During a recent discussion in the LinkedIn Deming HR group, one of the discussants posted the following link:
http://www.ted.com/talks/view/id/618
I can't recommend it too highly. It's a talk by Daniel Pink, about the science associated with rewards for performance. Anyone who was a follower of Deming, and anyone who has read Alfie Kohn, is already familiar with the concept that reward for performance can be harmful. Daniel's discussion, especially his piece about the candle problem, is an eye-opener. I would like to try that experiment at a conference or with a large class sometime.
My question or concern is the same as Daniel's: why do we continue to do, in business, what the science says is exactly the wrong thing to do? In its most public fashion, we do it on a grand scale with CEO compensation.
Daniel does a good job of pointing out that pay for performance, when it's linked to any job that requires thinking or problem solving, does more harm than good. What his talk doesn't cover, though, is the systems thinking aspect of this topic; the fact that you can't measure the performance of anyone in isolation. It's often the system that creates most of the performance we attribute to individuals.
This is certainly a worry in education these days, with many government officials pushing for performance pay for teachers. Stuck in the old carrot and stick paradigm, with nothing to go on for metrics but aggregate standardized test scores, these schemes will go a long way toward further suboptimizing our education system. Instead, put the money you might use for rewards into building systems like those built by Geoffrey Canada in the Harlem Children's Zone. Canada showed that by taking a systems approach you can improve the performance of even the most underpriveleged student populations, and put those students on an even playing field with the most priveleged.