Quotas, What Are They Good For?

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If you look hard enough at our industry (really at all industries), you’ll find many implicit quotas in play. For example, some companies demand a minimum set of hours worked per week.

This reminds me of an apocryphal story of the “know where man”. Here’s one variant of this famous legend as described on snopes:

Nikola Tesla visited Henry Ford at his factory, which was having some kind of difficulty. Ford asked Tesla if he could help identify the problem area. Tesla walked up to a wall of boilerplate and made a small X in chalk on one of the plates. Ford was thrilled, and told him to send an invoice.

The bill arrived, for \$10,000. Ford asked for a breakdown. Tesla sent another invoice, indicating a \$1 charge for marking the wall with an X, and \$9,999 for knowing where to put it.

In this variant, Ford is surprised by the price because \$10,000 is a lot to pay for a few minutes of work. But as Tesla points out, he’s not paying for Tesla’s time, he’s paying for a solution to an expensive problem.

Another example is the idea of measuring a developer’s productivity by lines of code. Unless you sell code by the line, this is also pointless as Bill Gates once pointed out:

Measuring programming progress by lines of code is like measuring aircraft building progress by weight

Set working hours is another example of a poor quota. Developers aren’t paid for lines of code, number of hours in the office, or being in the office at certain hours. They’re paid to create value!

I got to thinking about this after reading an article completely unrelated to software - this heart wrenching and infuriating account of young offenders being enlisted as confidential informants and placed in extremely dangerous situations that far outweigh the gravity of their alleged crime.

One thing in particular caught my attention:

Mitchell McLean has come to see his son’s death as the result of an equally cynical and utilitarian calculation. “The cops, they get federal funding by the number of arrests they make—to get the money, you need the numbers,” he explained, alluding to, among other things, asset-forfeiture laws that allow police departments to keep a hefty portion of cash and other resources seized during drug busts. \

Notice the incentive here. The focus is on number of arrests. This focuses on a symptom, but not on the actual desired outcome.

That’s the problem with quotas. They rarely lead to the actual outcome you want. They simply reward gaming the quota by any means necessary.

This is not to say that all quotas are useless. Perhaps there are cases where they are called for. But they have to overcome the dreaded law of unintended consequences.

The law of unintended consequences, often cited but rarely defined, is that actions of people—and especially of government—always have effects that are unanticipated or unintended.

I imagine a good quota would be one in which it brings the system closer to the desired outcome and manages to avoid unintended consequences that would set the overall system back in worst shape than before. For example, perhaps if the gulf between your current state and the desired outcome is huge, a quota might help make small gains.

If you have examples where you think quotas produce the desired outcome with negligible unintended consequences, please do comment.