Misconceptions about Deming

[James Robert Crow <jr1crow@mindspring.com>]

Hello Group:

Thank you for your many fine responses to the first post on this subject.
If any of you follow the US stock market you know that recently stocks have
been severly punished when they fail to "hit the Numbers".  This has been
very severe recently with drops of 15 to 20% being common place.  If you
owned one of those stocks possibly you wished that management would have
been more careful to "hit the numbers".

Deming was concerned about the long term.  In the chapter on Systems in the
New Economics he says that the goal should be optimization of the system
over the long term.  With optimization everyone wins, the company, the
stockholders, the employees, the environment, over the long term.

I believe what concerned Deming was the minipulation of the numbers to
cause the stock price to go up in the short term while underminding the
long term ability of the company to compete in the market place.  A few
years ago General Dynamics tied the bonuses of the management group to the
stock price.  They promply laid off 10 to 15% of the company.  These
savings went directly to the bottom line.  Wall Street loved it the stock
price went up and fat bonuses were paid.  You might also look at the
tactics of Chainsaw Al Dunlap.  He cut companies dramatically and once
again Wall Street applauded with much higher stock prices.  Could it be
that people are motivated by money after all?  One thing is for sure and
that is that Wall Street is motivated by short term money.  How well have
you done this quarter?

Next subject:

Deming's commentary on pay for performance is based on the implicit
assumption that the majority of people are intrinsically motivated and wish
to do a good job.  Furthermore, his commentary on abolishment of grades is
based on the implicit assumption that the majority of studient are
intrinsically motivated and have a desire to learn.  Neither of these
assumptions is always correct.  There must be some kind of system in place
that included the ability to manipulate the behavior of those who are not
properly motivated.

In your response please comment on why Deming was against pay for
performance, and grades in school.  There is more here than intrinsic vs.
extrinsic motivation.  Also please respond on how you work with the people
who fall outside the system.

[Moderator's Note:  I would ask that we keep this thread well grounded in
Deming's writings and teachings.  Tangents are so tempting...  ]