Traditional Performance Appraisal Systems: The Deming Challenge

Abstract

Compares the traditional performance appraisal systems with Deming′s philosophy of operating a production system focused on quality for the consumer. W. Edwards Deming has long challenged the effectiveness of traditional performance appraisal systems used by American managers. He criticizes the traditional performance appraisal system of rewarding “win‐lose” results rather than supporting “win‐win” aims, thereby placing so much emphasis on judging and ranking people and using extrinsic motivational means. He recommends replacing the traditional performance systems that encourage win‐lose behaviour with systems that promote co‐operative and supportive behaviour. The Deming approach to performance appraisal involves a complete change of the traditional system to one that concentrates on managers being highly focused on quality and long‐term improvement. The successful implementations of Deming′s management approach in several American organizations were examined as available means of integrating performance appraisals into their quality system. The more successful companies have found remarkable improvement in consumer recognition, sales, market share, operating costs, customer satisfaction, employee morale, and of course quality. Such actions will not only help to strengthen these companies′ market position, but will help to improve the overall global competitiveness of American industry.

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