CENTRAL OTAGO MAYOR

Killer Quotas

The death of Christchurch bank manager Michael John Smith is a tragic example of what can happen when work pressure becomes too much, wrote Kelly Andrew in the May 18th Christchurch Press.

According to the Christchurch Coroner, Smith took his own life as a result of depression triggered by stress, caused largely by the demands of a job in which he had to constantly battle to achieve sales targets. Using performance targets – sometimes called quotas – to drive

productivity is a fraught subject. It's very common, sometimes pretty brutal, and polarises opinion strongly. I've got myself into trouble writing about it in the past, and the Press article sent me digging through the archive.

What started me off, back then, was this inquiry to the Deming Electronic Network by Eugene Taurman: `Does anyone know of a credible article on the behaviours that quotas cause at the management level? There is plenty written on the damage of piecework but I do not know of anything on management staff quotas'.

Quotas are anathema to many Demers (the disciples of W Edwards Deming), who believe they drive perverse behaviours, damage collaboration, lead to sub-optimisation of work systems and subvert effective team-work.

David Chase of the California Lottery responded with a suggestion that the network take a look at No Contest: The Case Against Competition, by Alfie Kohn, who argues that competition – at work, at school, at play, and at home – turns all of us into losers. Kohn says that competition is not an inevitable part of human nature. Rather than motivate us to do our best, competition sabotages self-esteem and ruins relationships.

Demer James Robert Crow pitched in with a summary of his paper called Institutionalized Competition and its Effects on Teamwork (The Journal for Quality and Participation, 1994). The problems with quotas, he said, are:
· quotas place people in competition with each other – perhaps optimising individual performance, but at the expense of the organisation.
· they limit productivity. Typically next year's quota is based on this year's results plus some. Throttle back now for an easier future.
· they tend to bunch productivity toward the end of the measurement period.

To illustrate, Crow told a story about spotting a monthly sales bulletin on a client company's sales manager's desk. All of the sales reps were ranked in order. There was one winner and everyone else lost.

“I asked if they had done any time analyses looking for repeat patterns. My prediction? Sales would tend to peak toward the end of the month. Sure enough, they did”, Crow reported.

Seventy percent of this firm's sales came in the last two days of the month. Sales people were making sales all month long, but not booking them until they were sure of hitting quota. The ideal was to hit quota and carry a cushion of unbooked sales into the next month. The quota system was limiting sales!

My contribution, and this is what got me into trouble, was a homily about New Zealand's performance at the (then) recent summer Olympics, where we did rather badly in the medal count.

“When the finger-pointing began, our schools were blamed”, I wrote. “They discourage competition and want to make everyone a winner, people said. Look at junior team sports, they said – not allowed to keep score because then one team 'loses.'

“No wonder we can't produce Olympic winners, and no wonder the All Blacks (the national rugby team) get beaten more than they used to. There's no mongrel in the national psyche any more. Seems to me that if life is about winning and losing, then pretending otherwise to kids does them a disservice.”

You can imagine what the Alfie Kohners thought of that!

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Dr Malcolm Macpherson is a veteran quality award assessor, publisher and communicator, and Mayor of the Central Otago District. He edits an international Baldrige Award web site. Contact him at mayor@codc.govt.nz, or visit www.baldrigeplus.com. This and all past Q-NewZ columns also available at www.macpherson.co.nz.