Tag Archives: Performance Appraisal

What is Wrong with MBA’s

Two interesting posts from Compound Thinking: What is Management? [the broken link was removed – this is one of many examples of a good blog’s domain lapsing and being bought by someone to promote unrelated items.]:

Management is helping others become great.

Well said. As Deming would say management’s responsibility is to work on improving the system (to allow everyone in the system to do great work). This encompasses a wide variety of things, including:

  • creating sensible hiring processes
  • designing systems that allow people to do great work and take pride in what they do
  • providing a system of education and training

What’s wrong with MBAs? [the broken link was removed]:

MBA graduates generally aren’t the kind of people dedicated to helping other people achieve greatness.

Instead, they want to achieve greatness on their own — which can be a worthy goal. It’s just a terrible goal for a manager. Good managers are relentlessly focused on helping the people they work for perform at their best.

There certainly is something about MBA graduates that they often focus on measuring how important they are and how much they should be paid. I believe his statement that “managers should be dedicated to helping others achieve greatness.” This can run counter to performance appraisals schemes where people have to claim responsibility for successes in order to get more cash.

It is hard enough to create and sustain great management systems without adding more challenges to achieving success. When the management system results in having credit for each success fought over (to allocate credit to whoever convinces others they deserve the credit) it is much harder.

Related: Joel’s MBADeming’s 14 obligations of managementposts about respect for peopleSeven Deadly Diseases

Righter Performance Appraisal

Speaking of “doing the wrong things righter” Microsoft has eliminated forced rankings in performance appraisal: to do performance appraisals righter.

Microsoft exec puts her stamp on human resources:

The forced curve was company policy. And it climbed up a list of employee gripes that grew as Microsoft’s stock, which accounts for much of the company’s compensation, languished.

In May, after barely a year as Microsoft’s human-resources chief, Lisa Brummel swept away “artifacts of the past,” starting with the widely disliked forced curve.

Good (see mini-Microsoft and our previous related post: Performance Without Appraisal), but the rest of the artifacts of the present should also be swept away.

Related: Failed Practice: Forced RankingNew Rules for Management? No!Performance Appraisal ProblemsDeming on Performance AppraisalsProblems Caused by Performance Appraisal

“The performance-management system tells you what it is in this company that we value and reward,” said Herman Aguinis, a professor of management at the University of Colorado at Denver Business School, and author of a recent book on the topic. “If you’re changing the things that you value and reward, people are going to change their behaviors accordingly, so it is a very powerful tool to change a company’s culture.”

True, so tell your people you value them for how there performance evaluation looks each year (not for them but the disembodied evaluation)? This is similar to Seth Godin’s post where he talks about hiring people based on good interviewing skills versus what is actually needed to do the job. This in not to say performance need not be managed, managers should be managing the people that work for them and the systems within the organization. The performance appraisal is just the wrong method.

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Incentive Programs are Ineffective

Reward and Incentive Programs are Ineffective — Even Harmful by Peter Scholtes

The greatest management conceit is that we can “motivate” people. We can’t. Motivation is there, inside people. Our people were motivated when we hired them and everyday, when they come to work, they arrive with the intention of doing a good job. Managers cannot motivate. They can, however, de-motivate. Herzberg established this over 30 years ago (Herzberg, Frederick “One More Time: How Do You Motivate Employees?” Harvard Business Review, September-October 1987, pp. 109-120. This is a reprint with commentary, of an earlier classic paper.)

The greatest managerial cynicism is that workers are withholding a certain amount of effort that must be bribed from them by means of various incentives, rewards, contests, or merit pay programs.

Related: Stop Demotivating EmployeesPerformance Without Appraisalblog posts on respect for peopleEliminate SlogansThe Leader’s HandbookTheory X management

Signs You Have a Great Job … or Not

Signs you have a great job … or not by Jeanne Sahadi

This article, while presenting an overly simplistic view in my opinion, actually provides some good reminders. The article focuses on 12 questions that seem to be the focus of a recent business book. And some of those questions provide good reminders to managers of things they should pay attention to, such as:

  • Do I know what’s expected of me at work?
  • At work, do I have the opportunity to do what I do best every day?
  • In the last 7 days, have I received recognition or praise for doing good work?
  • Is there someone at work who encourages my development?
  • Does the mission/purpose of my company make me feel my job is important?

For me, this list is more valuable than most of these types of things you see in “pop management” articles. Maybe my mood (I played some good basketball today, which always puts me a good mood) is causing me to be overly positive, but I actually think this article is worth a few minutes to read and then some reflection. Continue reading

Problems Caused by Performance Appraisal

I ran across a great article on the problems created by our common use of performance appraisal today: Unjust Deserts (pdf format) by Mary Poppendieck:

As Sue’s team instinctively realized, ranking people for merit raises pits individual employees against each other and strongly discourages collaboration, a cornerstone of Agile practices.

There is no greater de-motivator than a reward system that is perceived to be unfair.

The article does a good job of explaining these, and several more, problems caused by performance appraisal. It also provides some good thoughts on how to manage effectively, including:

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Performance Appraisal Problems

The Struggle To Measure Performance [the broken link was removed], Business Week:

One company that recently decided to dump forced rankings altogether is Chemtura (CEM), a $3 billion specialty chemicals company formed by the July merger of Crompton in Middlebury, Conn., and Great Lakes Chemical in Indianapolis.

“The system forced me to turn people who were excellent performers into people who were getting mediocre ratings,” says Eric Wisnefsky, Chemtura’s vice-president for corporate finance. “That demotivates them, and they’d follow up with asking: ‘What could I do differently next year?’ That’s a very difficult question to answer when you feel that people actually met all your expectations.” Chemtura’s new process still assigns grades. But to better motivate employees in the middle, labels such as “satisfactory” have been upgraded to phrases such as “successful performance.”

As we mentioned in our previous thread on performance without appraisal more organizations are acting on what most people know – performance appraisal process is counter-productive. Deming on Performance Appraisal, Out of the Crisis, page 101:

Evaluation of performance, merit rating, or annual review… The idea of a merit rating is alluring. the sound of the words captivates the imagination: pay for what you get; get what you pay for; motivate people to do their best, for their own good. The effect is exactly the opposite of what the words promise.

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Performance of People and Appraisal

The Statistical and Scientific Thinking blog, by John Dowd, has several interesting posts on the Performance of People [the broken link was removed]:

Why can’t performance be numerically rated and ranked? It can’t be defined operationally, it can’t be measured with any degree of precision, it can’t be separated from other effects, and it is destined to vary over time in any case. Any one of these factors present significant (if not insurmountable) problems itself. Combined the problems create an impossible barrier.

Performance of People III [the broken link was removed]:

This essentially ended the practice of raise administration as a ‘zero sum’ game. Many (if not most) companies make a total figure available for raises. That figure is then stated in terms of a percentage of total salaries. Each supervisor is instructed to average that percentage in administering raises among his or her employees. Thus, a given employee can only receive more than the average if another employee within the same supervisory unit receives less. This fosters competition within small units of the company. That is disastrous.

Related Links:

Deming’s Ideas at Markey’s Audio Visual

Last week at the Deming Institute seminar: How to Create Unethical, Ineffective Organizations That Go Out of Business, Mark Miller, General Manager, Markey’s Audio Visual spoke on Markey’s experience adopting Deming’s ideas.

It was a great presentation. He did a great job of explaining what it was like to work at a company focused on applying Deming’s management philosophy. I capture some of the points he talked about below.

1986 Markey’s started providing Audio Visual support to all Deming’s seminars. The technicians came back after 3 sessions to encourage Mark Miller (employee number 16 at Markey’s) to attend, himself. He went to a Deming 4 day and decided the owners should attend. They did and then Markey’s sent employees to attend future Deming 4 day seminars.

He recommended, The Team Handbook and The Leader’s Handbook by Peter Scholtes.

Points:

  • Constancy of Purpose
  • Their business has greatly changed. Customers used to need a service provider to project onto a screen, now they all own projectors for laptops, Markey’s needs to anticipate the changing needs of customers and anticipate those needs
  • Page 141 of Out of the Crisis: “Profit in business comes from repeat customers, customers that boast about your product of service” (Markey’s uses Deming’s books in the training for staff)
  • Continue reading

Performance Without Appraisal

In response to the Alternatives to Stack Ranking? post on the popular Mini-Microsoft blog.

I’m also taking some time to contemplate on Deming’s points and assess how Microsoft is doing against them.

What I would deeply appreciate is real-world experience from people living with stack ranking alternatives.

I strongly suggest chapter 9 (Performance Without Appraisal) of The Leader’s Handbooks, by Peter Scholtes. You mentioned Deming. When asked “If we eliminate performance appraisals, as you suggest, what do we do instead?” Dr. Deming’s reply: Whatever Peter Scholtes says.” (page 296).

Abolishing Performance Appraisals by Tom Coens and Mary Jenkins also provides great practical examples.

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Actually, I just noticed the previous post to the mini-microsoft blog pointed to us.

I keep looking at the books about how to grow beyond using industrial-era performance reviews (yes, anti-stack ranking books are out there). I don’t think I’ll be able to fit the books in so they’ll have to wait until I get back. But I am printing out for reading later some various anti-stank ranking articles I found, especially this one over at Curious Cat:

* Total Quality or Performance Appraisal: Choose One by Peter Scholtes.

The comments on the mini-microsoft blog shows performance appraisal continues to be an emotional topic. People on opposite sides of the debate are very passionate.

I admit it took me longer to accept Dr. Deming’s thoughts on performance appraisal than other ideas (and that is even with Peter Scholtes being a friend which gave me the opportunity to discuss the idea with him). So I understand it is not an easy concept to accept. Management Craft has also been focusing considerable energy on this topic recently.

This is the 100th post to the Curious Cat Management Improvement blog.

Previous Performance Without Appraisal post.

Performance without Appraisal

re: Managing with Trust post from Coding Horror

This interesting post includes the quote:

It seems cheap to dispatch [performance reviews] without suggesting some alternative.”

Dr. Deming would mention Peter Scholtes thoughts on why performance appraisals were bad management when asked about his belief that performance appraisals should be eliminated. In the short article Performance Without Appraisal: What to do Instead of Performance Appraisals, Peter wrote:

Dr. Deming said of Performance Appraisals, “Stop doing them and things will get better.” He was correct. Many organizations, however, wonder what to do instead.

For those that do require “some alternative” Peter included some good ideas in The Leader’s Handbook(see chapter 9 “Performance without Appraisal pages 293 to 368). This chapter has excellent material for any manager. In the interest of full disclosure I not only think Peter’s ideas are great I consider him a friend and host his web site (he is retired).

Abolishing Performance Appraisals: Why They Backfire and What to Do Instead by Tom Coens, Mary Jenkins (forward by Peter Block), 2000, is another excellent source of “what to do instead.”

I think the Managing with Trust post has some good ideas but I don’t agree with everything. “In order to manage a project, you have to objectively measure what your teammates are doing.” I don’t agree with this quote. I agree you must manage a project and “that trusting your team is not a substitute for managing them.” However a manager must manage many unmeasurable factors. The stuff that can be measured is the easy part. The largest part of the job is managing the things that are unmeasurable.

Deming explores the idea of rating people on page 109 of Out of the Crisis and states “fair rating is impossible.” He goes on to explore what is commonly known as the “red bead experiment” where he shows an example of how easy it is to assign numbers to people to aid in managing. But the experiment actually shows how easy it is to be distracted by numbers instead of actually managing. It is easier to make decisions based just on the numbers you have than to take on the challenging task of managing. And to help this process along it is easier to reduce employees to simple numbers (ratings or rankings) than to deal with the complexity and interdependence that actually exists.

The Managing with Trust post also mentions Tom Demarco. I am in the midst of reading the second edition of Peopleware: Productive Projects and Teams by Tom Demarco, Timothy Lister and it is an excellent book.