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Should Salaries and Incentives be linked with Performance?

When the spiritual teacher and his me that all rocket scientists are
disciples began their evening meditation, earthlings like you and me. They wear
the cat who lived in the monastery made their pants just like we do, one leg at a
such noise that it distracted them. So time. If telling a rocket scientist or
the teacher ordered that the cat be tied any other professional his work
up during the evening practice. expectations is wrong, then P.E. is also
Years later, when the teacher died, the wrong. If gauging the work of the person
cat continued to be tied up during the based on the expectations is wrong, then
meditation session. And when the cat certainly the incentive system is
eventually died, another cat was brought insulting.Most Performance review
to the monastery and tied up. Centuries programs are copied from a Dilbertesque
later, learned descendants of the management book where the first stage is
spiritual teacher wrote scholarly an "anonymous" upward reviews, followed
treatises about the religious by optional "self-evaluation" forms.
significance of tying up a cat for Finally there is a numerical score, in
meditation practice.The traditional view lots of non-scalar categories like "works
in organizations has always been to link well with others", from 1-5, where the
Salaries and incentives to Performance. only possible scores were actually 3 or
And I wanted to question this tradition. 4.I fully agree that rating between 1-5
Every good company in this world has a or 1-100 is a silly thing. One of the
performance evaluation (P.E.) system. best things I like about the software
Salaries are linked to this P.E. . Even industry is the fact that everything is
incentives such as extra training, represented in binary. i.e. 0 or 1. In my
monetary bonuses, freebies are given to view all evaluations should be similar.
the best performers. Joel Spolsky The only two possible scores are 0 (no)
confirmed my theory that P.E. should not or 1(yes).
be conducted.In April,2000 Joel wrote a e.g. How is his quality of code? - 0 if
beautiful article - Incentive Pay it is bad 1 if it is good.For many this
Considered Harmful. I visit Joel's site, concept may seem harsh. In my entire
joelonsoftware.com, regularly and love career I have seen that we either win or
reading his articles. loose. i.e. 1 or 0 is a reality of life.
These are the main points highlighted in When I used to handle the sales in our
this wonderful article -Treating your company, many a times I had faced a
rocket scientist employees as if they situation where Poornam/Bobcares would be
were still in kindergarten is not an made to compete with 3 or 4 other
isolated phenomenon. Almost every company providers. In the beginning I used to
has some kind of incentive program that think "Oh, we just missed it. Our quote
is insulting and demeaning. was second best, we did well". Then I
Most Performance review programs are realized being second best does not allow
copied from a Dilbertesque management us to grow or have the best people. One
book where the first stage is an has to be win or loose.The system never
"anonymous" upward reviews, followed by took into account the fact that people
optional "self-evaluation" forms. Finally have different and unique talents, all of
there is a numerical score, in lots of which are needed for a team to work well
non-scalar categories like "works well such as a person who motivates everyone
with others", from 1-5, where the only else when the going got tough or someone
possible scores were actually 3 or 4.The who is incredibly insightful
system never took into account the fact strategically.
that people have different and unique Let's take the example of the Athletics
talents, all of which are needed for a Coach again. Suppose he was training a
team to work well such as a person who team for a 4x100 meters relay. Would it
motivates everyone else when the going help if 3 were great sprinters and the
got tough or someone who is incredibly forth was slow but did a great job by
insightful strategically keeping the others happy by singing. I
Negative reviews, obviously, have a guess that team would never make it to
devastating effect on morale. In fact, the top. Maybe the coach could hire a
giving somebody a review that is singer to keep them happy.It is true that
positive, but not as positive as that gauging just one quality is bad. For
person expected, also has a negative example if "lines of code" is the only
effect on morale.The effect of reviews on criterion for judging a person then the
morale is lopsided: while negative system is wrong not the concept. One has
reviews hurt morale a lot, positive to review all the qualities that are
reviews have no effect on morale or needed for the job.Negative reviews,
productivity. obviously, have a devastating effect on
Most people will be disappointed by morale. In fact, giving somebody a review
their reviews because most people think that is positive, but not as positive as
that they do pretty good work (even if that person expected, also has a negative
they don't). It's just a little trick our effect on morale.The effect of reviews on
minds play on us to keep life bearable. morale is lopsided: while negative
Incentives (or bribes) simply can't work reviews hurt morale a lot, positive
in the workplace. It leads to teamicide: reviews have no effect on morale or
the inadvertent destruction of jelled productivity.
teams. Most people will be disappointed by
Giving somebody positive reinforcement their reviews because most people think
(such as stupid company ceremonies where that they do pretty good work (even if
people get plaques) implies that they they don't). It's just a little trick our
only did it for the lucite plaque; it minds play on us to keep life bearable.
implies that they are not independent Performance Evaluations would definitely
enough to work unless they are going to make the under performers sad. They have
get a cookie; and it's insulting and two choices - they can either quit or
demeaning. improve. If they quit it is good for the
For 5 years I believed very word of what organization. And if they improve it is
Joel said. I even made sure that we do great for the organization as well as the
not have any stupid company ceremonies or individual.Incentives (or bribes) simply
have any performance evaluations in can't work in the workplace. It leads to
Poornam. I even sat down to write why teamicide: the inadvertent destruction of
Performance Evaluation and Incentives are jelled teams.
bad. I was a lot like the learned Giving somebody positive reinforcement
descendants of the spiritual teacher who (such as stupid company ceremonies where
wrote scholarly treatises about the people get plaques) implies that they
religious significance of tying up a cat only did it for the lucite plaque; it
for meditation practice. I never implies that they are not independent
questioned Joel's views.Today I firmly enough to work unless they are going to
believe that Performance Evaluations is a get a cookie; and it's insulting and
must and it must be linked to salaries demeaning.
and incentives.Consider an Athletics I looked up in the dictionary and found
Coach not timing his sprinters. He just out the meaning of the word -
tells them to run everyday. It would be a Bribe.briben : payment made to a person
matter of time before the sprinters would in a position of trust to corrupthis
get tired and would stop running. So what judgment
does he do. He sets the goal. If you are Bribe \Bribe\, v. i.1. To commit robbery
a 100 meters sprinter then first and or theft. [Obs.][1913 Webster]2. To give
foremost you are told that if you have to a bribe to a person; to pervert the
be the best in the world you have to beat judgment orcorrupt the action of a person
9.78 seconds. i.e. first define the in a position of trust, bysome gift or
target or set the expectations. Now the promise.[1913 Webster]Now is giving an
coach starts to time the sprints and incentive a bribe. Definitely Not. No
evaluates his technique, speed, organization gives an incentive for doing
capability and so on. And after each an illegal work. Also, if incentives are
evaluation the coach works out on ways to wrong then I guess even salaries should
improve the performance further. be considered as a bribe. "You work and
This is exactly why Performance for that work I'll give you money at the
Evaluation should be done.Let's take end of the month ;-)".Incentives are
another example. Consider an automobile given only to the best to perform better.
company which makes cars. If they decide And the only only way to guage this
to take out a new model and if it is a performance is by performance
one bad car,even if they made a million evaluations.Many a times people do feel
more in the same technique they would not that company ceremonies are stupid
become the best car makers. They will because they get plaques. Well one reason
however becomes experts in making bad for it the way the reward is seen. For
cars. So what should they do. First, they many the plaque is just an object which
define what a "Good Car" is. Then they does not cost a lot. I am sure if the
make it and see how the customer reviews reward is a million dollars these same
its performance. Based on this evaluation people would want company ceremonies very
from the customers the Car Maker improves hour.
upon the cars and slowly they become In the Olympics the top honor is just a
experts.In Management there is a piece of money which anybody can buy.....
beautiful concept called "PDCA" cycle But yet for many athletes an Olympic Gold
Plan, Do, Check, Act. Performance is the very purpose of their
evaluations work on similar systems and life.Amarjyoti Krishnan heads
the target of an P.E. system is continual bobcares.com, a tech support company for
improvement of the organization and the webhosts and ISPs. He is the co-founder
individual.Most Performance Evaluation of Poornam Info Vision Ltd., a software
Systems are based on this principle of and IT services company which specializes
setting the expectations and then in Linux based solutions for Webhosts and
evaluating the progress.Treating your ISPs. Poornam Info Vision is an ISO
rocket scientist employees as if they 9001:2000 certified company with a team
were still in kindergarten is not an of over 100 engineers.Amarjyoti is a
isolated phenomenon. Almost every company Computer Engineer based in India and has
has some kind of incentive program that over 7 years of experience in the hosting
is insulting and demeaning. industry. He has spoken and written
Even a Rocket Scientist needs to know extensively on the subject. His articles
his expectations when he goes to work. have been published both online as well
Infact a great rocket scientist once told as in print in magazines.




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