Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 19, Issue 42;   October 16, 2019: Performance Mismanagement Systems: II

Performance Mismanagement Systems: II

by

One of the more counter-effective strategies incorporated into performance management systems is the enterprise-wide uniform quota, known as a vitality curve. Its fundamental injustice breeds cynicism, performance fraud, and toxic conflict. It produces performance assessments that are unrelated to enterprise objectives.
The 20-70-10 rule, graphically

The 20-70-10 rule, graphically. The main problem with this scheme for appraising performance is that it doesn't actually appraise performance. It does categorize people, but that isn't what the enterprise really needs. The enterprise needs performance appraisal — of the enterprise.

We continue with our exploration of some of the foundational misconceptions underlying performance appraisal as it's widely practiced. last time we sketched how a rhetorical fallacy known as the fallacy of composition, which lies at the heart of performance appraisal strategy, prevents performance management systems from attaining their stated goals. We also examined the reification error, and what I called the "myth of identifiable contributions" and the "myth of omniscient supervision."

Let's now take a look at the effects of uniform quotas. In some organizations, as part of the annual review process, supervisors receive quotas for each grade of performance appraisal — a so-called "vitality curve." For example, one quota system, known as the 20-70-10 rule, recommends quotas of 20% for Exceeds Expectations, 70% for Meets Expectations, and 10% for Needs Improvement. When a rule such as this is applied uniformly to all organizational units, madness results.

The problems with uniform quotas are many. Here are just four of them.

The heterogeneity of capability
Typically, there is little uniformity of capability across all organizational units. Most units have a mix of people performing at various levels, but some units consist almost exclusively of top performers, while others consist almost exclusively of mediocre performers. The system of uniform quotas compels a supervisor of mostly top performers to rate 10% of his or her supervisees as "Needs Improvement." And the system also compels a supervisor of mostly mediocre performers to rate 20% of them as "Exceeds Expectations."
Because of the quota, someone who is a top performer relative to the entire organization might be rated as "Needs Improvement" relative to the group of which he or she is a member. And a performer who is actually in the "Meets Expectations" group relative to the entire organization might be rated as "Exceeds Expectations" relative to the group of which he or she is a member.
Consequently, in some cases, relative to the organization as a whole, a top performer might be rated lower than a mediocre performer. The obvious injustice of this result can contribute to cynicism, toxic conflict, and elevated voluntary termination rates.
The heterogeneity of the need for capability
Most enterprises don't need top performers in every role. To recruit and retain top performers when they aren't needed constitutes a waste of enterprise resources. Moreover, top performers need challenges and opportunities to demonstrate creativity. In some roles in some organizations, those desires are positively unhelpful. In some roles, the enterprise needs only reliable, routine levels of performance.
Despite this, uniform application of the 20-70-10 rule, for example, assumes implicitly that it is desirable to have 20% of the people in each and every unit assessed as top performers. For many roles, this assumption is in contradiction to enterprise needs.
Serial attrition of talent
Some units perform work for which there is only a limited pool of capable potential hires. Because of the quota system, when the organization mis-appraises top performers as "Meets Expectations," or worse, those affected might voluntarily terminate if they believe they are being treated unfairly. They do so because the elevated demand for people with their skills means they can readily find alternative employment.
In this way, uniform quotas applied year after year eventually deplete any units that depend on people with rare and marketable skills and talent.
A zero-sum game
Finally, quota systems tend to create environments favorable to demoralization and inter-employee conflict, mainly because they create a zero-sum game. A zero-sum game is a mathematical construct that describes group processes in which the group members are pitted against each other. The total of gains of value summed across all participants is always equal to the total of losses of value summed across them.
For example, if you're working in a group in which you have a clear sense of who the favored 20% are, and you know you won't be among them, why would you go to great lengths to deliver excellent performance? Indeed, why would you even stay in that position? And inversely, if you were certain that you were among the favored 20%, why would you deliver excellent performance? After all, you know that your supervisor needs to report not less than 20% of his or her supervisees as Exceeds Expectations. Moreover, if you aren't among the favored 20%, and if you try to gain a place among the favored 20%, and they learn of your intentions, they might be motivated to try to prevent you from succeeding. The whole mess is just a nightmare for teamwork.

These phenomena can lead to exits by the most capable people, because they're the people who are most likely able and motivated to find alternative employment.  Performance Mismanagement Systems: I First issue in this series  Go to top Top  Next issue: Power Distance and Teams  Next Issue

303 Secrets of Workplace PoliticsIs every other day a tense, anxious, angry misery as you watch people around you, who couldn't even think their way through a game of Jacks, win at workplace politics and steal the credit and glory for just about everyone's best work including yours? Read 303 Secrets of Workplace Politics, filled with tips and techniques for succeeding in workplace politics. More info

Your comments are welcome

Would you like to see your comments posted here? rbrenfHlRlTgqCIXkUHBTner@ChacrEuHRQPYVKkOucGfoCanyon.comSend me your comments by email, or by Web form.

About Point Lookout

This article in its entirety was written by a 
          human being. No machine intelligence was involved in any way.Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

This article in its entirety was written by a human being. No machine intelligence was involved in any way.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Critical Thinking at Work:

A sunsetThink in Living Color
Feeling trapped, with no clear way out, often leads to anger. One way to defuse your anger is to notice false traps, particularly the false dichotomy. When you notice that you're the target of a false dichotomy, you can control your anger more easily — and then the trap often disappears.
The Leonard P. Zakim Bunker Hill BridgeTen Reasons Why You Don't Always Get What You Measure: III
The phrase "You get what you measure," has acquired the status of "truism." Yet many measurement-based initiatives have produced disappointing results. Here's Part III of an examination of the idea — a look at management's role in these surprises.
Arrival of Cortés in Vera CruzWacky Words of Wisdom: II
Words of wisdom are so often helpful that many of them have solidified into easily remembered capsules. And that's where the trouble begins. We remember them too easily and we apply them too liberally. Here's Part II of a collection of often-misapplied words of wisdom.
Donald Trump (left) and Hillary Clinton (right), candidates for U.S. President in 2016The Paradox of Carefully Chosen Words
When we take special care in choosing our words, so as to avoid creating misimpressions, something strange often happens: we create a misimpression of ignorance or deceitfulness. Why does this happen?
A dictionaryDisjoint Concept Vocabularies
In disputes or in problem-solving sessions, when we can't come to agreement, we often attribute the difficulty to miscommunication, histories of disagreements, hidden agendas, or "personality clashes." Sometimes the cause is much simpler. Sometimes the concept vocabularies of the parties have too little in common.

See also Critical Thinking at Work and Critical Thinking at Work for more related articles.

Forthcoming issues of Point Lookout

Someone got the wrong information about which sneakers to wear on which feetComing April 30: On Planning in Plan-Hostile Environments: II
When we finally execute plans, we encounter obstacles. So we find workarounds or adjust the plans. But there are times when nothing we try gets us back on track. When this happens for nearly every plan, we might be working in a plan-hostile environment. Available here and by RSS on April 30.
A dramatization of a mobbing incidentAnd on May 7: Subject Matter Bullying
Most workplace bullying tactics have analogs in the schoolyard — isolation, physical attacks, name-calling, and rumor-mongering are common examples. Subject matter bullying might be an exception, because it requires expertise in a sophisticated knowledge domain. And that's where trouble begins. Available here and by RSS on May 7.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenfHlRlTgqCIXkUHBTner@ChacrEuHRQPYVKkOucGfoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

Reprinting this article

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500-1000 words in your inbox in one hour. License any article from this Web site. More info

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Bluesky, or share a post Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
Technical Debt for Policymakers BlogMy blog, Technical Debt for Policymakers, offers resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Get the millstone of technical debt off the neck of your organization!
Go For It: Sometimes It's Easier If You RunBad boss, long commute, troubling ethical questions, hateful colleague? Learn what we can do when we love the work but not the job.
303 Tips for Virtual and Global TeamsLearn how to make your virtual global team sing.
101 Tips for Managing ChangeAre you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt?
101 Tips for Effective MeetingsLearn how to make meetings more productive — and more rare.
Exchange your "personal trade secrets" — the tips, tricks and techniques that make you an ace — with other aces, anonymously. Visit the Library of Personal Trade Secrets.
If your teams don't yet consistently achieve state-of-the-art teamwork, check out this catalog. Help is just a few clicks/taps away!
Ebooks, booklets and tip books on project management, conflict, writing email, effective meetings and more.