaining clarification before the employee resumed work. The manager thanks both for their contributions. Only the first employee receives a performance bonus because the second fell short of the same numerical target. Everyone in the room learns which achievement carries financial weight.

The leadership team may sincerely value careful decisions and successful recovery. Its reward system communicates another priority when cases with different demands are judged by a single measure. Adjusters notice the relationship between their effort and the outcomes leadership celebrates. Over time, recognition can shape where they direct attention and which difficult assignments they approach with confidence. An organization needs to understand the behavioral signals sent by its scorecards, incentive plans and performance conversations.

Rewards as Instructions

Management scholar Steven Kerr described a persistent organizational problem in his 1975 article, "On the Folly of Rewarding A, While Hoping for B." Leaders often describe one desired outcome while rewarding behavior associated with something easier to count. Kerr examined incentive systems across organizations, including an insurance firm, to explain why the discrepancy persists. Employees respond to consequences as well as instructions. A performance system becomes an everyday lesson about which behaviors the organization values enough to reward.

In claims operations, a productivity measure may appropriately identify backlogs, workload pressure or delays requiring attention. The risk develops when the measure is applied without the context needed to evaluate complex work. An adjuster handling several medically complicated claims may show fewer closures than a colleague assigned a different mix of files. A comparison without case complexity can reward the appearance of speed and overlook sound decisions. Performance reviews should give professionals a fair explanation of what excellent work looks like across different assignments.

Researchers Lisa Ordóñez and colleagues (2009) warned narrowly prescribed goals can encourage tunnel vision and other unintended consequences. Edwin Locke and Gary Latham challenged their conclusions in a published response, emphasizing the extensive evidence supporting well-designed goals. Both perspectives deserve attention because specific goals can improve performance while their implementation determines what people learn to prioritize. The practical question for workers' compensation leaders concerns the safeguards surrounding a target. Does the target help professionals make better decisions, and what happens when pursuing it conflicts with a claim's needs?

Beyond the Claims Department

Safety programs offer an instructive example of incentive design. An employer may celebrate a stretch of days without a reported injury while genuinely wanting employees to report hazards and injuries promptly. OSHA's 2018 interpretation explains safety incentive programs are permitted when employers maintain adequate safeguards against discouraging injury reporting and comply with anti-retaliation requirements. The agency also encourages positive recognition for reporting hazards and participating in safety activities. The lesson for claims organizations is to examine how rewards influence the decision to raise a concern. Leaders should test whether a program invites accurate information or makes silence seem safer.

The injured worker's experience provides another important perspective. In a 2019 Australian study of 10,946 workers, Alex Collie and colleagues found 23% described their claims experience as negative or neutral. Positive claims experiences were associated with return-to-work status after accounting for several worker, injury and claim factors. The cross-sectional study did not establish causation, and Australian schemes differ from U.S. systems. Still, the findings support asking injured workers about the process they experienced. A file can meet internal standards while the person navigating the claim remains confused about a decision or next step.

Designing Measures People Can Trust

The starting point is an audit of the rewards attached to existing measures. Leaders should compare the behaviors described in training with the behaviors used in bonuses, promotions and public recognition. Ask which work qualifies as exceptional when a claim is complicated, disputed or medically uncertain. Examine whether adjusters have a reasonable way to explain unusual case demands before their performance is judged. The purpose is to make evaluation credible to the people expected to follow it.

A practical redesign can pair an operational target with a quality check. Timely claim contact might be reviewed alongside whether the worker received a clear explanation and knew what would happen next. Return-to-work activity might be considered alongside evidence of proposed duties matching documented restrictions. Claim closure could be interpreted with file complexity, claim maturity and the appropriateness of the underlying decision. These pairings are suggested management practices rather than interventions proven to improve workers' compensation outcomes. Their value lies in making leadership expectations visible across multiple dimensions of performance.

Recognition deserves the same scrutiny as formal measurement. If an adjuster surfaces an error before a decision reaches an injured worker, leaders can acknowledge the judgment involved in raising the concern. If a team resolves a recurring communication problem, its improvement can be shared alongside traditional productivity accomplishments. Supervisors can explain why a particular decision exemplified organizational standards, giving colleagues a model they can use. Employees deserve to know how thoughtful work is evaluated when it takes longer than expected. The quality of a reward system depends partly on whether people can understand and trust its signals.

Workers' compensation organizations have legitimate reasons to track timeliness, accuracy, cost and operational performance. Those measures provide direction when leaders use them with context and sound judgment. The deeper leadership responsibility is ensuring recognition and incentives reinforce the purpose of the work. Employees learn from the decisions an organization rewards far more frequently than they reread its values statement. When the metrics and the mission send the same message, professionals gain a clearer foundation for serving injured workers responsibly.

Research Referenced

Collie, A., Sheehan, L., Lane, T. J., Gray, S., & Grant, G. (2019). Injured worker experiences of insurance claim processes and return to work: A national, cross-sectional study. BMC Public Health, 19, 927. https://doi.org/10.1186/s12889-019-7251-x

Kerr, S. (1975). On the folly of rewarding A, while hoping for B. Academy of Management Journal, 18(4), 769–783. https://doi.org/10.2307/255378

Locke, E. A., & Latham, G. P. (2009). Has goal setting gone wild, or have its attackers abandoned good scholarship? Academy of Management Perspectives, 23(1), 17–23. https://doi.org/10.5465/amp.2009.37008000

Occupational Safety and Health Administration. (2018). Clarification of OSHA's position on workplace safety incentive programs and post-incident drug testing under 29 C.F.R. § 1904.35(b)(1)(iv).https://www.osha.gov/laws-regs/standardinterpretations/2018-10-11

Ordóñez, L. D., Schweitzer, M. E., Galinsky, A. D., & Bazerman, M. H. (2009). Goals gone wild: The systematic side effects of overprescribing goal setting. Academy of Management Perspectives, 23(1), 6–16. https://doi.org/10.5465/amp.2009.37007999

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