Posted by: Knightbird | July 19, 2010

Eliminating Performance Evaluations at Chugachmiut

Dr. Deming’s business philosophy permeates Lean Management, and it is surprising more Executives are not familiar with it. I first became aware of his philosophy as a Professor of Public Administration and Law Science at the University of Alaska Southeast. His 12th of 14 points is quoted below.

12. Permit pride of workmanship

Remove the barriers that rob hourly workers, and people in management, of their right to pride of workmanship. This implies, among other things, abolition of the annual merit rating (appraisal of performance) and of Management by Objective. Again, the responsibility of managers, supervisors, foremen must be changed from sheer numbers to quality.

On July 16th I wrote about baseball as a game of failure and how in my view the workplace is the same type of environment. We inevitably fail at something, and when we fail, this means that there is plenty of blame for us to allocate to individual employees (where it almost certainly doesn’t belong). Allocating blame is a very humiliating experience, for both the person being blamed and for the one doing the blaming. That is what I believe a performance evaluation does, allocate blame.

Chugachmiut’s board made a very wise decision when, in my second year here, they allowed us to eliminate our policy requiring performance evaluations. And believe me, there was no rush of employees asking for it to be reinstated. I did have a few employees ask what would we rely on for basing raises and promotions. The answer is easy for me. We promote people based on their ability to support a Lean workplace, and raises are based on performance evaluated daily. Because of how we manage the workplace, defects are surfaced and improvements made by employees who work in the Value Stream where the defect occurs.

Transparency is an important tool to use when trying to develop a workplace dedicated to quality. Process control boards that note improvement events and defects discovered are key to helping an employee self evaluate daily. When our Value Streams are mapped, and our work flows, defects surface quickly. When our employees respond to make improvements based on knowledge of the defect, we all benefit. Hiding defects, which is common in a blame and shame workplace, cannot be tolerated. Our evaluation is the presence of quality work, day in and day out, and a quick response to defective work.

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