Ten years ago, I wrote that the performance appraisal treadmill is keeping organizations from testing out and adopting better management models for the networked economy. Performance appraisals are like academic grades and keep the focus on the individual. In a collaborative, social enterprise this is counter-productive. In today’s enterprise, work is learning and learning is the work, and it has to be done cooperatively.
“Evaluation of performance, merit rating, or annual review … The idea of a merit rating is alluring. The sound of the words captivates the imagination: pay for what you get; get what you pay for; motivate people to do their best, for their own good. The effect is exactly the opposite of what the words promise.” —W. Edwards Deming (1982)
Even technology companies are governed by outdated management models.
In addition to the hiring freeze, Zuckerberg [Meta & Facebook] also noted the company was leaving some vacant positions at the company unfilled and “turning up the heat” on performance management to weed out staffers who are unable to meet certain KPIs [key performance indicators].
“Realistically, there are probably a bunch of people at the company who shouldn’t be here,” Zuckerberg said, adding, “Part of my hope by raising expectations and having more aggressive goals, and just kind of turning up the heat a little bit, is that I think some of you might decide that this place isn’t for you, and that self-selection is OK with me”. —Fortune 2022-07-01
As if Deming’s advice from 40 years ago is not enough, we have research in 2022 that shows that the kind of organizational change that Zuckerberg wants to meet his KPIs, cannot be addressed at the individual level. Researchers looked at individual-level [i-frame] versus systemic-level [s-frame] changes in six areas and found that a focus on individuals was ineffective did not change the system — no kidding!
- addiction to prescription drugs
- gun violence
Individual-level insights from the behavioral and brain sciences have a crucial role to play in informing public policy. But much of our field has, with the best of intentions, been led astray by working within the i-frame, developing, testing, and advocating, policy interventions which target individual behavior. We have argued (1) that many critical public policy challenges arise from systemic policies that are actively maintained by the commercial interests that they benefit; (2) those commercial interests actively promote the view that these problems have i-frame solutions, while lobbying against s-frame reform; (3) that many behaviorally oriented academics with an interest in public policy, including ourselves, have inadvertently reinforced the ineffective i-frame perspective; (4) behavioral i-frame interventions have generally had disappointing results, but more importantly can have perverse unintended consequences, such as reducing support for policies solutions that are well known to be effective, and leading individuals to blame themselves for problems with systemic origins.
Even successful business tycoons like Zuckerberg do not have an understanding of (human) work systems. Management needs to focus on the system, not ‘turn up the heat’ on individuals. It’s the system, stupid.