Today I present a post by Mike Stoecklein. Thank you to Mike that he alows me to republish this here.
I still remember some things from when I was in kindergarten. My teacher was Mrs. Sears. We took naps and I learned to skip. One day we had a fire drill that was supposed to include a chance to see a real fire truck and get one of those plastic red fire hats. The problem was that the kid who led us out of our room took a wrong turn and we were on the other side of a fence. We could see the fire truck and the hats, but did not get to ride the truck or get a hat. I also remember naps and drawing with crayons. Mrs. Sears gave me a cut-out of a butterfly and I drew a farm. I’ve been doing landscapes ever since.
Kindergarten was great, but things changed in 1st grade.
Why do we think we need grades? Why do we think that helps? The answer is we don’t need them and they not only do not help, they harm.
Dr. Deming was clear and unrelenting on this point. He summarized this in Figure 10 from his book “The New Economics“.
Here’s a quote from the book. “Figure 10 shows some of the forces of destruction that come from the present style of reward, and their effects. What they do is to squeeze out from an individual, over his lifetime, his innate intrinsic motivation, self-esteem, dignity. They build into him fear, self-defense, extrinsic motivation. We have been destroying our people, from toddlers on through the university, and on the job. We must preserve the power of intrinsic motivation, dignity, cooperation, curiosity, joy in learning, that people are born with.”
I heard him use the term “mythology of management” and “prevailing style of management” interchangebly. He showed us that much of what we see in management today (not that different from when he was alive) was actually a modern invention, not something that was inevitable. We are led to believe that the best way to manage an organization is to chop it up into parts, manage the parts, hold people responsible (accountable) for the numbers produced by the parts. We then evaluate people on their performance (grading) and think that the organization is the sum of the parts. It’s mythology, pure and simple. The mythology of modern management.
Grading people (starting with kids) is a force of destruction. It is not necessary, yet we do it? Why?
Performance evaluation is also a force of destruction. It started with grading. Why do we do it? It is not necessary and it is destructive.
Dr. Deming labeled this as part of the “Seven Deadly Diseases of Western Management” in his 1986 book “Out Of The Crisis“, number 3 in the quote below.
“Deadly diseases afflict most companies in the Western world. An esteemed economist (Carolyn A. Emigh) remarked that cure of the deadly diseases will require total reconstruction of Western management.
1. Lack of constancy of purpose to plan product and service that will have a market and keep the company in business, and provide jobs.
2. Emphasis on short-term profits: short-term thinking (just the opposite from constancy of purpose to stay in business), fed by fear of unfriendly takeover, and by push from bankers and owners for dividends.
3. Evaluation of performance, merit rating, or annual review.
4. Mobility of management; job hopping.
5. Management by use only of visible figures, with little or no consideration of figures that are unknown or unknowable.
Peculiar to industry in the U.S., and beyond the scope of this book.
6. Excessive medical costs. As William E. Hoglund, manager of the Pontiac Motor Division, put it to me one day, “Blue Cross is our second largest supplier.” The direct cost of medical care is $400 per automobile (“Sick call,” Forbes, 24 October 1983, p. 116). Six months later he told me that Blue Cross had overtaken steel. This is not all. Additional medical costs are embedded in the steel that goes into an automobile. There are also direct costs of health and care, as from beneficial days (payment of wages and salaries to people under treatment for injury on the job); also for counseling of people depressed from low rating on annual performance, plus counsel and treatment of employees whose performance is impaired by alcohol or drugs.
7. Excessive costs of liability, swelled by lawyers that work on contingency fees.”
Here’s an elaboration of #3:
“Evaluation of performance, merit rating, or annual review. Many companies in America have systems by which everyone in management or in research receives from his superiors a rating every year. Some government agencies have a similar system. Management by objective leads to the same evil. Management by the numbers likewise. Management by fear would be a better name, someone in Germany suggested. The effect is devastating: It nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry and politics. It leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. It is unfair, as it ascribes to the people in a group differences that may be caused totally by the system that they work in. Basically, what is wrong is that the performance appraisal or merit rating focuses on the end product, at the end of the stream, not on leadership to help people. This is a way to avoid the problems of people. A manager becomes, in effect, manager of defects. 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. Everyone propels himself forward, or tries to, for his own good, on his own life preserver. The organization is the loser. Merit rating rewards people that do well in the system. It does not reward attempts to improve the system. Don’t rock the boat. If anyone in top management asks a plant manager what he hopes to accomplish next year, the answer will be an echo of the policy (numerical goal) of the company. (James K. Bakken, Ford Motor Company.) Moreover, a merit rating is meaningless as a predictor of performance, except for someone that falls outside the limits of differences attributable to the system that the people work in (cf. later pages). Traditional appraisal systems increase the variability of performance of people. The trouble lies in the implied preciseness of rating schemes. What happens is this. Somebody is rated below average, takes a look at people that are rated above average; naturally wonders why the difference exists. He tries to emulate people above average. result is impairment of performance.
“One of the main effects of evaluation of performance is nourishment of short-term thinking and short-time performance. A man must have something to show. His superior is forced into numerics. It is easy to count. Counts relieve management of the necessity to contrive a measure with meaning. Unfortunately, people that are measured by counting are deprived of pride of workmanship. Number of designs that an engineer turns out in a period of time would be an example of an index that provides no chance for pride of workmanship. He dare not take time to study and amend the design just completed. To do so would decrease his output. Likewise, people in research and development are rated on the number of new products that they develop. They tell me that they dare not stay with a project long enough to see a product into manufacturing; that their rating would suffer if they did. Even if his superior appreciates effort and ability to make lasting contributions to the methods and structure of the organization, he must defend with tangible evidence (viz., counts) his recommendations for promotions.
“Evaluation of performance explains, I believe, why it is difficult for staff areas to work together for the good of the company. They work instead as prima donnas, to the defeat of the company. Good performance on a team helps the company but leads to less tangible results to count for the individual. The problem on a team is: who did what? How could the people in the purchasing department, under the present system of evaluation, take an interest in improvement of quality of materials for production, service, tools, and other materials for nonproductive purposes? This would require cooperation with manufacturing. It would impede productivity in the purchasing department, which is often measured by the number of contracts negotiated per man-year, without regard to performance of materials or services purchased. If there be an accomplishment to boast about the people in manufacturing might get the credit, not the people in purchasing. Or, it could be the other way around. Thus, teamwork, so highly desirable, can not thrive under the annual rating. Fear grips everyone. Be careful; don’t take a risk; go along.”
I’ve blogged about this before, and will do it again. Repetition got us into this mess and only relentless repetition will get us out.
The perspective from Peter Scholtes.
The perspective from Alfie Kohn.
And Dr. Deming’s Perspective.
Check out Mike’s blog, he is discussing Lean topics there since 2010.
Here you can find the original post on gembawalkabout.com