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, deje...