Deming was right, again

Surprise.

You may recall that he did not like programs like “employee of the month” for a couple of reasons. If they truly recognized superior performance, then your small group of superior performers would win every month. And if you ensured that “everybody had a fair chance” at winning, then you’re rewarding poor performance.

New research at Washington University in St. Louis confirms this, and adds another point: employees will game the system to give themselves the best chances of winning. So you end up rewarding those who are good at winning contests, not necessarily those who contribute to achieving the organization’s objectives:

  • “The researchers show that two types of unintended consequences limit gains from the reward program. First, employees game the program, improving timeliness only when eligible for the award, and strategically calling in sick to retain eligibility.
  • “Second, employees with perfect pre-program attendance or high productivity suffered a 6 percent to 8 percent productivity decrease after program introduction, suggesting that awards for good behavior they already exhibited de-motivated them.”

Note that “timeliness” is a performance metric and like all such metrics is susceptible to gaming.

What the second bullet indicates is that programs like this destroy Einheit.

One thought on “Deming was right, again

  1. I only have two bullets.

    The first one is: a capitalistic system has only one implicit rule-set (maximise profits) that enables fast transits, and because of this has no Einheit to subvert. Einheit is only present when management is actually in the room.

    Second, without Einheit, it is better for employees to understand the advantage, or lack of advantage, one has in the environment observed.

    “Employee of the month” is a marker that identifies possible non-transparent actors or actions to fellow employees.

    “Employee of the Month” is especially helpful in identifying 5GW warriors for not so “gifted” employees that take things literally.

    “Employee of the month” gives employees an accurate observation of the environment they orient themselves to, when Einheit is not present.

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