Ben
I have some questions regarding your response in LO16647. I will say up
front I lean toward not using peer ranking systems, but I am frustrated
with the lack of a clear consensus on this and I can't explain myself in a
simple, convincing way why peer ranking is a less effective means for
businesses. I am sure we all reflect our past experiences in our own
opinions. Wouldn't it be great if all the assumptions on both sides of
this great debate could be surfaced and examined, and a clear set of
principles come out of the process to resolve this once and for all.
Perhaps they will be debating this forever because the answer is different
for different situations.
You said -
I would say, there are a number of significant differences between the
components of an automobile and employees. The foremost difference being
volition. An employ can increase or decrease their performance on their
own, without any external influence or power. My automobile cannot do
either without me pressing the accelerater.
I recall Deming's comment that performance within the limits of the
system is random and should not be ranked. Your comment above seems to
conflict with Deming. What is your response to Deming's opinion ? Are
you aware of his assumptions behind his opinions on employee rating
systems ? If you are not, perhaps it would serve you to explore his
assumptions and compare them to yours. (I don't have the info to
summarize them here, perhaps others can if you are not aware of them).
You said -
The reason for ranking employees is to 1) determine the value of each
employee, 2) create competition between employees.
Would not the salary level reflect the employees' value to the company
? Why do we insist on using yearly increases to attempt to distinguish
the value between employees ? Are we saying the career salary grade
structures (and their movement upward over time based on performance)
are not doing the job ? Why is it necessary to create competition
between employees when we want teamwork between employees ? How do you
reconcile the two when they seem in conflict with each other ? (perhaps
my mental model is flawed here). Here's an exaggeration to perhaps
demonstrate a point - instead of distributing merits annually based on
peer competition, let's divide the annual amount in to 52 pieces and
have weekly competitions for and distribtuions of the carrot. The only
difference between the two is the time period - the assumptions behind
the process are the same.
You said -
Rewarding people based on subjective criteria increases the risk that a
business will behave in unethical ways (I define unethical, in this
context, as rewarding someone for something they have not done).
What objective criteria is used to fairly separate a hundred people into
a hundred increments of performance ? What is the definition of "fair"
and in who's minds is it "fair" ?
You said -
Furthermore, if employees aren't ranked how are they to know if they
need to improve their skills or increase their knowledge so they can
become more valuable to the company?
I think that is easy to do, unless I am missing something here. And if
you think I am, I do want to learn what it is. I participated on a team
to address the problems with our performance appraisal system. The
system combined the discussion on the employee's performance rating
(based on whether he/she "met" or "exceeded" the manager's
"expectations") with the development discussion. Two problems with the
system were 1) the "met" or "exceeded" rating had to meet a bell curve,
so the manager had to really tap dance around that part of the
discussion and get back with the employee once all the "potential"
ratings were merged and finalized, and 2) since the outcome of the
discussion was a rating that affected pay, NO employee was interested in
admitting ANY weaknesses if they wanted to get a good rating. Our team
split the two outcomes into two different processes. The development
process combines 360 feedback with a final "three strongest" and three
weakest" competencies. No ranking, and no input of the discussion
outcome in to the merit process. So I suggest you can provide feedback
for development without a ranking process. Why is it you feel the
ranking process must be tied to their development. Is the assumption
they not develop unless money is a direct part of the equation ?
You said-
Most people respond to competition. In the face of competition a person
is faced with two choices: Compete as hard as you can, or get off the
playing field. That is the whole premise of a business: Compete with
other businesses, and if you can no longer compete find another business
to go into. Why should the same principle not apply to employees? As
employees compete for the value they give their employer the business as
a whole increases its' competitiveness. What better way to encourage
learning than to have people compete with one another based on their
knowledge and skill?
I still struggle with my perceived conflict between peer competition and
teamwork. I would be interested in hearing from a company such as
Saturn or HP that seems to have a large emphasis on teamwork (my
perception) without an emphasis on peer competition.
Perhaps the only way to reconcile this is for those clearly on the
competition side to discuss their experiences, assumptions, and mental
models with some folks in Saturn and HP and others who have experienced
a culture of teamwork without the peer competition.
And perhaps LO members could use the ladder of inference and examine
their assumptions behind why one or the other works.
-- Geof Fountain tfyy93a@prodigy.comLearning-org -- Hosted by Rick Karash <rkarash@karash.com> Public Dialog on Learning Organizations -- <http://www.learning-org.com>