Managing Performance

Management gets rewarded for delivering results, and those (employees) who perform in their work get results. Hence (quite understandably) management must identify and embrace performers.  The more performers there are the better (and easier) it is, especially for management.

 

Accordingly those who have been categorized as ‘a performer’—those who are above average—are often held up as exemplars: They are models of success, the standard bearers of what hard work and dedication to the job, to the organization and the economy can mean for each individual.

 

Who wouldn’t want to be labeled a performer? What manager, what organization wouldn’t want all to be above average? Clearly we must all aspire to be above average. If only every individual would just pick him or herself up by his or her own bootstraps!

 

It goes without saying that those who haven’t attained this level of performance and/or label, those below average people, are viewed as less dedicated to working hard and getting it done—they are simply of less worth. Accordingly, the general assumption is below average people are just worthless!

 

They’re everywhere

In almost every organization there are performers and non-performers—we all know who these people are. You know the non-performers are the low acheivers, the ones not dedicated not committed to doing whatever it takes to get it done. These people are the ones who managers and performers alike see as a drag upon everyone else—slackers—who adversely affect the company’s performance. Furthermore, extending the argument beyond just the organization these people are a drain on the economy as well.

 

Accordingly we (and managers especially) can’t allow these people to continue to constrain us all. Hence nonperformers are often ostracized (perhaps even bullied in the workplace) and then yanked upon ranking of the results of the annual performance process—we can thank Jack Welch for popularizing this rank and yank practice. I suspect many feel that if only we managed society as a business then there’d be a way to yank these slackers from society!

 

They’re interdependent

But the fact that performers and non-performers can be found in most if not all organizations is not surprising since they actually depend on each other. Not only is it the nature of dichotomous categorizations—you can’t have an up without the possibility of a down—it is an unavoidable distributional characteristic of a system and thus a statistical fact! In any given system (i.e. a collective of people) about half will be above average and about half will be below average since the average is a measure of central tendency—this is a basic statistical fact not a theory. In other words, you can’t have people who are above average without (at the same time) having people who are below average.

 

So what are we to conclude? First management practice that rates, ranks and even yanks people is absolutely unsupportable, wrong and inhumane. Second the above average performers owe a great deal to the below average non-performers. Why? Because without them their’ above average classification would not be possible. In fact their same efforts in a different system could very well fall below average! Yep you can’t be above or below average on your own!

 

The point is that it is wrong to relate to those above average as if they are different than those below average since they are all representative of the capability of the system. Yes folks, chance plays a greater role in how one is categorized/labeled within a system at any given time than most care to understand or even admit.

 

Unfortunately for those being managed most in management prefer to place attention on individual behavior rather than toward understanding and improving the system and its capability. If only they’d see the wisdom in attending to improving the system as the means of realizing better performance for everyone!

 

Target Setting

Those in management have yet another bright idea to avoid both the properties of central tendency and attending to the system. The solution is to set a target performance level, legislate a performance policy requiring every individual to perform at or above it. Hold every individual accountable for attaining this performance level—not allowing variation period! That will do it!

 

Okay while this doesn’t involve a measure of central tendency it still chooses a point in the distribution of performance values as a way of inciting action and as the basis of categorizing people in a dichotomous fashion for the purpose of judging individual performance. It still categorizes individuals as performers or non-performers while ignoring the inherent and inevitable variation and distributional characteristics of a system.

 

So what’s the usual basis for setting the target? It’s an arbitrary target set by management. I don’t mean to imply that an arbitrary setting of a target is haphazard (like blindly throwing darts upon a wall) but it is quite arbitrary in that it doesn’t come from an understanding of the system’s capability but rather it comes from the whim of management.

 

Clearly a way to have everyone beat the target is to set the target below the minimum value in the distribution of measured performance. But setting a target that everyone achieves without doing much of anything doesn’t really get people working hard. Consequently management wanting to maximize results chooses a target value at the higher end of the range in the distribution; obviously thinking that this will encourage (i.e. incite and control for) better performance from each individual. Some even amp up this misguided practice by choosing a value just a little less than the maximum possible value—no room for anything other than perfection in this scheme. I suppose the rationale is that if you are going to incite others you might as well incite them to be just about perfect. Again there’s no consideration for the inherent variation of the system.

 

Effect of Misguided Practice

Just because a person turns down an alley and out of sight doesn’t mean he or she has ceased to exist. Similarly, just because management practice doesn’t acknowledge and understand variation doesn’t mean that system variation doesn’t exist and influence actual performance—both individual and organizational.

 

Because variation is inevitable—a fact of life—it can’t be just legislated away through a performance policy, however it can be concealed. Even though most managers like to have everyone meet or exceed the target, it is not possible without deceit. That is to say, it is not possible for even most to perform at this arbitrarily set high level without cooking the books (i.e. fudging the numbers or rigging the system in their favor). More to the point, with attention still on individual behavior and not the system and its capability, practices such as this one encourages individuals to do whatever they can to attain the set target level. What this encourages is at best redefining the aim of one’s work (from doing good work to looking good at work not matter the harm to others and the system) and at worst outright unethical behavior. The work we do ceases to be important while the measures we are judged by become all-important! So management gets the results they expect from most, but these results have little relevance to actual (real) performance.

 

A recent example of this quite predictable phenomenon can be seen in the falsifying of VA records to cover up treatment delays in the VA Hospital system wherein the performance policy was the setting of a 30-day wait time target for all facilities. This is not a political issue but pure and simple the result of managing without guidance from statistical and systems thinking—managing without knowledge.

 

There’s No Substitute for Knowing

Yep, these schemes are reflective of management’s ignorance of systems and their statistical variability that inevitably leads to (management) tampering and making things worse. Channeling Deming, how could they (possibly) know! Statistical and systems thinking are not commonly taught in business school, or any other school for that matter!

 

What should management do? First learn about the theory of variation, the nature of systems and the nature of humankind, and then practice statistical and systems thinking in creating a system of management (based on care and not fear) that fosters or enables both the development of people and learning toward improving processes, not accountability for meeting arbitrary targets.

 

The more management continues as they have focusing attention on results the further away the entire system moves from being capable of actually producing results beneficial to everyone.

 

By mismanaging performance the results one gets are illusory and so too is the confidence (that one is in control) that comes with them.

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