Evaluation of performance, merit-rating, or annual review. It nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, and nourishes rivalry and politics.

It leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. It is unfair, as it ascribes to the people in a group difference that may be caused entirely by the system, they work in. (Deming, 1986) Using performance appraisal of any kind as a basis for reward of any kind is a flat out catastrophic mistake. It is a sure road to demoralizing your workforce. Just don’t do it.

Question

You are the HR manager at a manufacturing company. The Chief Executive has recently attended a conference where he was exposed to the ideas of the Deming and others on performance appraisal and quality improvement – see above. He suggests that the company should discontinue all the performance appraisal practices. How would you respond to this request?