Kelleys Black-box Law
The “Kelley’s Black Box Law” was first proposed by Barry P. O’Keefe and William H. Kelley in 1990. The law is described as a set of three distinct principles governing the measurement of human performance in organizations. According to their paper, these principles represent a coherent set of hypotheses that should be tested in order to better inform organizational decision-making. In brief, the three principles (also known as Kelley’s Paradox) are:
First- The paradox of causality: The ability to control an outcome is determined by the extent to which it can be directly managed, not what could be indirectly managed.
Second- Measurement of Human Performance should be Limited: measurements should focus on benefits rather than on costs, and should be limited to the things that are either directly controllable, or that can be strongly influenced by managerial actions.
Third – Increase systemic Efficiency and Flexibility: measurements should seek to provide increased systemic efficiency, and offer flexibility to allow management to respond to changing conditions.
Kelley’s Black-box Law has had an effect on organizational decision-making and performance assessment in many companies across a variety of industries. One example is the banking industry, which has increasingly begun to focus their performance evaluations on customer satisfaction and loyalty, instead of simply profits and cost-cutting measures. By doing so, banks have become better equipped to meet customer needs and expectations. Additionally, many companies have utilized the principles of Kelley’s Black Box Law to help streamline their processes, promote leaner development and increase value for their customers.
In essence, Kelley’s Black Box Law can be summed up as a set of principles which seek to limit measurements and increase systemic efficiency in order to maximize the success of an organization. The principles are general in nature and can be applied to any situation where performance is being evaluated, in both the public and private sections. As the nature of work and organizations change, so too do the principles of Kelley’s Black Box Law, requiring organizations to stay abreast of the changing landscape in order to remain competitive.