Performance-Based Organizations (or PBOs) grew out of manufacturing into the technical sector. The message prompting the shift was "Hey, we tried this and got results." Unfortunately, no one communicated the details of those results - especially in IT.
I spent some time in manufacturing. As anyone who's been there can tell you, industry is demanding and very what-have-you-done-for-me lately in nature. Results rule each day.
The studies performance-based promoters seize upon are those conducted on the menial workforce. I do use the term "menial" in a derogatory fashion - I simply mean the work is done mostly by hand, foot, body, eye, ear, etc. If I'm going to offend you, it will be here: The work is repetitive in nature and therefore allows the worker to optionally engage in the work intellectually. In other words, performance-based work is that which focuses less on innovation and creativity and more upon, well, performance of a task.
When I was in manufacturing, PBO provided outstanding metrics for the shop floor: Widgets / hour, Defects / 1000, etc. When manufacturing leadership attempted to apply this new-found measurement methodology to knowledge workers it failed miserably. That part of the message isn't making it into the books I've read on the subject.
Don't be deceived - there are some recognizable acronyms among those proffering PBO to the software industry.
One application of PBO states your workforce can be divided into three categories: the Top, Middle, and Bottom performers. Typically, percentage weights are assigned to these categories, such as 20 / 60 / 20; meaning there's a Top 20, and Middle 60, and a Bottom 20. The wisdom is you can train your bottom 20% all day long and not receive near the return on investment as you would if you trained your top 20%. There are studies to back this - involving menial tasks. The least menial - and coincidentally most quoted - is a study involving copy readers. Reading copy is menial (no offense to my editors). Writing copy is creative and innovative. I'm not judging menial work - nor those who perform it - as something - or someone - less; I'm merely stating the two types of work are different.
I am further stating you cannot accurately measure different types of work in the same way. Here's why:
- How do you score innovation?
- What about the ability to write code or design a solution that's easier to maintain?
- How do you weight inspiration?
- How about someone who motivates? or invigorates the workplace nearly every day with a combination of vision and mentoring?
How do you effectively and consistently measure these? The short answer is you can, but you truly must weigh the results.
Returning to 20 / 60 / 20: If 80% of your workforce is failing to perform, who's to blame? Did HR hire the wrong 4 out of 5 people? or did HR get it right and the workforce is being horribly managed?
Also, the PBO philosophy presumes the workforce enjoys a Darwinian business climate. A friend in a PBO once remarked to me, "I'm in a competition with members of my own team: a competition I didn't want, I don't need, I did not ask for, and that I cannot escape."
There's a word for people who enjoy a more Darwinian business climate - they're called entrepreneurs. Entrepreneurial pursuits are credited with all innovation. This is simply untrue.
There are plenty of talented people working within large corporations who are as - if not more - creative than their self-employed peers. Part of this is likely due to the fact they're more rested. These innovators work best within the social and economic surroundings offered by corporate culture. They desire to expend all their intellectual capital on more scalable architectures and less tightly-coupled systems, rather than burning creative clock cycles on cashflow and business management. Again, one's not better than the other - they are merely different - except on the scales of a PBO.
...a lighter subject next time, I promise...