16 June 2007

Why Performance Management does not work

I've been following the thread on Deming and Systems Thinking on the IDeA discussion board for over a year now and a recent post included the excellent THE GERM THEORY OF MANAGEMENT by Myron Tribus.

This is a very approachable description of what Systems Thinking is and why it is so hard for most managers to understand. I particularly liked this section as it reinforced my previous view that Performance Management is a destructive exercise.

"If you were the supervisor of these workers, what would you do? How would you go about improving things?

"I have presented this table to audiences across the USA, in Mexico, in Canada, in Australia, in the UK and I always get about the same reaction. People suggest a good talk with Eva. They propose putting Eva alongside Mary or asking Mary to help her. They propose to fire Eva. They propose to give Eva more training.

"One astute statistician at a meeting of the Royal Statistical Society in London even went so far as to observe that there was a 30 day periodicity in Eva's output and that might have something to do with things.

"After the audience suggests different cures based on the common wisdom, I explain to them that the numbers in the tables were actually generated by the random number generator in my computer. The flaws were generated and assigned to memory cells, to which I attached people's names. In other words, the faults were generated entirely by the system.

"In only two or three instances, out of thousands of people, did anyone suggest that perhaps the problem was in the system itself - that the system had been infected with the virus of variability and it was not the fault of the workers.

"In the last four years, only three people have suggested that we analyze the data in the table to see if we could compute whether Eva's results should be expected in the light of the variability exhibited by the system."

To try and simplify that as simply as possible, in order to understand the performance of a component (e.g. a person) in a system then you first need to understand the variation in the inputs.

A worst-case example is setting performance targets for dealing with that most variable of inputs, people. That is why it is impossible for Performance Management to work for jobs like teaching and social work.

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