I would firstly like to say thank you to the Cove. My Section has recently achieved ISO9001 certification in no small part to the information I've found here and taken away and applied.

My company is now looking to introduce a new performance appraisal system. To me, a performance appraisal system should be one that helps team members understand what is required of them and gives them a way of knowing when they have achieved it, not one that gives people a score for things like communication skills or punctuality.

If the former is the type of performance appraisal system that we adopt, this also causes me concern. The thought of holding individuals responsible for achievement of objectives seems to fly in the face of systems thinking where the process should be engineered to achieve the objectives, not individuals. It also doesn't seem to fit with Deming teachings. Am I seeing this the right way? If this is the case I would be very interested to hear how other companies have balanced performance appraisals with the process delivering objectives.

I look forward to your thoughts. :thanx:

I would firstly like to say thank you to the Cove. My Section has recently achieved ISO9001 certification in no small part to the information I've found here and taken away and applied.

My company is now looking to introduce a new performance appraisal system. To me, a performance appraisal system should be one that helps team members understand what is required of them and gives them a way of knowing when they have achieved it, not one that gives people a score for things like communication skills or punctuality.

If the former is the type of performance appraisal system that we adopt, this also causes me concern. The thought of holding individuals responsible for achievement of objectives seems to fly in the face of systems thinking where the process should be engineered to achieve the objectives, not individuals. It also doesn't seem to fit with Deming teachings. Am I seeing this the right way? If this is the case I would be very interested to hear how other companies have balanced performance appraisals with the process delivering objectives.

I look forward to your thoughts. :thanx:
Welcome to the Cove, Keely!:bigwave:

I sympathize with your concern.

Have the managers with this plan explained how the workers will benefit under this plan? What is the benefit for the organization?

In my personal experience, I have never seen an individual performance system which was truly "fair." Close examination of almost any such plan at any organization will uncover built-in biases. Almost always, the biases end up measuring some attribute or characteristic which is completely beyond the control of the individual (similar to Deming's Red Beads.) The worst biases of all are those which measure attributes and characteristics which have absolutely nothing to do with production of the product or service and almost everything to do with some prejudice of the boss.

As examples of completely unfair performance appraisal factors, I cite some I have seen or overheard in the last six months:

an organization downgrades employees who do not contribute money and volunteer service to the owner's pet charity.
an organization arbitrarily terminates the bottom ten percent ranked employees
an organization downgrades employees who do not put in "volunteer hours" after they clock out
I overheard a guy in a cocktail lounge [who had been overserved] detailing the slimy way he and his fellow executives kept "uppity N-word" folk in line by keeping their job appraisals at borderline. I gathered he was trying to woo some woman by telling how "powerful" he was.
An organization penalizes employees for speaking any language other than English on the premises, regardless if they have customer contact or not. I asked, "How do you deal with non-English speaking customers?" The reply, "We don't have any!" I regret I didn't follow up with, "And why do you suppose you don't have any non-English speaking customers?" My thought at the time was, "This jerk doesn't deserve any free tips!"

I'm happy you brought this up as we are going to be reviewing our performance review/apprasial system soon as well.

Your concern is whether the apprasial system can be fair and unbiased, and how it can be justified in a systems thinking environment.

One statement in particular caught my attention. You state, "The thought of holding individuals responsible for achievement of objectives seems to fly in the face of systems thinking where the process should be engineered to achieve the objectives, not individuals."

If personnel are a component of the process to be acheived then they need to be measured as a part of the process. IMHO, the human element may be the most critical item to measure. (depending on the process of course)

In order for a process to perform as engineered, it must be repeatable. Repeatability depends on the reliability of the components of the system. Non-human components will function as designed (most of the time) as long as it is properly installed, programmed and maintained. The human components, on the other hand, may or may not function up to snuff depending on a host of factors not necessarily related to the process itself. (sometimes you just have a bad day)

I look at it this way. Employees must function a certain way in order for the process to perform as planned. Self-Discipline and responsibility are the two human factors needed to gain the desired repeatability. Where humans are not held accountable performance suffers. Humans also require feedback as to how they are performing. Think of it as preventive maintenance.

Can there be a system for performance evaluation that is entirely free of bias? I would doubt it, but lets keep in mind that old adage. If you can't measure it you can't control it. Try to keep in mind that you are trying to measure a component of the system (or process) and hopefully that will keep you on track.

I apologize for the rambling, Early Sunday is not my best time.

James

Welcome to the Cove!
I'm going to pull quotes from the two responses posted at this point and then offer my own opinion, and an illustration:

...lets keep in mind that old adage. If you can't measure it you can't control it.
Almost always, [we] end up measuring some attribute or characteristic which is completely beyond the control of the individual (similar to Deming's Red Beads.)
IMO, the first quote captures one of the most harmful myths of quality improvement, and the second shows why it's harmful. When we try to quantify things that can't be quantified objectively, fear and loathing are the inevitable results. Measuring human performance is not an exercise for amateurs, and even in the realm of "experts" the science is fraught with controversy and conflicting "evidence." My own opinion is that in manufacturing, exemplary human performance should be mostly transparent. If we design efficacious processes, it must be assumed that the human component will represent common skills and aptitude. Outstandingly poor performance will be readily detectable, and unusually good performance is a sign that the expectations have probably been set too low, or that a person and position have been mismatched. If the process output is at the expected level, neither extreme of human performance is necessary, and you don't have to be a weatherman to know which way the wind is blowing.

Back when I worked for Dilbert's boss, I was supervising an inspection department in an electronics manufacturing operation. There was a circuit board inspector who was perfectly matched to the job. She was good at it--able to spot a cold solder joint or backwards diode from across the street--she liked her work, and wasn't affected in the least by the monotony of it. She got along well with coworkers, her output was timely and accurate, and she was able to deal effectively and diplomatically with the people whose work she was inspecting. In short, the ideal human element for the process at hand.

I gave her her first annual appraisal (after I had been hired) and it reflected my appreciation for her efforts, my thankfulness that she required little or no supervision, and my general gratitude for her presence. I sent the appraisal paperwork upstairs to my boss for his approval, and he called me to his office the next day to talk about it. "This appraisal for Sally is no good," he said, "there are no 'needs improvement' items." I patiently explained that there were no areas where improvement was needed, and that Sally was performing exactly as desired. The boss, who apparently had just gotten finished reading a management book (or more likely, someone had read one to him) said, "Everyone can always improve something, and it's your job as a supervisor to help people to improve."
"But," I said, "sometimes the best help you can give people is to leave them alone and let them do their jobs." He was having none of it; his personal rule was that all employee appraisals must include objectives for improvement. Thus I was forced to invent something and explain to the employee why I had to do it.

If the process is performing as expected (i.e., it has been optimized) then messing around with it will lead to trouble. If the process is not performing as expected, the chances are great that the sob-optimum performance is due, as Wes (and Deming) said, to issues beyond the control of the operators. When employee performance adversely affects an optimized process, there's no need for appraisals to identify the problem. In short, traditional employee performance appraisals are usually at best a waste of time.

Welcome to the Cove, Keely! :bigwave:

Excellent input here on a critically misunderstood procedure. It is such good commentary that I have little to add (gasp!) except I want to warn against ever, ever ever evaluating an employee without starting him or her off in his or her job with a complete set of expectations--ideally, let him or her have a copy of the evaluation so (s)he can know what criteria (s)he will eventually be evaluated against. It's simple enough and the least we can do, yet I have never seen it in action. Indeed, most often I have had to grope my way through my job, either receiving an hour-long verbal walk-through or not...usually I eventually wrote work instructions for the job because there wasn't even that--sigh.

Doing performance evaluation is dreadfully hard because by the time it goes down on paper, half a year or more of work has gone by and the evaluator makes these comments on what ends up to be memory and judgement. Some of us are far better at this than others. Worse, many supervisory and management personnel use it as a reason to avoid making the effort to evaluate more frequently--to tell the associates what they want, what is going well or not--they just get caught up in a daily stream of productivity and six months go by...oh! Time to do those evals. No wonder almost everyone I know of hates doing them and receiving them. I always have.

I have one idea for the "opportunity for improvement" issue: can the person be invited to input a goal, perhaps taking a class to become better trained in this subject or that, maybe not even directly work related? My evals include such a line item, which might satisfy those management types who think there is no such thing as a really top-rate employee.

I think it is time for me to write an article on this subject, which will be interesting because the Deminguite in me shrinks from the notion but it is so important to managers that there ought to be a better set of tools than they now have--for whomever cares to use them.

I have one idea for the "opportunity for improvement" issue: can the person be invited to input a goal, perhaps taking a class to become better trained in this subject or that, maybe not even directly work related? My evals include such a line item, which might satisfy those management types who think there is no such thing as a really top-rate employee.

Why support destructive thinking by creating irrelevant goals? My strategy in these instances (beginning with the one I related above) is to make something up that resembles an improvement effort, but causes no unnecessary extra effort for anyone. The idiots who insist on improvement when none is needed will invariably accept whatever is proposed so long as it's appropriately obtuse and includes a few gratuitous buzzwords. Remember--these people are looking for placeholders, not actual helpful ideas. Give them what they want, and nothing more.

Many good thoughts already. I would suggest that Alfie Kohn has some of the most passionate writings against performance appraisals - see http://www.alfiekohn.org

Even if I had a "perfectly fair" appraisal system that accurately rated and ranked the employees, it is still suggested that this can be harmful. You are dooming half of your employees to failure - to being below average. Also, does this information really help you employees? A good argument I have heard is that we grade fruit. Bruised fruit is still useful - we use if for juice. Perfect looking fruit is sold as whole fruit. But does such sorting and classifying really work for humans?

As a closing thought - do you give your wife/husband and children performance appraisals? If it is so good for corporations, why isn't even more important for our families? Don't your children need a "communications score"? Was your spouse above or below average last year? Can you imagine the results? Well, the same thing happens at the workplace.

Why support destructive thinking by creating irrelevant goals? My strategy in these instances (beginning with the one I related above) is to make something up that resembles an improvement effort, but causes no unnecessary extra effort for anyone. The idiots who insist on improvement when none is needed will invariably accept whatever is proposed so long as it's appropriately obtuse and includes a few gratuitous buzzwords. Remember--these people are looking for placeholders, not actual helpful ideas. Give them what they want, and nothing more.Please excuse me, why do you assume the goal is irrelevant? Do you think it's possible the inspector (she sounded awesome) might have a goal--perhaps to pursue some education in this or that--that would have worked? Did you ask her?

Please excuse me, why do you assume the goal is irrelevant? Do you think it's possible the inspector (she sounded awesome) might have a goal--perhaps to pursue some education in this or that--that would have worked? Did you ask her?

"maybe not even directly work related"
Your words, Jennifer. No offense intended, but what you suggest is exactly what the clueless boss was demanding. Think of something--anything--that's even remotely "improvement" related and make it a goal. Not because improvement is needed, but because there's a blank on the appraisal form for it. The woman in question was happy with what she was doing and predictably felt offended at the suggestion that we had to strain to think of something that needed improvement. And she wasn't "awesome." That's the whole point--she consistently did exactly what was expected. The fact that so many people don't reach that level of performance is a signal that something is seriously wrong with the system. People need processes that work, and a clear understanding of their roles in making them work.
I might have mentioned it here before, but the single best compliment I ever received from someone who worked for me was when I was told, during a performance appraisal, "I like working for you because you let me do my job." People need to be allowed to do their jobs, and be free from micromanagers who believe everything will go to h#ll if they're not constantly managing something, or trying to measure something that can't be measured, or creating useless, irrelevant objectives.

An observation: The thread's original question was Do performance appraisals and systems thinking sit comfortably together? I would say, based upon the thoughts here, and the writings of folks involved with systems thinking that the answer is "no".

Now, we can also gravitate off on a thread of "How do systems thinkers deal with their employee appraisals"? I would say that I have learned the "game" of how to write my own appraisal and goals. However, I have more than ample personal evidence that the decision as to how much of a pay raise you are going to get, or whether or not you are going to be laid off, has nothing to do with the words on the appraisal, or your written goals from the previous year.

I would say that "Branding" (such as every -good- chart that I make has my name in the footer), publishing in open literature and a monthly report that I supply my managers has much more impact than the annual performance appraisal. Last year, I "exceeded expectations" (a great phrase). That meant that my raise was to be twice the average raise (another formula someone came up with). No, I did not turn down the raise :rolleyes:

I gave my input to my team lead. However, a big stink came up that "team leads couldn't do appraisals". I assumed however that he forwarded my input to his manager. Nope. One day before my manager was to do my appraisal, he asked if I had turned in any input. I sent mine to him. The next morning, at the meeting, he again asked if I turned in any input. We went and pulled it out of his email. He then asked if my appraisal was based upon last year's goals. I said "heck no, what goals? I never got a signed copy of last year's appraisal (I had transferred groups) and I had not established "goals". He then said "boy, you sure respect this process". He then asked if he could modify my input (now that's an odd question). Later that day, he sent me the modified final appraisal, and I was rated "exceeds expectations". I later found out that this decision had been made by his boss about two months prior to this.

This year I again "exceeded expectations". And no, I didn't make much progress on the two stated goals from the previous year, and they wanted to keep the appraisals short and so we used a "short form".

Of course, why should I look the "gift horse in the mouth?" :cfingers: No complaints, nope, nope, nope. . .

Welcome among the posters, Keely :bigwave:. You seem to have been around for a while, and I'm very glad to see your first post here. Just look at the great discussion you sparked off. Keep posting :agree1: "But," I said, "sometimes the best help you can give people is to leave them alone and let them do their jobs." Yes... I have rarely heard truer words, and they can be applied in a broader view as well: How often do you have to spend lots of sorely needed energy on fending off "help" from bosses, management, head office, and last but not least customers (see Customer Requiring Environmental and Health and Safety Efforts (http://elsmar.com/Forums/showthread.php?t=7282&highlight=Customer))? Too often by far, imo. Don't get me wrong: Of course we should lend a helping hand to those in need of it, but forcing help on people in no need of it is causing heaps of croc all around the world.

/Claes

IMO, the first quote captures one of the most harmful myths of quality improvement, and the second shows why it's harmful. When we try to quantify things that can't be quantified objectively, fear and loathing are the inevitable results.


JSW05
My apologies, I should have qualified my reference to measuremment and control in the area of personnel. My intent relates strictly to how well one performs their tasks within the designed process. I must say I agree with much that has been stated in this thread, but still cannot get away from the fact that performance be measured.

The fact is that performance is measured and must be. Every process I have written, (and this was stated in another thread), has a responsible office/manager attached to it. Now some person is placed in that position. Therefore that person becomes responsible for that process. If that person is not held accountable (judged, appraised, reviewed or whatever you want to call it) then how can you ensure that the process is going to perform satisfactorally(sp). How many times right nere have we discussed the problem of an employee, supervisor, manager or whoever who is not following procedures, or otherwise not on board and problems are discovered during an audit. That person was just measured within the process (audited) and found wanting. If the management does not do something to correct this deficiency in the process, the entire process will deteriorate further. Now whether it is daily, weekly, yearly or whatever is decided upon in a company, measurement of human performance is done. I believe the question is how to do it in the most beneficial manner.

Maybe I am just cynical, but I have seen too many individuals who are only concerned with doing as little as possible and getting their paycheck.

James

"maybe not even directly work related"
Your words, Jennifer. No offense intended, but what you suggest is exactly what the clueless boss was demanding. Think of something--anything--that's even remotely "improvement" related and make it a goal. Not because improvement is needed, but because there's a blank on the appraisal form for it. The woman in question was happy with what she was doing and predictably felt offended at the suggestion that we had to strain to think of something that needed improvement. And she wasn't "awesome." That's the whole point--she consistently did exactly what was expected. The fact that so many people don't reach that level of performance is a signal that something is seriously wrong with the system. People need processes that work, and a clear understanding of their roles in making them work.
I might have mentioned it here before, but the single best compliment I ever received from someone who worked for me was when I was told, during a performance appraisal, "I like working for you because you let me do my job." People need to be allowed to do their jobs, and be free from micromanagers who believe everything will go to h#ll if they're not constantly managing something, or trying to measure something that can't be measured, or creating useless, irrelevant objectives.
I'm not here to argue with you. I asked questions, making an effort not to second guess (didn't do that well, I suppose) your style or infer there was an opportunity for improvement on your performance as your inspector's manager.

The Wall Street journal has a brief article on this debate, and gives the pros and cons on grading employees. Can ranking employees do more harm than good?

http://www.careerjournal.com/columnists/inthelead/20010516-inthelead.html

Ya'll have covered most of what is in this article.

I just started reading a book on this that seems pretty good, Abolishing Performance Apraisals, Why the backfire and what to do instead. by Tom Coens and Mary Jenkins.

http://www.amazon.com/gp/reader/1576752003/ref=sib_dp_pt/102-8036829-2972124#reader-link

JSW05
My apologies, I should have qualified my reference to measuremment and control in the area of personnel. My intent relates strictly to how well one performs their tasks within the designed process. I must say I agree with much that has been stated in this thread, but still cannot get away from the fact that performance be measured.

The fact is that performance is measured and must be. Every process I have written, (and this was stated in another thread), has a responsible office/manager attached to it. Now some person is placed in that position. Therefore that person becomes responsible for that process. If that person is not held accountable (judged, appraised, reviewed or whatever you want to call it) then how can you ensure that the process is going to perform satisfactorally(sp). How many times right nere have we discussed the problem of an employee, supervisor, manager or whoever who is not following procedures, or otherwise not on board and problems are discovered during an audit. That person was just measured within the process (audited) and found wanting. If the management does not do something to correct this deficiency in the process, the entire process will deteriorate further. Now whether it is daily, weekly, yearly or whatever is decided upon in a company, measurement of human performance is done. I believe the question is how to do it in the most beneficial manner.

Maybe I am just cynical, but I have seen too many individuals who are only concerned with doing as little as possible and getting their paycheck.

James

James,

I think I agree with you, but what you are describing as "measurement" is what I would call "verification." "Measurement" connotes the ability to discern degrees of compliance while "verification" might be as simple as checking a binary condition--whether something is on or or off, true or not true, etc. The latter is certainly possible and necessary in manufacturing processes; if George is responsible for insuring that x takes place, we should be able to verify whether x took place or not. Note that the extent of George's culpability is still a potential problem, but we can at least verify the outcome if it's reasonably defined.

The danger comes in when we try to say that George's performance in achieving production goal x was y% better than Sally's, but not nearly as good as Sam's, even though Sam works in Accounts Payable and has never spent more that 5 minutes at a time on the production floor.

James,

I think I agree with you, but what you are describing as "measurement" is what I would call "verification." "Measurement" connotes the ability to discern degrees of compliance while "verification" might be as simple as checking a binary condition--whether something is on or or off, true or not true, etc. The latter is certainly possible and necessary in manufacturing processes; if George is responsible for insuring that x takes place, we should be able to verify whether x took place or not. Note that the extent of George's culpability is still a potential problem, but we can at least verify the outcome if it's reasonably defined.

The danger comes in when we try to say that George's performance in achieving production goal x was y% better than Sally's, but not nearly as good as Sam's, even though Sam works in Accounts Payable and has never spent more that 5 minutes at a time on the production floor. :applause:

"There in lies the rub." After reviewing the article posted, I see where the concern is. I would never advocate the kind of ranking system described in the Wall Street article. That is not evaluation, that is just plain competition within the organization and pits everyone against everyone.

I think we can absolutely agree that performance evaluations are necessary, but lets to keep them fair and simple and non-threatening.

James :agree:

:applause:

"There in lies the rub." After reviewing the article posted, I see where the concern is. I would never advocate the kind of ranking system described in the Wall Street article. That is not evaluation, that is just plain competition within the organization and pits everyone against everyone.

I think we can absolutely agree that performance evaluations are necessary, but lets to keep them fair and simple and non-threatening.

James :agree:
I guess my continual disagreement with "performance evaluations" is the persistence of managers to attach a ranking to them.

An analogy would be to attach a ranking system to ISO Registration. That way we would have the benefit of the subjective opinion of some third party auditor that company A is better than company B and we should cease doing business with company B, in the same manner managers routinely dismiss the lowest ranking employees after a "performance evaluation." I'm sure a lot of screams would be heard that auditors were "unfair" in their evaluations.

There might even be allegations of favoritism and bribery to move one company up in the rankings, or conversely, to move one down in the rankings. I could even envision a scenario where an auditor could short an auditee's stock and then give it an arbitrary bad ranking to make a killing on the stock market when the auditee's stock takes a dive (similar to a pharmaceutical company tanking after a bad FDA ruling on a new drug.)

If we MUST have any "performance evaluation" - let it be strictly pass/fail, an attribute measurement versus a ranking measurement.

I couple of things to ponder in this area of performance appraisals and systems thinking.

It is hard to perform if you are given ineffective tools. Are the process and tools provided to the employees effective, adequate, suitable? How do you know?

Also, I like the following example of apprasiing systems Vs. individuals. It might be flawed thinking. But I hope it provides an opportunity to think about evaluating individuals.

We generally evaluate our immune systems as a whole. Generally we do not evaluate individual white blood cells unless there is a specail cuase for doing so. We are concerned about the effectiveness of our entire immune system and evaluate it that way. We do not sub-optimize pieces of it by appraising them individually. We look at the effectivenss of the entire system.

One last thing. What are the employees be appraised to? The goals and objectives of the organization as set forth by management? Or individual goals as set by a single manager? What is the goal of the organization? What should be the goals of individuals working within that organization?

Regards, Dirk

I guess my continual disagreement with "performance evaluations" is the persistence of managers to attach a ranking to them.....

If we MUST have any "performance evaluation" - let it be strictly pass/fail, an attribute measurement versus a ranking measurement.


Pass fail is the way to go in my opinion as well. I detest the concept of ranking employees within the company as part of some periodic evaluation. It can breed only the worst kind of culture. It sounds like an old tribal system where you move up by assassination.
The only time "ranking" can be justified in my opinion is when promoting from within is being considered. Then the managers involved would need to discuss who would be the best candidate for the job.

Lets keep it simple and keep it fair.

James

Lets keep it simple and keep it fair.

James

Simple and fair may still be destructive. You are trying to solve one equation with two unknowns:

Output of worker + Interrelation between worker and system = performance

(attribute to Dr. Deming this equation).

In my opinion, performance evaluations and systems thinking could mesh very well if companies would stop trying to assign number values to things that can’t be measured. I’ve always hated performance evaluations where my communication skills were assigned a number from 1 to 5. The numbering system is arbitrary at best – what exactly does a 4 mean? Every time I saw the performance evaluation form at my old job, I wanted to start communicating using a 1 to 5 scale. “How likely are we to miss today’s shipment?” “On a scale of one to five, I’d say a 3.” “Is the radial riveter fixed?” “Oh, I’d say it’s about a 4.”

Fine, you’ve given me a score for my communication skills. Now WHAT EXACTLY DOES THAT MEAN!?

On the other hand, I do want a performance evaluation, and actually wish I could get one quarterly instead of yearly. It’s easy to lose track of your progress and goals if you don’t stop to look at them every now and again, and I want to know what my superiors think of my work. I feel like I can contribute better to the system if I am periodically reminded where my strong and weak points are.

I think the key here is that people want and need to know how they are doing (or how their boss perceives of it), but some insightful comments are infinitely preferable to an arbitrary “scoring system.”

A couple random thoughts on a busy day...

Formal performance appraisals poorly done can do more damage than not doing them at all. Most places I've worked required them in one form or another. My personal policy was to let the employee appraise themselves and compare it to my appraisal; I always did them on-time; I took notes throughout the time period the appraisal was covering so I had a fair analysis; and I let the employees under me anonymously appraise me and I reported on the results and acted on them.

Anyone with workers under them who says they do not do performance appraisals is, IMO, lying or mistaken. It may be informal, but you do them. Even the Mom and Pop place with 3 employees probably sees Mom and/or Pop deciding on a regular basis if their 3 employees are getting the job done well, poorly, excellently, etc. and doing something to act on that answer. If you have someone working for you who is doing a poor job, great job, whatever -- how would you ever come to that conclusion if you did not appriase their performance? What you do with that information is another matter entirely. But is it always "destructive"? No, of course not, IMO. It ain't always the system, folks, and that leaves what?

Here I go again disagreeing with a world-famous guru and legions of followers. (Ducking for cover)

Here I go again disagreeing with a world-famous guru and legions of followers. (Ducking for cover)
Actually, no need to duck for cover. The gurus agree that workers need feedback. They need much more realtime feedback that annually, so you hit the nail on the head saying you wanted to go more frequent.

The key is that an annual classification and/or ranking doesn't accomplish much. And it has been said the annual performance appraisal tries to do too much at once (I believe in The Team Handbook) - firing decisions, pay raise decisions, planning, and worker feedback, and does all poorly.

So it sounds as if the problem is not the idea or the necessity of evaluations, but the methodologies used and what the evaluations are used for.

So - We've been hearing a lot of negative about these systems can anyone supply some positive examples. JMP4429 supplied a nice one. Also I have to say that my company's system is pretty good, and quite informal. Each year the Owner (yes we actually have one on site) sits down with the various supervisors and discusses each of their employees. The owner then sits down with each employee and discusses their performance with them. He then hands out raises based on these discussions and his own observations through the year. We have tried a more formal approach, but mostly I think the owner likes the informal, discussion approach. I for one cannot say I have been dissatisfied with the results.

How about it. Anyone else work where the system is pretty good?

James

I would suggest that a good system would have separate criteria and means for the things that the performance appraisal accomplishes. I think I am actually close to this in my place of work:

I have good interactions with the vice president of my group, and also keep all of the various "thank you" notes I get. I dutifully record all taskings and track them to closure. On a monthly basis I do supply a report of what I have been doing (including 3 charts - the chart of charts, cycle times on special taskings, and attendance at my monthly PI forum class) and what I may need help with. The government project is winding down at Hanford, but it seems like whenever they do a layoff, they reevalute folks each time, rather than keeping the performance appraisal results. And the decision for what to do for pay raises still seems disconnected from the appraisal even though they moved up the appraisal due date by 3 months so it would be done prior to "salary planning". So at least from where I sit, the right things seem to be happening, even if the formal appraisal process is a bit of a joke.

When a company is doing downsizing, performance appraisal is only one factor in deciding who stays. Just like performance appraisals can be biased, so can the decision for layoffs.

Having good "performance" appraisals and receiving above average salary increases can cause your salary to be on the high side of the normal distribution for that job. The approach that a company takes for which employee to hire or keep may not be much different than obtaining a supplier based on price tag alone. Although you may be a good performer, some companies are always willing to bet they can get it done cheaper. It is probably not good systems thinking but it happens.

Performance appraisals also fail in the area of systems thinking since the goals are not really measures of performance but projects and activities that are checked off as completed at the end of a chosen time period. Generally they are individualized rather than team oriented. The goal becomes suboptimization of the individual's work at the expense of the entire system.

Rewarding increases in sales, production, profitability etc. when it is really normal variation is not systems thinking. The measures should be monitored over time and then the exceptional performance as shown by the control chart should be analyzed to determine what caused it. The problem that you encounter is that the improvement may be attributed to more than one cause or involve many individuals. It would be unlikely that one individual was responsible for the improvement but if the analysis does indicate that then the individual should be recognized. On the other side, individuals should not be punished for decreases when they are really normal variation.

The goal of any organization should be to stay in business. Besides the problems associated with annual performance appraisals, annual pay increases are not always consistent with staying in business. Each year, sales fluctuate, new competition occurs, and customer requirements change. None can be correlated with pay increases on a sustained basis. There probably is a need for regularly scheduled raises to keep competitive and prevent employee attrition but that is not related to performance.
Profit sharing based on the overall success of the company is probably more in line with systems thinking. That would result in widely fluctuating incomes which has its own problems.

As much as everyone would like to get above average annual raises forever, the hard truth is that businesses are rapidly changing and it is not always possible to stay in the same business with the same people and the same knowledge. If a company was truly using systems thinking, management would be looking ahead to determine how to prepare and train for the next change. The workers also have an obligation to change.

Bill Pflanz

Great analysis, Bill!
Yes, the manager who persists in individual performance evaluations is also the one most likely to be cold-hearted and ruthless when it comes time to pare the payroll.

The very same mentality that Deming warned about when proscribing buying goods on price alone is likely to carry over in employment decisions.

Rewarding increases in sales, production, profitability etc. when it is really normal variation is not systems thinking.http://elsmar.com/Forums/images/smilies/appl.gif The essence of the problem condensed into a short but very significant statement. Not only is it not systems thinking, it reveals a profound misunderstanding of the nature of variation, and failure to understand variation always leads to waste, fear and loathing. Great post.

So - We've been hearing a lot of negative about these systems can anyone supply some positive examples.

How about it. Anyone else work where the system is pretty good?

James
At a former employer, the way I ran their system worked fairly well, in the opinion of the employees (see earlier post). Was it perfect? No way! Was it pretty good, more positive than negative? Yes. But much of it centered on simple, common-sense principals like the Golden Rule -- a foreign concept to too many managers.

The very same mentality that Deming warned about when proscribing buying goods on price alone is likely to carry over in employment decisions.


Wes can you please elaborate on the above.


In the majority of the companies that I have been involved with performance reviews = increase.(raise) The paper just gets in the way.

We can all sit through HR workshops and be educated about all the other benefits that motivate employees other then money. The health benefits go up every year, vacation days get trimmed and the biggest BS item in this world is profit sharing. In the small to medium manufacturing environment year to year profit sharing hardly ever happens. Also do not forget all the companies out there bailing out on there pension plans…


But the bottom line is….”Show me the Money” and I will stay.

But the bottom line is….”Show me the Money” and I will stay.

You answered your own question about money. Even the employee will leave no matter what their performance, what their pay or how they are treated on an appraisal if the salary and benefits are not fair. Deming suggested leadership rather than money as a way to get people to stay. As everyone works together, the welfare of the company improves and the manager is more free to stay competitive with salaries and to provide more profits for all to share in. When the manager is not a leader, workers will leave when opportunities occur.

Bill Pflanz

When the economy is good and the company is doing well…employees get compensated and everyone is happy.


But when things turn south and there are no raises etc…people leave. It does not matter if its George Patton leading the group or not.

When the economy is good and the company is doing well…employees get compensated and everyone is happy.


But when things turn south and there are no raises etc…people leave. It does not matter if its George Patton leading the group or not.

True. I will say it is not an "all or nothing" proposition for most folks. Money is one factor of many, and the importance of it does vary from person to person.

And, it has been said, money doesn't motivate but lack of money does have a certain motivation.

True. I will say it is not an "all or nothing" proposition for most folks. Money is one factor of many, and the importance of it does vary from person to person.

And, it has been said, money doesn't motivate but lack of money does have a certain motivation.
All else being equal, money can be a significant factor in where one works, but doesn't necessarily have much to do with how happy one is once there. And that "all else being equal" qualifier is loaded in a big way--there are, as Steve suggests, a lot of factors.

The question here is not about how much money is paid, but about how the decisions are made as to who gets how much. Given that there is inevitably a finite amount of money to be doled out for salary increases (if increases are forthcoming at all), if that money is divvied up on the basis of numerical employee ratings, nothing good can come from it.

The very same mentality that Deming warned about when proscribing buying goods on price alone is likely to carry over in employment decisions. Wes can you please elaborate on the above.

In the majority of the companies that I have been involved with performance reviews = increase.(raise) The paper just gets in the way.

We can all sit through HR workshops and be educated about all the other benefits that motivate employees other then money. The health benefits go up every year, vacation days get trimmed and the biggest BS item in this world is profit sharing. In the small to medium manufacturing environment year to year profit sharing hardly ever happens. Also do not forget all the companies out there bailing out on there pension plans…

But the bottom line is….”Show me the Money” and I will stay.
Deming's 4th point:
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.

In my experience, managers and owners who treat EVERY purchase like a reverse auction (going for the lowest price, then demanding the same quality and service as the highest price supplier) are the same ones who make it a firing offense for employees to share salary or benefit details and always try to pay below-market wages and will take advantage of shy employees too timid to ask for a raise by NEVER giving them one.

These are the same folks who practice a type of age discrimination by forcing out high wage senior employees in favor of low wage young employees.

A company with this kind of manager is characterized by low morale and high turnover of employees.

Sometimes (not always), these are the kind of managers who will hire illegal aliens or aliens who need employment to stay in America, then pay them wages far below market, always holding the threat over them to turn them in to the Immigration Service or to terminate them and notify the Immigration service immediately so the clock begins to run on expiring a work visa.

Tough wage times like the current one where white collar workers have been hit hard by layoffs and outsourcing of jobs to low wage countries are tailor-made to bring out the vicious streak in those managers who were previously held in check when employees could readily find other employment.

Sometimes we hear about "golden handcuffs" - in this case, the handcuffs are rusty iron ones.

My Sunday paper had a profile about a guy who got laid off from a $100,000/year job in a corporate buyout. After one year of unemployment, he took a job with Starbucks at $7.50/hour just to get medical benefits. The vicious practice of exploiting desperate employees seems to only get worse with each passing month.

Paternalism, in my opinion, is just as bad as the vicious exploitation. There is an organization in the Chicago suburbs which makes very well-respected products sold world-wide as components in OEM assembled goods. The work atmosphere, though, is stifling to many because the sole owner of this 500 employee company intrudes himself into the personal lives of his employees, playing the good father figure and personal counselor on decisions ranging from marriage to how many children to have, what clothes to buy, who to vote for, what charities to support. The wage range is from average to below average for similar work in the area. There is a core group of about 100 employees who absolutely LOVE this treatment. One of the women employees is 50 years old, worked for this employer since graduating from high school and has NEVER been outside the corporate boundaries of the small town of 25,000 in her entire life (even during school), not even to go to a museum or theater or store in another suburb, let alone make the 30 mile trip to Chicago's museums, stores, etc. There are folks who crave being cocooned. This woman is not retarded. She is smart and alert in every way except this desire to stay cocooned.

It's a sad variety of sado-masochism for an outside observer to witness. The boss loves to control and some of the employees love to be controlled. Alas, the other 400 employees are trapped by circumstance and desperation into working there.

The owner is older than my own folks. One son couldn't take it and fled the business. The other is a milquetoast, nominally with a big title, but a small salary compared to a comparable title at a similar size organization, waiting patiently to inherit, while the father splurges millions to influence local, regional, and state elections to advance his political agenda.

One good thing about the company - they are absolutely passionate about product and service quality. To my knowledge, no customer has ever been dissatisfied to the point of "firing" them over a quality issue.

Deming's 4th point:
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.

Paternalism, in my opinion, is just as bad as the vicious exploitation. There is an organization in the Chicago suburbs which makes very well-respected products sold world-wide as components in OEM assembled goods. The work atmosphere, though, is stifling to many because the sole owner of this 500 employee company intrudes himself into the personal lives of his employees, playing the good father figure and personal counselor on decisions ranging from marriage to how many children to have, what clothes to buy, who to vote for, what charities to support. I was reminded of reading about Henry Ford's management style when building his successful automotive plant. He paid his workers well for the times and gave time off when other employers would not. He also visited his lineworkers' apartments (or sent his supervisors to do same) to ensure they had heat and water, but also to ensure his workers were using their salaries to care for their families and not drinking the money away.

The comments I read regarded this as intrusive, but there is a connecting line between that and the awakening the Navy had when it ceased saying "Your family didn't come in your seabag" and started offering family services and personal financial counseling. The thesis was that family problems intrude on work effectiveness and resources would be profitable if they reduced accidents, alcoholism, divorces, bankruptcies and presenteeism.

I have read that leadership motivates better than money, but in my observation that is only the case when the workers are already being paid equitably (the key word being equitably). I submit if you can't support yourself or your family, you are bound to feel restless and underemployed--I agree that Patton himself couldn't lead people into tranquility in such circumstances.

So, sadly I have never seen performance appraisals that bring value in that their results are one-sided unless they assist to channel employees into greater rewards--surely not too great a thing to ask from this process.

These are the same folks who practice a type of age discrimination by forcing out high wage senior employees in favor of low wage young employees.

A company with this kind of manager is characterized by low morale and high turnover of employees..

It is actually not against the Age Discrimination laws to eliminate a position due to high salary. The courts have ruled that it is not discrimination if the company is doing what is in the best economic interest of the company.

Tough wage times like the current one where white collar workers have been hit hard by layoffs and outsourcing of jobs to low wage countries are tailor-made to bring out the vicious streak in those managers who were previously held in check when employees could readily find other employment.

My Sunday paper had a profile about a guy who got laid off from a $100,000/year job in a corporate buyout. After one year of unemployment, he took a job with Starbucks at $7.50/hour just to get medical benefits. The vicious practice of exploiting desperate employees seems to only get worse with each passing month.

A coworker of mine who I had known for 20+ years lost his job in a corporate merger and ended up committing suicide due to the stress and loss of career. The papers reported that he was on his way to an HR meeting on the job loss when it happened. I also heard a story about a manager who was forced to fire people in a similar circumstance, did what he was told and then went home and committed suicide due to the stress of doing the dirty work of the executives.

Our local paper just had a story today about a vice president with my last employer who was found slain by a trash mound. He had 20 years of service and his wife said that losing his job robbed him of his sense of purpose and sent him into depression. He had not found permanent employment since his job loss 3 years ago. His wife said he went from a life full of promise and achievement to one ending in violence. The implication was that his search for work took him into risky areas.

I wonder how many executives know or care about the consequences of their decisions. Jack Welch did not know how to respond when he was asked if he expected to get into heaven. He still defended the practice of getting rid of the bottom 10% and he said that he was using his wealth for charitable purposes now that he had time.

Bill Pflanz

These latest stories are morphing away from the thread on performance appraisals, but it should be noted that folks really should have a life (and family) outside of work. The folks who "become" their job title really get lost when the job ends, or for that matter, when they retire.

My example is at http://users.owt.com/prevette, although I do admit to putting some statistical applications to "work" in this hobby.

The point about paternalism may be in the eyes of the beholder. Certainly, the woman in my anecdote did not feel oppressed. The eldest son of the owner did. As a customer for a number of years of the company, I visited frequently, both as an auditor and as an engineer/buyer dealing with their managers and engineers.

My observation of the owner's point of view in about 25 or 30 personal visits and two or three times that many phone calls over ten years was that he openly stated his opinion on every and any occasion that HE knew better what people needed than they knew. He was openly derisive of blacks, gays, welfare recipients, single mothers. He was supportive of no-knock searches, anti-abortion legislation, racial profiling, and well-armed local militia. ACLU (American Civil Liberties Union) was a particular target for his scorn.

I guess what irritates me most is that he assumed I agreed with all his views since I was an archetypal WASP. I never responded to any of his tirades except to say something like, "Gee! I'm kind of pressed for time this trip. Could we discuss this another time over a drink or something?" Since his sociological views did not affect his products, I continued to buy from his company. In retrospect, I'm certain he interpreted my silence as agreement rather than stunned astonishment that anyone would express such views in a business setting. I learned too many personal details of some of his employees from him as he would brag how he kept one from "marrying a loser" and made another woman wear long sleeves to hide a flower tattoo. Of the lady with "ink," he said, "You wouldn't believe where else she has tattoos!"

There is a lot of difference between now and the time of George Pullman and Henry Ford and Henry Kaiser who provided a housing and social support structure for employees during a time before medical insurance and housing laws existed. If they built plants out in the suburbs, they built that housing close by to have a reliable pool of workers unhindered by travel constrictions, but they still took away the freedom of choice of where to live.

The armed services may look out for the dependent families of servicemen in some small way, but if the stories in my local papers are to be believed, there are a lot of dependent families suffering economically because a husband or wife is posted to a Middle East post.

One of my cousins is supporting his daughter-in-law and her child while his son is stationed in Afghanistan with his National Guard unit. As least the National Guard isn't telling her to wear long sleeves to hide the tattoo of the heart with her husband's name.

The armed services may look out for the dependent families of servicemen in some small way, but if the stories in my local papers are to be believed, there are a lot of dependent families suffering economically because a husband or wife is posted to a Middle East post.

One of my cousins is supporting his daughter-in-law and her child while his son is stationed in Afghanistan with his National Guard unit. As least the National Guard isn't telling her to wear long sleeves to hide the tattoo of the heart with her husband's name.Very true, and it reminds me of an earlier post where I remarked that well-being is easier to achieve through leadership when basic needs are being met.

Don't get me started on how we have failed that of late in our armed forces (most specifically reservist and National Guard, I have noted)... :blowup: