In a recent USA Today article by Rodd Wagner entitled “How Your Boss Could Be Spying On You,” Mr. Wagner provides a convincing discussion of the risk and liabilities a company faces should they decide to use statistics and computers to make decisions about their employee’s performance. It all looked so simple in the movie Moneyball; a statistician provides the coach with historical data on aspects of player performance behavior that more closely correlates with winning games than batting averages and home runs. Worked like a charm. Player on-base statistics provided a much better measure of winning than other statistics.
The analysis and prediction of human behavior has been practiced for many years and applied to many environments. Past shopping behavior has been evaluated to anticipate future product development and inventory. Similarly, manufacturing decisions and raw material acquisition can be managed using predictive data derived from consumer purchasing behavior. There is little doubt that predictive analytics has been helpful in many aspects of improving business decisions.