Dr. Deming Called for the Elimination of The Annual Performance Appraisal

Guest post by John Hunter, founder of the CuriousCat.com.

In Out of the Crisis, page 101, Dr. Deming states the following as one of the seven deadly diseases:

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.

Dr. Deming understood the appeal of evaluation of performance. He just judged what actually went on in the world and saw that the appeal was not matched by success in practice. Dr. Deming understood the importance of subjecting theories to evaluation within the system to those theories that were being applied to adopt practices. The most common way of testing beliefs was to use the PDSA cycle to experiment and determine if beliefs were confirmed.

In the introduction to the Team Handbook, Dr. Deming wrote:

The fact is that the system that people work in and the interaction with people may account for 90 or 95 percent of performance.

In such a situation, you then would have to measure most importantly the interaction with others and the system to evaluate someone. Most often there is either no importance placed on interactions, or there is a very minor (especially compared to the importance) placed on interactions.

From page 296 of the Leader’s Handbook:

Someone in the audience asked Dr. Deming: “if we eliminate performance appraisals, as you suggest, what do we do instead?” Dr. Deming’s reply: “Whatever Peter Scholtes says.”

In Total Quality or Performance Appraisal: Choose One, Peter Scholtes says:

Improvement efforts should focus on systems, processes, and methods, not on individual workers. Those efforts that focus on improving the attentiveness, carefulness, speed, etc., of individual workers — without changing the systems, processes, and methods — constitute a low-yield strategy with negligible short-term results

Conventional problem-solving would ask such questions as: Whose area is this? Who is supposed to replace worn gaskets? We don’t ask “why,” we ask “who.” We don’t look for causes in the system, we look for culprits in the work force. Performance appraisal is a “who-based” approach to problem-solving.

This topic is often one people have trouble accepting at first. And it is one many people have strong opinions about. Please share your comments below.

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