Wednesday, April 29, 2009

The merit myth

My state, like many other states right now, is facing a severe budget crisis. Education in general, and especially higher education, is in line to see some enormous budget cuts.

As I follow this issue in the local press, I am not surprised by the suggestion that we need to have a way to reward and retain the "good" teachers and fire the "lousy" ones. This idea is called pay-for-performance or merit based pay and it is very popular.

Sounds like a good idea, right? Wrong. Most people would be surprised to learn that there is virtually no research based support for the efficacy of pay-for-performance.

I personally have never understood the logic behind a system that purposes to label a few people “winners” and the vast majority of people “losers”. I’ve always favored the approach where we encourage folks at work to cooperate with each other and compete against the folks in other companies. When “we” win by spanking the competition, then rewards are shared among everyone.

Bob Sutton and Jeff Pfeffer have done a good job exposing the myth of merit in their books. Here is what Sutton has to say about the competition set up by pay for performance systems in his book The No Asshole Rule:

Alpha males and females turn into selfish and insensitive jerks and subject their underlyings to abuse; people at the bottom of the heap withdraw, suffer psychological damage, and perform at levels well below their actual abilities. Many organizations amplify these problems by constantly rating and ranking people, giving the spoils to a few stars, and treating the rest as second- and third-class citizens. The unfortunate result is that people who ought to be friends become enemies, cutthroat jerks who run wild as they scramble to push themselves up the ladder and push their rivals down.

…..Winning is a wonderful thing if you can help and respect others along the way. But if you stomp on others as you climb the ladder and treat them like losers once you reach the top, my opinion is that you debase your own humanity and undermine your team or organization. (pp 104-105)

The logic of merit is so appealing; one of the reasons why the myth is so pervasive. I must admit that I too advocate an approach to management that is based on identifying and rewarding desirable behaviors. Yet I always preface this advice with the warning that this approach can have unintended consequences in the form of undesirable behaviors as people chase the rewards set before them and forget about the larger purpose of their work.

The key is to make cooperative behaviors a big part of what is expected and rewarded as performance.

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