Deming’s Observations on Performance Management Concerning Merit Rating

MERIT RATING
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In “The Essential Deming: Leadership Principles from the Father of Total Quality Management,” Edwards Deming argues:
The merit rating 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 the rating, unable to comprehend why they are inferior. It is unfair, as it ascribes to the people in group differences that may be caused totally by the system that they work in (Deming and Orsini, 2013, Chapter 2).
The paper examines multiple scholarly sources to determine the degree to which Deming’s observations in the above quote about performance management are still true. In addition, it will show how some of these adverse outcomes have been addressed in contemporary organizations and the human resource management (HRM) skills that might be employed to avoid them.
Performance rating promotes short-term planning, politics, and rivalry in the workplace, hinders long-term planning, and destroys teamwork. In many organizations, merit rating is conducted by supervisors and human resource managers (Bayo-Moriones, Galdon-Sanchez and Martinze-de-Morentin, 2020, p. 1985). The primary objective of the performance rating is to determine employees’ milestones by identifying their weaknesses, strengths, achievements, and failures. Merit rating significantly determines whether the workers are qualified for job promotions, bonuses, and other financial benefits. Numerous organizations conduct performance appraisals once annually. As a result, instead of workers focusing on how to achieve long-term organizational objectives, they are obliged to emphasize short-term planning and strategies that would make them considered the best employees of the year. Additionally, employees prefer to undertake their duties alone and hesitate to ask for assistance from their colleagues. In other words, merit rating promotes a culture of competition between workers, destroying teamwork. Performance appraisals lead to employee-employee, employee-supervisor, and employee-organization conflicts (Grubb, 2007, p. 11). For example, the system introduces losers and winners, reducing workers’ cooperation. Moreover, they nourish internal politics and rivalry, particularly when only employees from a specific culture, race, ethnicity, skin color, and social status are the ones rated excellently.
Merit rating demoralizes low-ranking employees or those who did not meet their performance targets. Notably, these workers are considered underperforming and might become excluded by the high-ranking employees (Clercq, Haq and Azeem, 2019, p. 187). If nothing is done to boost the skills and competencies of the underperformers, they might get demotivated, lower their self-esteem, and eventually become unproductive since merit ratings can make them perceive themselves as incapable of meeting the performance requirements in the future. Moreover, low-ranking employees might feel crushed, dejected, bitter, depressed, inferior, and desolate among others. Merit rating subdivides workers into groups of high and low performers or winners and losers. In that light, the group differences constrain integrated thinking or teamwork (Dimes and Villiers, 2021, p. 852). For example, high performers might not be willing to work with low performers. In most scenarios, high-ranking employees prefer forming teams without involving low-ranking workers. An organization becomes like the competition ground for workers, making them not prioritize the long-term organizational objectives.
Besides, to a large extent or degree, an individual agrees with Deming’s observations contained in the quote about performance management in the first paragraph. Many organizations focus entirely on the outcomes of performance appraisals to push their agendas and set objectives while forgetting that some employees do not accept the outcomes. When workers fail to accept the results obtained from merit ratings, they develop resistance, which is seen in terms of how they set their priorities while undertaking their responsibilities (Kim, Oh and Park, 2018, p. 3). For instance, low-ranking employees might lose their focus on meeting set objectives and start searching for other employers who might appreciate their contributions and efforts. The HRM is vital since it affects workers’ behaviors and their efficiency to handle their daily tasks. Although merit rating is not implemented to punish employees, it can make them become motivated or demotivated. The few winners who achieve their performance targets might be motivated. However, losers feel inferior, incomplete, stressed, dejected, and demotivated. These individuals might lower the productivity of an organization since they do not feel satisfied (Anwar and Abdullah, 2021, p. 39). In some cases, achievement in specific job positions is not possible to measure, meaning that the results obtained from the performance rating might be biased. As such, dividing workers into two primary groups of performers and non-performers is unfair and such a system hinders long-term planning, teamwork, and promotes employee rivalry.
Performance appraisals do not measure every aspect of different job positions in an organization. For example, it can be easy to evaluate the sales made by a salesperson but challenging to measure the services provided by a shelf attendant. In that light, only high-ranking employees are happy about their performance outcomes. Many workers who fail to meet their performance targets are not motivated to undertake their duties (Kuvaas, 2006, p. 507). Deming made the right observation since employees whose performances are evaluated will prioritize meeting the criteria of the merit evaluation tool. That way, these people do things to ensure that the system favors them and obtains impressive outcomes. Since many performance appraisal tools reward the best-performing workers and forget to implement proper strategies to encourage those who fail to meet their targets, the system creates a dysfunctional workplace (Langan-Fox, Cooper and Klimoski, 2007, p. 441). In other words, low-ranking employees are disinterested to participate in their daily activities since they think that their performance might not change favorably. Some workers even become unable to work after receiving their ratings due to feelings of inferiority, depression, and bitterness. As such, merit ratings are sometimes unfair and fail to foster long-term planning.
Contemporary organizations are implementing proper strategies to avoid adverse consequences of merit ra...