PUTTIN' COLOGNE ON THE RICKSHAW

In 1927 Werner Heisenberg, a German physicist, Nobel Laureate, and one of the founders of the field of quantum mechanics, discovered what’s now called “The Heisenberg Uncertainty Principle.” It explains how certain pairs of physical properties of subatomic particles cannot be known at the same time. Heisenberg’s principle states that “the more precisely the POSITION is determined, the less precisely the MOMENTUM is known.” A simple way of describing the principle is that when you measure the momentum of a particle, you lose the ability to know where it is going, because the measurement process changes the trajectory of the particle.

“The Heisenberg Principle” can also been applied to the context of business and the workplace in regard to the performance review process. Re-worded in that context, we have: a performance metric is useful as a performance metric as long as it isn’t used as a performance metric. When you measure the performance (or behavior) of a person there is a substantial likelihood that you will change the trajectory (behavior) of that person–and as we shall see that change is not always for the better–hence why it can be a curse.

Another factor (in social-science terms) at work here is what’s called “observer bias:” the error introduced into measurement when observers overemphasize behavior they expect to find and fail to notice behavior they do not expect, or don’t want.

In his now famous article, “On the Folly of Rewarding A, While Hoping for B” ©1975, Steven Kerr explains how this unintended result of the performance review process happens more that most would think.

As Kerr tells us, “Numerous examples exist of reward systems that are fouled up in that behaviors which are rewarded are those which the rewarder is trying to discourage, while the behavior he desires is not being rewarded at all. Usually rewards are distributed according to individual performance. The college basketball player who feeds his teammates instead of shooting will not compile impressive scoring statistics and is less likely to be drafted by the pros. The ballplayer who hits to right field to advance the runners will win neither the batting nor home run titles, and will be offered smaller raises. It therefore is rational for players to think of themselves first and the team second.” This explains why teamwork is so often hard to truly achieve.

Kerr continues, “In business organizations where rewards are dispensed for individual goals achieved, without regard for overall [organizational] effectiveness, similar attitudes are often observed. Under most [performance review] systems, goals in areas where quantification is difficult often go unspecified. The organization therefore often is in a position where it hopes for employee effort in the areas of team building, interpersonal relations, creativity, etc., but it formally rewards none of these. In cases where promotions and raises are formally tied to [the performance review results], the system itself contains a paradox in that it asks employees to set challenging, risky goals, only to face smaller paychecks and possibly damaged careers if these goals are not accomplished”

Here’s the kicker…according to Kerr, “a survey [that he performed] of a typical organization revealed that the same behaviors which managers thought dysfunctional were those which lower level employees claimed were rewarded.”

Kerr uses the example, “tendencies toward apple-polishing (sycophantic behavior), which management claimed [they didn’t tolerate] were those claimed by subordinates to be their most rational course of action in light of the existing reward system. In this case management apparently was not getting the behaviors it was hoping for, but it certainly was getting the behaviors that were perceived by subordinates to be rewarding.”

Also “observer bias” is introduced because evaluators see a behavior and interpret it according to what it means to them, whereas it may mean something else to the person showing the behavior.

Here’s another way to look at this. The performance of any person in an organization is equal to their contribution to performance plus the contribution from the interaction between them and the rest of the organization In other words, an individual’s performance cannot be separated from the organization itself. Thus as you increase the number of employees the complexity of this increases almost exponentially. Moreover, in an organization that’s in any way dysfunctional it compounds the problem even more as the interaction between employees (communication, teamwork, etc.) is usually confrontational and thus becomes counterproductive to the overall organizational performance and that of the individuals themselves.

So from the Heisenberg Curse perspective what this all means is that regardless of what “performance measures” are used in the performance review process, they may not illicit the behavior that the organization is striving for, in fact they may illicit the exact opposite behavior.

This is because an employee’s true performance (behavior) will be 1) the product of interaction with the system as a whole, and 2) the fact that some performance parameters may mean a totally different thing from what the evaluators believe it to be. This is why most performance review processes that try to reward behavior A, will instead get behavior B.

Thus we have another compelling reason to rid modern business of the “individual” performance review and concentrate instead on the performance of the system (the organization) as a whole. Individual performance is then measured as the person’s contribution to the organization meeting its goals and rewards are then metered out to the individuals according to their contribution.