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Why Utilisation Metrics Don’t Tell the Whole Performance Story

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Why utilisation metrics don’t tell the whole performance story: thoroughness is billable, concision is not.

What leaders usually conclude

Caution is a real and defensible professional value, and in isolation this explanation is not wrong. What it misses is a structural detail: thoroughness is billable, and concision is not. Nobody at the firm has ever been questioned for spending too long on a piece of work. Two people have been questioned for reaching conclusions too quickly.

What the evidence suggests

V. F. Ridgway’s 1956 study of performance measurement, published in Administrative Science Quarterly, examined single, multiple, and composite performance measures and found that all three could produce undesirable consequences for overall organisational performance — often the opposite of what the measure was designed to encourage. Ridgway’s own warning was direct: “quantitative measures of performance are tools, and are undoubtedly useful. But research indicates that indiscriminate use and undue confidence and reliance in them result from insufficient knowledge of the full effects and consequences… The cure is sometimes worse than the disease.” Notably, Ridgway’s original point was a caution against over-reliance on measurement — the popular shorthand “what gets measured gets managed” actually inverts his meaning, which is itself a useful thing to notice about how the field’s own history gets simplified over time.

Applied to a billable-hour firm, the mechanism is direct. Every hour spent generates revenue; every hour saved does not show up anywhere as a virtue. The commercial model and the client’s actual interest — a fast, confident answer — diverge exactly at the margin where thoroughness stops adding value and starts adding cost. The firm has never named this tension, so nobody experiences it as a trade-off being made; it simply feels like professional diligence.

Steven Kerr’s research on reward systems sharpens the diagnosis further. Most firms would say, if asked directly, that they value efficient, confident judgement — the ability to reach a sound answer without unnecessary elaboration. What they actually reward, through the billable hour, is time spent, not judgement exercised. Kerr’s own framing applies almost exactly: the firm is rewarding A — hours logged — while hoping for B — efficient, high-quality advice — and, as his research consistently found across very different settings, people respond to what is rewarded. A partner reviewing a junior’s work for promotion is far more likely to see, and credit, a long, thorough file than a short, decisive one that reached the same correct conclusion in a fraction of the time, simply because the long file is more visible evidence of effort.

Competing explanations

A firm might instead conclude the issue is a training or confidence gap — staff who haven’t yet learned to reach conclusions decisively. This can be a genuine, separate factor. But it does not explain why the two people who have been “too quick” were questioned for it, while nobody has ever been questioned for being too slow. That asymmetry points to the commercial model, not to individual confidence.

Client-side expectations complicate the picture further. Some clients genuinely do equate thoroughness with rigour and would react badly to a faster, more concise answer, even if that answer were equally reliable — meaning the firm’s caution is not purely self-generated, but partly a rational read of what a given client audience actually rewards. This does not remove the internal incentive asymmetry, but it does mean the fix is not simply “reward speed more,” since speed is not universally what every client wants either. What is missing, more precisely, is any deliberate judgement about which clients and which matters call for which pace — a distinction the billable-hour model has no natural mechanism to draw.

A further wrinkle is that the firm’s own sense of quality is shaped by the same incentive. Thoroughness produces work that looks, on its face, more rigorous — more pages, more caveats, more visible analysis — which can be genuinely mistaken for higher quality even where a shorter, more direct answer would have served the client equally well or better. The commercial incentive and the firm’s own professional self-image reinforce each other, which is part of why the tension is so rarely named directly from the inside.

This has a compounding effect on how junior staff are trained. New hires learn, largely by observing what gets praised and what gets quietly corrected, that thoroughness is the safer choice — nobody has ever been reprimanded for producing too much analysis, while moving quickly carries a real, if rarely stated, risk of looking under-prepared. Over several years, this shapes not just individual behaviour but the firm’s entire trained instinct for what “good work” looks like, making the underlying incentive far harder to see or question later, because by then it has become indistinguishable from professional standards themselves.

Where this shows up

The pattern described here is most recognisable in professional services firms, part of the wider Professional and Knowledge-Based grouping. The same organisational questions appear, under different names, in other sectors.

Questions worth considering

  1. Where does the way this firm’s work is paid for pull against what the client actually wants?
  2. Has anyone in the firm ever been questioned for taking too long, and if not, what does that silence signal?
  3. If concision were rewarded as visibly as thoroughness, what would change about how work gets done?

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Sources

Steven Kerr, “On the Folly of Rewarding A, While Hoping for B,” Academy of Management Journal, Vol. 18, No. 4 (December 1975), pp. 769–783.

V. F. Ridgway, “Dysfunctional Consequences of Performance Measurements,” Administrative Science Quarterly, Vol. 1, No. 2 (September 1956), pp. 240–247.

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Frequently Asked Questions

Not inherently, but it creates a structural incentive toward thoroughness over speed that a firm should be aware it is not correcting for.
No — the point is that utilisation and hours-based billing reward one dimension of performance and are silent on others, which is a limitation to account for, not a reason to discard the metric.
By checking whether it has ever questioned someone for working too slowly, and comparing that against how it treats someone perceived as moving too fast.
No — it tends to be sharpest wherever the work is least standardised and most a matter of judgement, since that is where “thorough” is hardest to define objectively and easiest to equate with “more hours.”
V. F. Ridgway’s study in Administrative Science Quarterly examined single, multiple and composite performance measures and found that all three could produce undesirable consequences for overall organisational performance, often the opposite of what the measure was designed to encourage. His point was a caution against over-reliance on measurement, so the popular shorthand “what gets measured gets managed” actually inverts his meaning.
Kerr’s framing applies closely: the firm rewards hours logged while hoping for efficient, high-quality advice. A partner reviewing a junior’s work for promotion is far more likely to see, and credit, a long, thorough file than a short one that reached the same correct conclusion in a fraction of the time, simply because the long file is more visible evidence of effort.
In part. Some clients genuinely equate thoroughness with rigour and would react badly to a faster, more concise answer, even an equally reliable one, so the firm’s caution is partly a rational read of its audience. The page does not claim speed is universally what clients want. What it describes as missing is any deliberate judgement about which clients and matters call for which pace.
Thoroughness produces work that looks more rigorous, with more pages, caveats and visible analysis, which can be mistaken for higher quality even where a shorter answer would have served the client equally well. Junior staff learn by watching what is praised and quietly corrected, so over several years the incentive becomes hard to distinguish from professional standards themselves.