---------------------- Information from the mail header
----------------------- Sender: Human Resource Development
Group List <HRD-L@MIZZOU1.BITNET> Poster: William S
Guentner <wg2h+@ANDREW.CMU.EDU>
Subject: PAY FOR PERFORMANCE
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Reply:
Bill makes a very complete and convincing argument that
"conventional" performance appraisal and linkage to pay or
bonuses has some bad effects, as did Dr. Deming. Anyone who
has been a supervisor can confirm some of these effects. Not all
the effects are on the person being appraised; supervisors don't
like the process either.
You can hear a "however" coming. If we take away any appraisal
process, how do we determine pay? How do we decide who to fire
or promote? Deming's recommendations were along the lines of
using longevity and skills development as pay determinants. How
does the organization determine what someone's skills are without
doing some kind of performance appraisal? Just because
someone has taken training doesn't mean he/she can use it.
Also, anyone who has been a line supervisor can tell you that there
is a real difference between "star" performers and "poor"
performers. Stars will find a way to get something done in spite of
"system" problems. Poor performers will find a "system" excuse
for not doing something. Having said that, I agree that it is usually
more productive to work on improving the system than placing
blame, since most people are in the middle and will try to use the
system effectively.
I participated in a process improvement team that struggled with
these issues for a government organization. We eventually came
up with a "hybrid" system for our organization that allows for a
transition between the conventional system that we had been
using and a new group and customer oriented system. The new
appraisal and reward system has three components and allows
management to "tweak" the relative emphasis on the components
(by adjusting the relative amounts of money available for each
component) as the culture changes.
The individual performance component is retained, but modified by
using a 360 degree survey for all staff, including customer input.
The group component is managed by a cross-functional team, and
we expect it to grow in importance. The third component is
gainsharing.
We have just begun using the group awards, and will begin the 360
surveys this year. We haven't decided exactly how to do
gainsharing yet- that will be the last component.
This doesn't specifically address the issue of how to decide on
promotions, firings, etc. However, we expect the 360 degree survey
to be useful as inputs for such decisions.
Larry Headley
lheadl@metc.doe.gov