Five classic stories in performance management

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This post was last edited by Outsider on 2017-12-15 at 16:23. First story: The story of Tang Seng and his disciples. Tang Seng’s team is a well-known group that is often used as an example in lectures, but it seems that the performance management in this team is not very effective. Let’s take a look at their story of cost-efficiency management. Well, Tang Seng’s group was on a flight for a trip, when the plane developed a malfunction and they had to parachute. Unfortunately, there were only three parachutes available for the four of them. To ensure fairness, the master conducted tests for each disciple; those who passed the tests would get a parachute, while those who failed would have to fall freely, diving headfirst. So, the master asked Sun Wukong, “Wukong, how many suns are there in the sky?” ”Wukong replied without hesitation, “One.” The master said, Good, you got it right; here’s one for you. Then he asked Sha Seng again: How many moons are there in the sky? Sha Seng replied: One. Okay, that’s right too; here’s one for you. When Bajie saw this, he was secretly pleased: Ahaha, it’s so simple; I can do it too. So he got ready, waiting for the master to pose a question. Once the master did, Bajie jumped down. Do you know why? The master’s question was, “How many stars are there in the sky?” ”Pig Bajie was stunned on the spot and jumped down right away. This is my first trip. A few days later, the master and his three disciples took a flight on another trip. Along the way, the plane encountered problems again, and there were only three parachutes available. The master did as he had done before and posed a question to them once more. He first asked Wukong, \"In which year was the People’s Republic of China established?\" ”Wukong replied, “October 1, 1949.” ”The master said, “Okay, here’s one for you.” ”He asked Sha Seng again, “How many hundred million is China’s population?” ”Sha Seng replied, “1.3 billion.” ”The master said, “Good, you got it right.” ”Sha Seng also got an umbrella. It was Bajie’s turn, and the master asked, “What are the names of the 1.3 billion people?” ”Bajie fainted at that moment, ending his journey once again through free fall. On the third trip, the plane malfunctioned again, and at that time Pigsy said, “Master, stop asking; I’ll jump.” ”Then he leaped forward, and the master clasped his hands together and said, “Amitabha; I had no idea that there would be four umbrellas this time.” ” Zhao Rilei’s comment: This story illustrates that the setting of performance evaluation criteria should be within the scope of employees’ capabilities – something they can achieve with a little effort. If employees keep trying yet still cannot reach those goals, their confidence will be lost, and the evaluation criteria will lose their original purpose. Many companies, when setting performance metrics for their employees in a temple-related context, prefer to use high targets in order to put pressure on them. The assumption behind this approach is that if the targets are not set high enough, employees will lack the motivation needed. Additionally, by setting very high targets, even if an employee achieves only 80% of those targets instead of 100%, it still represents far more than what the company expects. This logic is that of a robber; it reflects the incompetence and helplessness of managers, who resort to setting high targets in order to pressure their employees. What they fail to realize is that it are the action plans behind these targets that truly help employees achieve their goals, rather than the target values themselves. In fact, the true value of a manager lies in setting target values that an employee can achieve through effort, then helping the employee develop action plans to reach those goals and assisting them in achieving them. Only by doing this can a manager fulfill the goal of helping employees grow, and only then can their true value be demonstrated! The second story: The power of institutions. This is a famous example of institutional development in history. At the end of the 18th century, Britain **decided to exile all British criminals to Australia. Some private shipowners contracted to transport prisoners on a large scale from Britain to Australia. The approach adopted in the UK is to have the number of criminals on board cover the costs for the shipowner. At that time, most of the ships used to transport prisoners were converted from old cargo ships; they had minimal equipment, no medical supplies, and no doctors. In order to make excessive profits, shipowners packed as many people as possible onto these ships, resulting in extremely poor conditions on board. Once the ship set sail, the shipowner received ** money per person, without caring whether those people would be able to survive the long journey across the ocean and reach Australia. Some shipowners, in order to cut costs, even deliberately withhold water and food. Three years later, the UK **discovered that the death rate among prisoners transported to Australia on ships was 12%; on one of the worst-affected ships, 158 out of 424 prisoners died, resulting in a mortality rate of 37%. The UK **spent a large amount of money, but failed to achieve its goal of attracting a large number of immigrants. The UK **has tried many methods. Each ship was assigned a *** officer to supervise, along with a doctor responsible for the prisoners and medical care; strict regulations were also set regarding the living standards of the prisoners on board. However, not only did the mortality rate not drop, but some supervisors* and doctors on board also died under mysterious circumstances. It turns out that some shipowners, in pursuit of huge profits, bribed officials; if those officials refused to collude with them, they were thrown into the sea to feed the fish. **Supervision fees were spent, yet deaths continued as usual. **New measures were taken to gather the shipowners for training sessions, educating them to value their lives and to understand that going to Australia for development served Britain’s long-term interests, and that money should not be considered more important than life. Yet the situation did not improve, with the death rate remaining high. A British MP believes it is those private shipowners who are taking advantage of loopholes in the system. The flaw in the system is that **the compensation given to the shipowner is calculated based on the number of people on board**. He proposed starting with a change to the system: **compensation should be calculated based on the number of people who arrive in Australia, regardless of how many people are onboard in the UK; the compensation is paid after counting the number of people who arrive at the Gulf.** The problem was solved easily. The shipowner volunteered to have a doctor on board, to prepare medicines, and to improve living conditions so that as many people as possible could reach Australia in good health. One person means one source of income. Since the implementation of the ashore counting method, the death rate on board has dropped below 1%. Some ships carrying hundreds of people sailed for months without a single death. Zhao Rilei’s commentary: This story tells us that the guiding role of performance evaluations is very important. A company’s focus on performance determines the behavior of its employees. If a company views performance evaluations as a tool for punishing employees, then employees will strive to avoid making mistakes, ignoring creativity. Without creativity, it is impossible for the company to achieve strategic growth, and thus its goals cannot be fulfilled ； If a company’s performance focus is on achieving its organizational goals, then employees’ behavior tends to align with those goals. They break down the organizational goals, understand the intentions of their supervisors, and develop practical plans. By acting as performance partners with their managers, they make continuous improvements, ultimately contributing to the achievement of the organizational goals. Third story: The mice stealing oil. Three mice went together to steal oil. They found an oil bottle, but its opening was too high to reach. The three mice decided that one of them should stand on the shoulders of the other two, so that they could take turns going up to drink. Just as the last mouse managed to climb onto the shoulders of the other two, for some reason the oil bottle fell, alerting someone, and the three mice fled. Back in their nest, they held a meeting to discuss why they failed. The first mouse said that it hadn’t drunk any oil, and that it had knocked over the oil bottle because it thought the second mouse had trembled. The second mouse said, \"I shook because the mouse at the bottom also shook.\" The third mouse said, That’s right; I seem to have heard a cat’s voice, that’s why I’m trembling. So the three mice laughed, saying that it seems it’s not our responsibility after all. Zhao Rilei’s comment: The purpose of performance evaluation is to improve performance, not to determine responsibilities. When there are issues with performance, the focus should be on how to improve it rather than on assigning blame. It is people’s habitual mindset to first determine responsibility before discussing improvement strategies. When our focus is on effectively assigning responsibilities rather than on making improvements, the result is that blame is shifted to others; no one within the company takes any responsibility, and in the end the customer is left ignored. By the time the responsibilities have been clarified, the customer’s patience has already run out completely. As a result, customer satisfaction and loyalty also disappeared, and ultimately the company lost its source for achieving financial goals, leaving shareholder value unattainable. Fourth story: Mine explosion in Russia. At a quarterly performance review meeting for the company, Marketing Manager A said, \"Sales have not been very good recently. We bear some responsibility, but the main blame does not lie with us; our competitors are introducing new products that are better than ours.\" So it’s difficult for us as well; the R&D department needs to conduct a thorough review. Manager B of the R&D department said, \"We have released few new subnet mask products recently, but we are also facing difficulties.\" Our budget is too low; it’s an extremely meager budget, and it has even been cut by the finance department. How can new products be developed without money? Finance department manager C said, \"I have reduced your budget, but you need to understand that the company’s costs keep rising, so of course we don’t have much money to allocate to the R&D department.\" Purchasing department manager D said: Our purchasing costs have increased by 10%. Do you know why? An iron chromium mine in Russia exploded, leading to an increase in the price of stainless steel. At that moment, the three managers of ABC said together, \"Oh, I see. In that case, none of us really has much responsibility, hahaha.\" HR manager F said, \"In that case, I can only go and assess the mines in Russia.\" Zhao Rilei’s comment: This is the corporate version of the story about a mouse stealing oil – what a vivid illustration of safety issues. Read the story and think about yourself; isn’t it time to change your way of thinking? Fifth story: Close your curtains. It is said that the famous Jefferson Memorial in Washington Square, United States, developed cracks in its walls over time due to age. To protect this building properly, relevant experts held specialized discussions. Initially, it was believed that the culprit responsible for damaging building surfaces was acidic rain caused by erosion. Further research by experts revealed that the most direct cause of wall erosion is the acidic effect on the buildings caused by the cleaning agents used to wash the walls on a daily basis. And why do we need to wash the walls every day? It’s because there is a large amount of bird droppings on the walls every day. Why is there so much bird droppings? Because many swallows gather around the building. Why are there so many swallows? Because there are many spiders that swallows love to eat on the wall. Why are there so many spiders? Because there are flying insects that spiders like to eat around the building. Why are there so many flying insects? Because flying insects reproduce very quickly here. The reason why flying insects reproduce so rapidly here is that the dust here is most suitable for their reproduction. Why is this place the most suitable for flying insects to reproduce? Because of the sunlight coming in through the open windows, a large number of insects gather there and reproduce at an extraordinary rate... It was found that the solution is very simple: just close the curtains in the entire building. The various complex and detailed maintenance plans designed by experts earlier thus became nothing but mere paper promises. Zhao Rilei’s comment: In \"The Five Disciplines of a Learning Organization,\" Peter Senge mentions that there are both \"fundamental solutions\" and \"symptomatic solutions\" to problems. Symptomatic solutions can relieve the symptoms of a problem, but their effect is only temporary; moreover, they often have the side effect of exacerbating the problem, making it more difficult to resolve fundamentally. The fundamental solution is the ultimate way to resolve a problem; only by thinking systematically and considering the whole picture of the issue can one discover the \"fundamental solution\". When dealing with performance issues, if we can think systematically through the maze of complexities, trace things to their roots, take an overall view, and identify the underlying causes, we can often achieve significant results with minimal effort. Just as with the cracks that appeared in the Jefferson Building, closing the curtains was enough to avoid repair costs of millions of dollars, something that those experts did not expect. When faced with a maze of problems, can you really draw your curtains?