Re: Productivity Measurements

Subject: Re: Productivity Measurements
From: David Orr <dorr -at- ORRNET -dot- COM>
Date: Thu, 3 Dec 1998 10:54:12 -0600

Hooray for Robert Plamondon's comments about "productivity" measurements
being counter-productive when used to judge a writer, particularly when
tied into "merit" pay.

G. Edwards Deming, the quality guru, made this same point, and insisted
it was a matter of principle, not just circumstance or implementation.
He said that individuals work within a certain range of productivity.
"Incentives,' such as merit pay have no impact on this range. People who
work hard and smart work hard and smart regardless of the "incentives.:
People who don't, don't.

Deming said the way to increase productivity is to optimize the system
within which people are working ("a rising tide lifts all boats") so
that everyone's productivity range is lifted by the system. To do this,
management needs accurate information from workers. To get accurate
information management has to drive out fear, which means not penalizing
people for making mistakes and telling the truth about them. A blaming
culture is antithetical to management getting the truth from employees.
"Incentives" also cause distortions of truth as people scramble to play
the system to get raises. Robert's experience is a perfect case study of
these principles in action.

At our organization prior to 1991, we experienced the same rancor,
divisiveness, and game playing experienced by Robert. We had merit pay
and performance evaluations. Since 1991, we simply announce the
percentage of raise for the year in January. Everybody gets the same
percentage. At the end of the year, we look at company performance; if
we have done well, we give a bonus to everyone. Everyone gets exactly
the same bonus amount--Managers, Writers, Secretaries--all the same.

The rancor immediately disappeared when we instituted this system. It
was replaced by a sense of teamwork that improved productivity. By
focusing on improving the system, rather than on getting more out of
people, we increased our productivity by one-third the first year alone.
Now, when we take measurements, it is to judge the system, not people.

David Orr
Orr & Associates


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