W. Edwards Deming, regarded as the father of the Total Quality movement (and also known as the consultant who saved Japanese industry post-WWII) was highly critical of performance appraisals and performance bonuses. He once said:
In practice, annual ratings are a disease, annihilating long-term planning, demorilizing teamwork, [and] nourishing rivalry and politics.
In most organisations, the unintended causality of the performance scheme is collaboration. Even teamwork incentives have the ramification of pitting team and against team. Despite the now ancient (1950s – 80s) wisdom of the likes of Deming and his motivational psychologist counterpart Herzberg, most corporate HR and OD departments are unwilling to implement decent performance support systems in place of their clearly failing appraisal and reward processes.
There’s been much support for Deming since his initial foray into the area of people management. And event though contemporary motivational science confirms that the most sustainable motives are the opportunity to belong and the opportunity to do a good job, too many organistions are blindly following the bureaucraticly elegant, yet deeply flawed logic of the carrot and the stick.
What evidence do employers need before they abandon outmoded and flawed performance schemes?
Far better to redirecting some of that energy into mentoring and helping people to do a good job. After all, that’s really what most people want to be able to do.
For more on Deming visit this Youtube series of clips http://www.youtube.com/watch?v=GHvnIm9UEoQ
Readers interested in this topic may also find these Herzberg clips interesting http://www.youtube.com/watch?v=o87s-2YtG4Y