Incentives Deming

Based on what we know about psychology and on our experiences as managers, what Deming offers makes a great deal of sense. It is important to note that nothing is said here about incentives. Deming felt that incentives did... 

Deming would do away with all performance reviews, in any form, and performance incentives. In two places in his 14 points, he records his opposition to management by objectives. Those premises have not been prominently adopted. 

Proper use of incentives presents a very complex problem. It makes sense that people who do a better job should get paid more. A problem with this is that it is often difficult or impossible to reliably determine exactly who was doing a better job. Deming s solution was to base pay on such things as education and time of service, hi our own opinion, this is not sufficient. However, incentives should be used only when one has carefully looked at the problems and conflicts that the incentives might cause. For example, there is no evidence that the huge incentives provided CEOs for... 

For Deming, work production standards and rates, tied to incentive pay, are inappropriate because they bum out the workforce in the long run. Alternatively, a team effort should be marshaled to increase quality, which will lead to increased profits/savings that can then be translated to, for example, higher salaries or better benefits. Improvement efforts should emphasize improving processes the outcome numbers will change as a consequence. 

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