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Time to Rethink Performance Appraisals?

Sep 10th 2015, Legacy By Design

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 Penton Agriculture's LegacyConnection is a multimedia legacy initiative, designed to actively serve the succession planning needs of America’s ag community. The effort is a collaboration among Penton Agriculture’s vast array of media properties and Kevin Spafford's succession planning expertise.  It includes information, tools, and experiences to inform the succession planning process and encourage farming professionals to engage in planning to prepare for a next generation of farming success.

 

 

By Kevin Spafford, for Farm Progress Magazines

Though my June 2015 column (Base Performance Reviews on Results) was well-intended, Dick Steele, Chairman of the Board of Peaker Services, Inc., took exception and called me out. I’d criticized the normal review process and proposed a new approach, one based on actual performance. I suggested, “A performance review should support the goals and expectations of the organization. It should encourage improvement and professional growth.”  

 

To that and, based on his experience, Mr. Steele offered, “For a different take on employee reviews… Back in 1988, I went to a 4-day seminar given by Dr. W. Edwards Deming. I had been doing performance appraisals for 15 years at that time and it was making me sick. When I asked Dr. Deming about it, he said, ‘Just quit it; it's a bad idea.’ So I did and to this day, our 75 person company does not have performance appraisals.”  

 

“Over those years, we have had some employees who do not seem to be carrying their share of the load and we have talks with them. Some of those persons have left the firm and some have stayed. If you get into system theory, it is all but impossible to separate an individual's performance from that of his environment. So to apportion some extrinsic reward ‘fairly’ can never be done. What we do instead is to spend time with each person and get to know them and take an interest in them.”   

 

Mr. Steele was advocating leadership. And, though I’d also studied Deming’s work, it had been a long time. In case you’re unfamiliar, Dr. W. Edwards Deming is credited with formulating the rise of industry in Japan following World War II and America’s automobile industry during the ‘80s. As a visionary, he focused on the theory of continual improvement and his teachings on performance are revolutionary.  

 

Below is an edited version of Deming’s 14 Points for Management. Originally published in Out of the Crisis in 1986, and written to encourage a transformation---some may say revolution---of industry in America. Paraphrasing Deming, if he were to have written specifically for farming professionals, he may have advised to:   

 
  1. Create constancy of purpose toward improvement of production and service, with the aim to become competitive and to stay in business, and to provide jobs. 
  2. Adopt the new philosophy. We are in a new economic age. Management on the farm must awaken to the challenge, must learn their responsibilities, and take on leadership for change. 
  3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into all phases of production. 
  4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust. 
  5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs. 
  6. Institute training on the job.  
  7. Institute leadership. The aim of supervision should be to help people and machines do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers. 
  8. Drive out fear, so that everyone may work effectively for the company. 
  9. Break down barriers among departments. People must work as a team, to foresee problems of production and in use that may be encountered with the product or service. 
  10. Eliminate slogans, exhortations, and targets for the work force which demand zero defects and new levels of productivity. Such pronouncements only create adversarial relationships, as most causes of poor quality and low productivity belong to the system, and thus lie beyond the power of the work force.
    a.     Eliminate work standards. Substitute leadership.
    b.     Eliminate management by objective. Substitute leadership. 
  11. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer production numbers to quality. 
  12. Remove barriers that rob people in management of their right to pride of workmanship. This means eliminate the annual or merit rating bonus.  
  13. Institute a vigorous program of education and self-improvement. 
  14. Put everybody in the company on course to accomplish this transformation (revolution).  

Though I couldn’t agree more with Mr. Steele and we share a mutual admiration for Deming, my objective was to move the dial a bit, encourage a results-based conversation, and cause agribusiness leaders to rethink an age-old, long-accepted, approach to performance reviews. But maybe that’s not enough. If a leader’s primary responsibility is developing others, maybe it’s time to dust off the works of Deming and encourage a renaissance.

 

Published as "Time to Rethink Performance Appraisals?", by Kevin Spafford for "Farm Progress Magazines", September 2015.

http://www.legacy-by-design.com/news/time-to-rethink-performance-appraisals.html

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