Pay and Profit Sharing

[John <jsdwd@ispwest.com>]

Hi,

I think what Deming was against was the numerical rating and ranking of
performance.  Any 'pay for performance' scheme has that as its basis.  It
assumes that everyone's performance is not the same and that people should
be paid differentially according to each individuals 'performance'.  That
requires measuring  performance (impossible to do in any quantifiable way -
essentially a measurement problem) and rating or ranking individuals  in
order to determine who gets more and who gets less.

Profit sharing is not based (necessarily) on rating and ranking.  It might
be that a pool of profit is identified and split equally among employees or
divided according to current percentage of total compensation, or whatever.

A profit sharing scheme that shared profit in some way that had as its basis
rated and ranked individuals would be subject to the same objections as pay
for performance I would think.

John S. Dowd
jsdwd@ispwest.com