Replacing Performance Appraisals and Merit Pay: Shifting Focus to Systems and Guiding Principles

What causes fear in an organization? How is fear hurting employee morale, productivity, and overall performance? What great things can happen when you remove fear? In this episode, John Dues and host Andrew Stotz talk about fear, and how managers can get rid of it.

TRANSCRIPT

0:00:02.6 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we continue our journey into the teachings of Dr. W. Edwards Deming. Today I'm continuing my discussion with John Dues, who is part of the new generation of educators striving to apply Dr. Deming's principles to unleash student joy in learning. This is Episode 14, and we are continuing our discussion about the shift from management myths to principles for the transformation of school systems. John, take it away.

0:00:32.9 John Dues: Andrew, it's good to be back. Yeah, we've been talking about these principles. We've sort of shifted from the myths to the principles that, you know, especially education systems leaders can use to guide their transformation work. I think we're up to Principle 8 today, and most recently I think last time we did, "institute training on the job" and "adopt and institute leadership." So we'll move on to Principle 8, which is "Drive Out Fear." So I'll start with just reading the principle verbatim from the book. So Principle 8: "Drive out fear so that everyone may work effectively for the school system. No one can perform their best unless they feel secure to express ideas, ask questions, and make mistakes." So I think maybe for me, when you look at the 14 principles, I haven't done this analysis, but I would venture a wager that Dr. Deming spent more time on this particular principle and related topics than any of the other ones.

0:01:44.6 JD: He discussed it numerous times in Out of the Crisis, numerous times in The New Economics. And one of the quotes that really stands out for me on this topic was in Out of the Crisis where Deming said, "Where there is fear, there will be wrong figures." And I don't think that... I don't think people sort of fully appreciate just how much sort of... "Writing fiction" is sort of how I've framed this in the past in one of our earlier episodes, but just sort of how much made-up data there is in every organization. And that can be wrong figures in the form of qualitative descriptions of important work, it can be quantitative data. But in either case, it makes it nearly impossible to improve our organizations. Because how would you even know where to start improvement if the figures and the descriptions of the work are inaccurate? So that'd be a good topic for today.

0:02:53.3 AS: Sometimes this one about fear is, sometimes it's easy for people to understand and sometimes it's hard. You know, like, when you think about fear, you can think about physical fear like, "Well, okay, am I in physical danger here?" Like, what are we talking about? Or, "Am I in fear that I'm gonna lose my job?" And some people may think that that's a good thing. And one of the first things I want to just think about is, what are the specific things in a school or in a school environment that causes people to be fearful? Maybe we could identify what you see, because you've talked about the outcome of fear is made-up data, wrong figures. It's all kinds of outcomes from fear, but what are the sources of fear?

0:03:47.2 JD: Yeah. Well, one thing I think of is you certainly can have sort of a tyrannical boss or manager. That certainly exists where there's actual fear, they yell, they threaten, passive-aggressive, those types of things. So that certainly can exist.

0:04:05.4 AS: Yep.

0:04:05.9 JD: I've definitely witnessed that in my almost 25 years in terms of career, you're gonna witness things like that. But I think more often what I'm talking about is sort of more subtle versions of fear that permeate throughout organizations. So sources, there can be different sources. I think they can come internally from some of the systems and processes you've set up in your own school or school system. Some of them are external, so, I mean, a go-to source of fear for a lot of people is, "How do my kids that I'm teaching perform on the state test?" That can be a source of fear, for sure. There is sort of internal to your system. I think the fear... I think a lot of people have sort of apprehension when the principal comes to your classroom to observe your class, and then there's sort of the ratings and rankings that go with a typical performance evaluation. So I think that can be another source of fear in a school system. And there's probably many other sort of versions of that. But I was thinking of...

0:05:25.4 JD: A lot of times when you hear people talk about driving out fear, you sort of get the negative stories. I think, not related to schools, but I think of a classic example of fear in the form of an unwillingness to speak up and say something is the Challenger space shuttle explosion. I think that's a classic sort of example of where people did see issues along the way and really nobody spoke up. So I think that's a sort of a classic example. But I was thinking of... And I was thinking about driving out fear in my own organization. At United Schools Network, one of the anecdotes in the book that I tell is actually a sort of a more positive example. So I was gonna maybe share that and talk about some of the details there. And it's sort of a combination of Appreciation for a System and Driving Out Fear, sort of working together.

0:06:32.0 JD: But I'm going back to the summer of 2013. So I was a school director or principal at that time of a middle school. And to put that in context, we were grades six through eight. I was entering my sort of fifth year leading Columbus Collegiate Academy. It's a fully built out middle school, six, seven, eight, serving the East Side of Columbus. And I was sitting in my office with my colleague, her name's Kathryn Anstaett. She was the principal on the other side of town. Kathryn and I had a working relationship because she previously had served on my team as a teacher and then as sort of an assistant principal for curriculum and instruction. So we knew each other well. And then she had been tapped to lead our new middle school on the West Side. And she had just wrapped up that first year. It was growing from just serving sixth grade, and now they gonna serve sixth and seventh grade for the 2013-14 school year.

0:07:37.1 JD: And just like today, 10 years ago, sort of similar, limited pool of prospective teaching candidates. And sometimes Kathryn and I, we would interview a person and we'd both want to hire that same teacher. And we had come to the sort of agreement where across the hiring season, for us, the fairest approach was just to alternate turns. So Kathryn would get first choice on a particular set of interviews, and then I would get first choice on the next set. But on this particular day, we both wanted to hire this same reading teacher, and it was my turn in that rotation. Kathryn and I were sitting and looking at both school's staff rosters, and we literally said, "In order to sort of make a decision that's best for the system, this hire should really go to Kathryn." I wanted the person, I needed the person, but I also had this capable group of reading and writing teachers, despite the one teacher opening, but she was just building this new team. So she really needed a really outstanding reading teacher.

0:08:53.4 JD: And I think thinking through this sort of whole system's lens gave my turn to Kathryn. And I think it's important to say here, I actually hadn't heard of the Deming philosophy at this point. I hadn't been exposed to this idea for appreciation for a system, but really the decision making was pretty simple. Kathryn and I were colleagues, we were on a small team working to build this new network of schools, and one of the best ways to sort of bring that network to fruition was to, you know, allow her to hire this particular teacher for her school across town.

0:09:31.4 AS: Now where this connects with Drive Out Fear is that there were a number of things in place that sort of gave me the confidence as a school director or principal to make this decision. I was employee Number 2 in our organization, so I was sort of on that founding team. That gave me some, I guess, some standing in the organization. By this time I had been there for five years, and I was pretty well established as a leader. I had a close working relationship with our staff. I had a close working relationship with our founder and superintendent. But even in that context, if I was being honest, this sort of whole system thinking was not easy because we're still a relatively young organization. We're just five years old. Really the question for a startup in its fifth year is still survival. Are we gonna survive as an organization? And there was a lot of pressure on me as a school leader to achieve high test scores and really establish the reputation of the school as a strong option on the East Side of the city.

0:10:44.9 JD: And thankfully, I had the backing of my superintendent, I had the backing of our board to make this decision, but I was fearful. I was fearful because it is very possible that even with that support, what would happen if I had been held accountable for our reading results, let's say, after this decision had been made? Unless I reminded people a year from now when kids take the state test and they get their scores back, they might not even remember that, "Hey, remember when we had sort of collaborated and made this decision?" They're likely, and some organizations are gonna come to me and say, "Hey, John, what's up with the reading scores?" That's not actually what happened, but that certainly was a plausible possibility.

0:11:40.7 JD: But my point is, and I think most organizations, it is really hard to make decisions like that. Was I fearful of my boss? No, of course not, not in this situation. Was I fearful of my colleague across town? No. Of the board? No. But in the back of my mind, I'm sitting there thinking, "I'm gonna make this decision. I really wanted this teacher. It was actually my turn. But I think it's the best thing for the whole system if this particular teacher goes across town and helps this new school."

0:12:18.0 JD: I think I feel better today making that decision 'cause we've more explicitly made the Deming philosophy and these 14 principles a part of our system. However, I can imagine, for many people sitting there thinking if they're a school leader, could you make this same decision in the absence of having these principles in place beforehand? So I thought that was a good example of Drive Out Fear. Again, with all these things in place, even with all those things in place, a startup early employee close relationship with the superintendent, board, I was still sort of wondering if I should make that decision as a young leader.

0:13:04.8 AS: So it's interesting because I was thinking about, what is the source of fear? The source of fear is that we are personally going to be injured. If we think about the source of physical fear of an animal or of a human when we're in a dangerous situation, it's that we're gonna personally be injured. Now you could also extend that to the family. If you are a pride of lions or you're a group of animals and the mother or father instinctively knows to try to protect itself but also its family. But it's this, it's the ultimate selfishness for survival. And that's where... One of the things I was thinking about when you were talking is like, why does Deming use this word "fear?" I mean, it's a pretty intense word. It is something that's visceral.

0:14:00.2 JD: Yeah.

0:14:00.3 AS: You know, to be fearful is a scary thing. And...But what you're describing is the idea that if we don't think about the business or the school or the education as a system, then what we're gonna be doing is everybody for themselves.

0:14:24.0 JD: Yeah.

0:14:24.6 AS: Protecting themselves and rewarding the protection of themselves and their areas. And when you view things as a system, then you have to give space for people to do the not necessarily natural thing. I mean, it's strange to say "not natural" 'cause I also think that people want to work together. People do not wanna be pitted against other people. Nobody wants that. Nobody has that as a natural instinct. If that instinct to be pitted against other people is in someone, it's quite possible it's in them because of something that maybe happened in their past where they realized, "To survive in this situation, I've gotta be pitted against other people and gotta overcome that." But I would say that people naturally wanna work together, and it's like we come in and we put in structures that we think are good management, but actually cause people to be pitted against each other.

0:15:28.9 JD: Yeah. I think you have to draw this out a lot of times in terms of... Because I think a natural reaction for someone listening to this, for some people, some leaders may say, "There's no fear in my organization. I'm a good guy," or, "I'm nice," those types of things. But as soon as I would hear a leader say that, that would be a dark pink flag, if not a red flag for me. Because there is, without a doubt, there is fear in every single organization. Now, the level of that fear is gonna vary based on the culture at that particular organization. But there is some form of fear in every organization. If you've ever sat in a meeting and you have withheld a thought that you think that was important to share because you are afraid of what the response is gonna be from the people in that room or a person in that room, then there is fear in that particular organization.

0:16:30.8 JD: And I think a lot of it has to do with people are making judgements all the time based on the system that they are living in. They observe what happens to other people that make similar decisions or behave in a similar way. So that's why something like Appreciation for a System and Driving Out Fear, these things have to work in concert with each other, right? Because if I was gonna be held accountable at all costs, if the board and the superintendent that I were reporting to in that situation, that hiring situation, were solely focused on management-by-results or management-by-objective, and I had this let's say a performance evaluation tied to that, I'm not sure even in retrospect if I would've made the same decision. 'Cause all those things have to work together to facilitate the individual's being willing to collaborate like this. The system has to facilitate it. I think that's sort of the point that all these principles have to work together hand in hand in order to bring something like Drive Out Fear to fruition.

0:17:45.9 AS: And I think one of the hardest things for people that are new to this thinking is that almost everything that we do drives in fear.

0:17:55.4 JD: Yeah. [chuckle]

0:17:57.2 JD: It's "I want results. We're about accountability around here." And there's plenty of schools I'm sure that put up a sign like "Personal Accountability," and, "We want measurable results and I don't want to hear excuses and you're not responsible for another department. You're responsible for your department." And it's just everything that we are given, and everything... We are rugged individualists, particularly in the American sense. That's kind of the foundation. So to come and say, "I'm not so concerned about your individual, I'm concerned about your contribution to the whole team," it just doesn't happen that much.

0:18:41.0 JD: Right. Yeah. Yeah. I mean, I think the first thing you have to do as leaders is recognize that fear is present in your organization, and then the next step is sort of figuring out the pervasiveness or severity of that fear. And a lot of that's, again, determined by the culture of your organization. But I think it is a natural byproduct. If you're doing anything that's the management-by-objective, management-by-results, performance appraisal, rating and ranking; if you are doing any form of those things, then there's no doubt that fear is pervasive in your organization. Because you're incentivizing people to optimize their individual classroom or their corner of the organization, whether that's classroom, grade level, an individual school building within a system, a department within the system, whatever it is; you are optimizing that behavior versus optimizing the aim of the the total organization.

0:19:39.0 AS: And the last part of this that I just wanted to think about was, when someone first hears this and then they start seeing the connection between personally incentivizing people through performance appraisals and merit pay and these types of things related to individual performance, the first question is, what do I do instead? I got performance appraisals and I've got pay for performance and I got beliefs about accountability and all that. And maybe a good way to wrap up this Drive Out Fear is kind of, what are some steps that you can do instead of or in replacement of or maybe you don't even necessarily have to replace something? What are your thoughts about how you can help somebody who's just coming aware of all this stuff but is a little bit overwhelmed because they're used to the traditional structures?

0:20:39.0 JD: Yeah. That's a good question. I think one thing is this idea of you have to... If you are a management or a leader or set of leaders, you have to stop blaming employees and looking at problems as systems problems instead of problems of individuals sort of serving in the system. So that may be one of the hardest things is that, then if that's true, which I think it is, then faults of the system are the responsibility then of management 'cause they're the ones that have the authority to design the system, redesign the system, change the system. I think that there has to be some type of concrete mechanism by which, in a school system whether it's teachers or students, that they can ask questions and offer suggestions for improvement. There has to be that mechanism in place.

0:21:31.7 JD: It doesn't mean that every suggestion necessarily leads to a change in the system, but there has to be a system in place that elicits those suggestions, and then some type of follow up. "I heard this. I studied it with you. We're not gonna make this change but here's the reason why." Or, "We looked into this. We studied it together over time. We gathered some data and this is actually a really good idea and we're gonna change that." So one very concrete, small thing that I do for every improvement team and every committee I lead in an organization, there's always sort of a meeting tracker document. And one of the tabs within that is just a Google Sheet. Each meeting is on a tab. One of the tabs is always a parking lot, where that every member of that committee or every member of that improvement team can drop in suggestions for improvement all along so we could make improvements in real time if we need to. So that's one very simple thing that I do. And then I also have a written record and for committees that I lead year in and year out, I just constantly, continually improve them over time based on those suggestions. So that's one concrete thing.

0:22:44.7 JD: A bigger thing for management, I think, is because things get hard when you get into a time crunch or a high stress situation, it is easy to sort of make decisions based on, "It is just easier short term to do this." So ahead of that, what I would strongly suggest is have a written set of guiding principles. That's why I like the 14 principles so much because they are a concrete written set of principles you can fall back on and you can then... You can test any idea or any direction that you're moving against those sort of foundational principles. And if the principles are violated, then you know you're moving in the wrong direction. But it's much harder to sort of do that in the high stress situation where you're reacting to something. In the absence of those foundational principles, you're more likely to sort of take the easy way out. So that's a little bit of longer process to put those principles in place. And I think that's probably a concrete thing that a leadership team or a superintendent and the board can do, so that you can facilitate having the Deming philosophy take root in your organization.

0:24:03.0 AS: So let me summarize what we've talked about in this Principle 8 about Drive Out Fear. The idea of course is to drive out fear for the effectiveness of the system, the school system, the business, whatever that is. And you talked about having the ability for people to... People to have the ability to express ideas and ask questions and make mistakes. And you mentioned that Dr. Deming said, where there is fear, there will be wrong figures. And you said, a lot of made-up data.

0:24:35.2 JD: Yep.

0:24:36.1 AS: That you see a lot of made-up data or that's what we end up. And we talked about sources of fear and we talked about tyrannical boss and possibly yelling and threatening. Those are like overt types of fears. But you also talked about subtle versions like internally driven, maybe ratings and rankings. People are fearful of speaking up. Or maybe they're externally driven by the test scores that your students get in maybe state tests as an example. And then we wrapped up by trying to think about, what are some ways to improve the situation, particularly for someone relatively new to this. And one of the things you mentioned is allowing employees or teachers to make suggestions on how to improve. And you also talked about having the written set of guiding principles which is what you've created through your book.

0:25:29.2 AS: And I like that one because that also is a longer term way of building some constancy in the business. But I just really want to end my summary by saying, for those people who are listening that think, "I haven't heard of this Deming stuff and I'm dealing with all these different problems but it's a bit overwhelming," so I think the best way to end my summary of this is - if that's the case, if you're in that situation where you're just starting to adopt this type of stuff, just start with stop blaming employees.

0:26:01.8 JD: Yeah.

0:26:03.5 AS: Anything you would add to that?

0:26:05.0 JD: Yeah, just taking that mindset of, most of the things that you're seeing are not a result of individual employees but rather they're created by the system itself. So three words. When you run into a problem, what's the system? What's the system? In the vast majority of cases, 95% plus, it's the system that is producing those results, not the individuals working in the system.

0:26:32.5 AS: Well, John, on behalf of everyone at the Deming Institute, I wanna thank you again for this discussion. And for our listeners, remember to go to deming.org to continue your journey. You can find John's book, "Win-Win: W. Edwards Deming, the System of Profound Knowledge and the Science of Improving Schools" on Amazon.com. This is your host, Andrew Stotz, and I'll leave you with one of my favorite quotes from Dr. Deming, "People are entitled to joy in work."