Unit 18 Motivation and Commitment

After reading this unit, you should be able to :

+ understand the principles and practice of motivation in a TQM environment;
+ grasp newparadigms about worker relations and management;
+ appreciate the need hierarchy and its connection to motivation;
+ know how rewards and punishments and performance
appraisal systems drive fear into the organization;
+ distinguish recognition and celebration, as & e r e from
rewards; and
+ understand the ways in which genuine commitment can be
generated in an organization.
s.hycturs
12.1 Introduction
12.2 Need hierarchy :Thresholds of motivation
12.3 Driving out fear
12.4 Reward and punishment
12.5 The trouble with performance appraisal
12.6 The approach to generating commitment
12.7 Pay structure
12.8 Participation by all
12.9 A new paradigm for workers
12.10' Acknowledgement, recognition and celebration
12.1 1 Selection, placement and promotion
12.12 The Canon story
12.13 Summary
12-14 'Key Words
12.15 Self-Assessment Questions
12.16 Further readings
In the previous two units offhis part, we deait with orgarisation cubure and leadership aspects of TQM. In
this unit we focus on motivation and commitment of the members of the organisation in h e context of TQM,
How do You motivate people? This is a fundamental question. Douglas McGregor, who wrote about
Theory X and Theory answered :''You don't." There are conditions under which people do feel motivated,
and conditions which debilitate or encumber them. In this Unit, we shall explore the concepts of moti-
vation and commitment from a TQM viewpoint.
TQM means that everyone, including workers, participate in making improvements, and is thus encour-
aged to develop his or her abilities continuously. This is a great source of motivation. When the polarity
between workers and management is removed, great energy is released.
Maslow's need hierarchy dearly shows that unless we close off our desires in the lower parts of the hier-
archy, self-actualisation will elude us, and we will remain victims of extrinsic motivation alone. There is a
lesson in this for organizations. An excessive emphasis on monetary aspects of employee management will
deflect people to money-mindedness, and thus block the motivation for realizing one's potential.
Reward and punishment systems drive fear into people and make them further dependent on extrinsic
motivators. Performance appraisal systems judge people unfairly and actually cause performance to drop.
Appraisals are often the backbone of personnel management,and a suggestion to abolish them is not easy to
implement.
Acknowledgement, recognition and celebration on the other hand can be positive forces in valuing peo-
ple, and thus they can generate deep commitment and joy at work.
TQM rejects many of the motivational tactics of companies.In fact, it rejects thevery idea of tactics when
it comes to people. We have to work with people in harmony with the Natural Law. When we do that, com-
mitment and motivation happen naturally.
In this unit we shall discuss all these aspects.

18.8 Weed Hierarchy :Thredibolds of Moeivation

Abraham Maslow showed in the 1950s that the needs of human beii~gsare cast in a hierarchy, at the low-
est end of which are physiological needs, such as hunger. When man is released from these, his other, more
social goals emerge. Above the physiological needs are safety needs such as security, stability, freedom
from fear, anxiety and chaos, the need for structure,~rderetc. Above these are needs for belongingness and
love such as relating to people, affection etc. Further up in the hierarchy are esteem needs those of self-
+spect as well as the respect for others. At the highest level is the need for self-actualization, doing what
me is really talented to do or is fit forUWhat humans can be: wrote Maslow: they musf do. They must be
the;* awn nature."
le hierarchy of needs is depicted in Figure 12.1
The hierarchy gives us the conceptual underpinning about motivation of people in an organization.
wevcr, it has often been misunderstood. Many manapers have believed that self-actualiation is only an
alistic state, not ever likely to be realized by ordinary people. Also, managers have focused on trying to ful-
le iower-order needs, and are surprised when their people never seem to be satisfied.
imagers aim to motivate people by 'rewarding' them with more pay if they worked harder or better, that
 I
Motivation and Cmnmltmmt

Belongingness

Safm

Phpiologlcal

is, they 'performed.' So pervasive is this belief that if you paid for performance, people would be motivated
to perform better, so much so that all findings to the contrary are ignored. In the need hierarchy, safety needs
are referred to as'hygiene needs.' They are required to be met. If they are not, they demotivate and dissatis-
~ If they are met, they do not motivate or satisfy, they merely stop demotivating. Frederick Herzberg, in his
well-known theory, showed that inadequate pay demotivates, more pay does not motivate. Inadequate pay
therefore is-onlya demotivator,and adequate pay not a motivator
Why then do we see so many instances in real life wherein workers and managers, who seem to be well-
paid by all societal norms, clamour for more, agitate and even cause work stoppages as they press their
demands?
I Here managers must introspect and look at the higher order needs. What opportunities exist
for satisfaction of belongingness or esteem needs, leave alone self-actualization? In many corporations,
the management systems thwart rather than enable the fulfillment of these needs. Working in systems
where one is neither rec'ognized nor allowed to contribute as well as one might, people experience a
strange uncomfortable situation their lower order needs to get stretched out, just as a tree blocked from
growing bends and grows sideways. In organizations which think, erroneously though, that money is the
principal form of motivation, people become moneyminded. They becom~erecklessly so, when their nat-
ural gowth is further stunted by the organization. Figure 12.2 visualizes this sideward pull on lower
order needs.
This does not mean that where the higher order needs are not beyond fulfdlment, people will automati-
cally be motivated to fulfil these needs.
Driven by fears and early-life feelings of insecurity,and conditioned by the school system and society,peo-
ple may become insatiable about their lower order needs. Thus, no am%unt of money may satisfy some peo-
ple. It may become an till-encompassing preoccupation. Or someone might be conditioned to crave so much
for recognition, that he unwittingly thwarts himself from pursuing the path of what he "can be".
V.S. Mahesh, in his book, Thresholds of Motivation, shows that everyone has the choice to stay with
lower order needs, or break out of it. What is required is the will, "a force that guides man's instinctive
 Self- Obttructlon to lulflllment
Est~ems of hlaher Mder needs
BelonOlngnen
Lower order need8
mt ttretehed out

thrust upwards to self-esteem and self-actualization." The will is used to impose a 'threshold limit' for
satisfaction of lower order needs so that a person can move up. Every individual who self-actualizes has
to set "adequately low threshold limits" on physiological, safety,belongingness and recognition needs. If,
within these limits an organization meets the needs easily, then the individual's 'striving upwards' can be
successful.
Businesses are wealth-producing and achieving organizations.Their success depends on their einploy-
ees being self-motivated to work to their potential. Their task is thus to create the conditi~nsnecessary for
individuals to work to their potential. This means that organizations need to control the sideward pull of
lower order needs of people rather than fan them with money-minded reward systems. Personal growth is
otherwise only a dream.

18.3 Drivingout fear

The eighth of Deming's fourteen points in relation to his quality philosophy states: "Drive out fear, so that
everyone may work effectively." Fear is built into organizations by reward and punishment systems, per-
formance appraisals, by bosses who get angry when bad news is brought to them, or who ask for explanation
of variances when faced with variations due to common causes. (Please refer Unit 7). When managements
are punitive (concerned more with who did it rather than what caused it), fear becomes pervasive.When jobs
are at stake, then fear becomes numbing. It is impossible to think of people realizing their potential under
these conditions.
Some managers daim that without some fear, people would not work to their best. This thinking is in the
"Theory Xn mould. People do seem, on the face of it, to produce quick results and meet deadlines, under pres-
sure, as for example, in an examination. However, there is evidence that when threatened, people will only do
what it takes to remove or dilute the source of fear. This is a survival response meant to ward off threat, not a
response for achieving greatness.
The main consequences of fear in organizations are impaired performance and false data. When in fear,
people do what pleases their bosses, and not necessarily what is good for the organization, say, satisfying a
customer. Such organizations are also full of false data and distortions, so that very little of true facts reach
the higher echelons.According to McGregor what could happen or found: "evidence of fudging of production
and quality data, misreporting of costs, and ignoring preventive maintenance.. ." Thus, the damage is not
restricted to false information, but to actual doctoring of systems (Joiner, 1994) as in delaying maintenance,
or passing defectives, or hiding a crucial problem which could blow up later. With fear lurking, such dys-
functionalbehaviour is rather common, in most corporations.
Fear further accentuates the tendency among people to look good, and thus promotes defensive and com-
petitive behaviour. These are not conditions coqducive to motivation or commitment.

Job insecurity
Throughorit the 1 9 9 0 companies
~~ have reduced their manpower, and this has gonfby the namecdownsizing'.
When faced with a crunch in business and profitability,many organizations look to cut their costs, and where
wage costs are high and sales volumes dedine, manpower is one of the first they cut.
There is mounting evidence that such downsizing actually hurts the organizations down the line, as cus-
tomer satisfaction falls off. The Economist, (October 7,2000) reports that Rick Thoman who became Chief
Executive of Xerox in 1999 instituted "staff cuts so severe that customer bills went uncollected.y'Xerox then
slumped and has gone into deep trouble.
Nevertheless U.S. companies have shed jobs by the thousands, and have, ironically, rewarded their CEOs
by millions of dollars for downsizing the organizations.
The essential TQM response to a crisis is to redouble the efforts towards building customer satisfaction,
with involvement of everyone. In 1932, Matsushita had been in a situation of having to lay off half the work-
force. He decided instead to ask everyone to go to the market and sell the products, and dear the warehous-
es. No one was discharged.
Given Indian laws, downsizing has been accomplished in both private and public sectors through what is
called 'voluntary retirement schemes' (VRS) by which employees get more than their statutory dues if they
would quit 'voluntarily'.
Job insecurity intensifies fear as nothing else does. Motivation plummets. The threat of losing a job and
the means to livelihood hits hard at the basic safety needs in the hierarchy, and the threat effectively blocks
progression to higher order needs. Even after implementingVRS, those left behind continue to live in fear. In
such organizations, it may take years for people to develop feeling of belongingness. Those who continue in
the organization therefore remain fixated to their safety needs, seeking money even more as an antidote to
their insecurity, and the organization starts believing that mdney is all that would satisfy people.
In a world class organization,great efforts at learning and education should be made in good times, so that
the company could deal with hard times more effectively,with everyone's involvement. If financial sacrifices
are to be made, the shareholders would do so first, then the CEO and the top executives and only lastly-the
other employees. This is in contrast to what happens people are deprived of their jobs, so that those remain-
ing, especially the CEO, could be paid more. One of the prime tasks of menagement, on the other hand, is to
protect jobs, so that everyone can contribute without fear.

Slogans
A subtle form of the use of fear as a tool is the use of slogans, posters and exhortations. The primary func-
tion of a poster is to ask someone else (say, the employee) to do or be something, or to warn someone.
Safety is often a favourite poster theme of hanagers, unaware of the fact that it is they who are responsi-
ble for promoting safety. Managers stick up posters which call upon workers to be more watchful, or
posters admonishing that "your loved ones wait for you." Government puts up signboards on roads warn-
ing that "the undertaker loves the overtaker? Slogans 1ike"Quality is in your handsnaim to make the work-
er feel guilty. But quality is not in the hands of workers. Most or even 90 per cent of it depends on
managers.
Slogans, posters and exhortations unwittingly tell the workers that the management had no due about
what could be done about the real problems, and hence, demoralise them. In any event, the messages are
addressed to the wrong group they should be addressed to the managers !
Managers defend posters by saying that they are building 'awareness' among workers. If they are, it is a
poor way of doing it, as posters are made up of smart statements without concrete methods, and addressed
to people who cannot do much about them. In any case, slogans and posters achieve no results at all, most of
the time.
The conditions under which posters work are those in which management deploys its plans throughout
the organization by methods that address real causes, and attaches'brands' or slogans to these concrete pm-
grammes, so that the programmes cat& the imagination of everyone. For example, in six-sigma pro-
grammes, each level of training is denoted in Judo terms, by the colour of belt.

Stress
The modern industrial world produces considerable amount of stress among its managers. As competitive
pressures on organizations rise, managers ate under constant pressure to deliver results. The pressures can
often be unhealthy and unreasonable.
Thus, a sales manager could be under great pressure to meet sales targets month to month, even though
the organization has the requisite product quality, or a good delivery system. It may be short of staff or lack
training. The sales manager may be seen as bffering excuses if helshe points out these lacunae. The organ-
ization may be unaware of the real conditioris and be ignorant of the way to improve its products or deliver-
ies. Worse, the sales manager may get shouted at by an ill-tempered boss raised in the Theory X school. The
sales manager might find himselflherself working harder and harder but still slipping. The tensions mount,
and manifest themselves in physiological disorders and even family stress.
Young people too may fall into a whirl of activity,working long hours, and neglecting their health, and suf-
fer 'burnouts.' A burnout is a sign that the workplace is damaging rather than nurturing. One is used up,
rather than growing.
Courses on 'stress management', yoga and meditation classes, and interventions of clinical psychologists
help, but do not address the source of the trouble in the organizations.
Stress is also produced by having to explain variances which actually arise from common causes (and
hence no possible &planation). The reward and punishment systems built on stress may threaten the self-
esteem of managers. The fear of losing one's job is of course a big threat for many.
Stress is hardly the foundation on which to build great organizations or create motivation. Stress forces
people to behave in a distorted manner, by producing short-term results, manipulating people and cus-
tomers, fudging results, doctoring systems apd so on. None of these is constructive.Managers might, howev-

80
 Motivationand Oommttmaak

er, mistake the extreme hard work people seem to put in under these conditions. The frenzy of activity could
be taken as a sign of how people respond only under fear and stress. But behaviour under stress is an abnor-
mality. It is pathological, and should not be misunderstood as motivation or commitment to work.
In short, fear diminishes people's potential, and shut. off their striving upwards.

18.4 Beward and Punishment

That people perform according to what is rewarded or punished is a belief held by most managers to be a
self-evident truth. Therefore proof is sought when their belief is challenged. In fact, a whole lot of research
findings have proved that rewards and punishments, if not appropriately practised, could cause damage
rather than motivate people.

IxMnriaandIntrbdoMotira~
The main question is whether motivation is created from outside of the individual or from within. If the
assumption is that the motivator is outside, or extrinsic, then it means that what is being offered as motiva-
tion (money, recognition etc.) are more valuable to the individual than the achievement of the task itself
, (which when dependent on rewards may become inherently distasteful). To make the reward even more valu-
able, punishments (less money, withdrawal of reward, reprimand etc) are instituted. Thus rewards and pun-
ishments are, in the words of Alfie Kohn, "two sides of the same coin." Rewards and punishments are also
compared to the proverbial carrot hung in front of donkeys to'motivate' them to move, and the stick which is
wielded from behind (punishment for not moving). Thus the carrot-and-stick policy basically treats human
beings as jackasses.
One nason for the pervasiveness of rewards and punishments is that they seem to, at a certain leve1,work
! Students work hard to do well in their examinations, and get good marks, employees seem to obey discipli-
nary rules, and managers seem to turn in what is asked of them. To a,point, therefore, the system may seem
to bring positive results.
However, what rewards do is to motivate people to do just what the system rewards. Thus students may
work for good grades rather than for real learning, and executives may deliver just the rewarded result
while neglecting the long term, e.g., not cooperating with others. They may just negotiate 'safe' and
mediocre goals. "When we are working for a reward:' wrote Kohn, "we do exactly what is necessary to get
it and no more."
Kohn asks again:"Do rewards motivate people ?Absolutely.They motivate people to get rewards.''
When people "are applying themselves to a task due to extrinsic motivators,"the quality of performance
can be expected to be of a relatively inferior level." The reasons for poor results, ar:ues Kohn, are that under
extrinsic motivation, people "avoid taking risks and exploring ideas in a way that is necessary for creative
problem solving. .."
Do people need to be externally motivated?After al1,children seem to do very well in displaying an inher-
ent drive to try and succeed in a task. ''One is born: wrote Deming,"with intrinsic motivation, self-esteem,
dignity, cooperation, curiosity, joy in learningVn
Intrinsic motivation, as the name suggests, is inherent in all people for,% the need hierarchy shms,every-
one has a need to self-actualize,be what one can be ! So what extrinsic motivators do is to pull the individ-
ual sideways, and to further stretch hislher recognition, hygiene needs. Mahesh concludes that "intrinsic
motivation leads to relatively superior performance."
What is worse, constant exposure to extrinsic motivators may be dangerous to the individual. Grades,
merit system, incentive pay etc, which Deming called "forces of destruction:' tend to inevitably "crush out
joy.. . Extrinsic motivation gradually replaces intrinsic motivation, self-esteem,dignitynMahesh shows that
"the introduction of extrinsic motivation negatively affects the level of intrinsic motivation previously pres-
ent."
Managers who are serious about building great organizations will therefore do well, in Henberg's words,
to "not motivate employees by giving them higher wages, more benefits, or new status symbols,"because peo-
ple really "are motivated by their own inherent need to succeed at a challenging task."

Insentive Pay
The reward and punishment system, rests on "paying for performance" or providing financial incentives for
turning out desired results.
The earliest form of incentive pay in industrial organizations was the piece work system in which each
worker was paid according to the quantity of his output. Frederick Taylor 'improved' the incentive system by
ensuring that management first designed and set the standards under which work had to be performed, and
then the worker who did more was to be paid more.
In subsequent ye: rs,incentlve systems became more sophisticated, as industrial engineers moved in, with
their improvement tool kits and stop watches,
The incentive concept has its basis on the work of 'behaviourists' like Skinner who showed how human
beings could be conditioned to respond in desired ways, and they 'proved' this by rewarding animals for spec-
ified behaviour. "Industrial engineers developed incentive schemes", writes Mahesh, "that would have man
paid for by the number of goods produced, exactly as a pigeon earned food by pecking at illuminated discs."
Thus, reward and punishment schemes are grounded on a model "that conceives of motivation as noth-
ing more than the manipulation of behaviour" (Kohn).
Incentive systems resulted in many unforeseen bchaviours the most common of which is "deliberate
restriction of output." Frederick Taylor had called this "soldering", or "loafing." He had hoped to overcome
it through more standardized work processes and greater supervisory presence on the shop floor. In India,
incentive schemes have been the single biggest cause of ceilings imposed by workers on output, and for lack
of improvements in productivity. They have also been the cause of industrial strife, as the newspaper report
in Box"l2.1 shows.

7
I
Box 18.1: Z@wapamheadline on Bqjqj Auto 8trflre
Produddon of one Rxasr Bike let to B 4 4 Auto Strike
The production of an"excess" motorcycle has resulted in the disruption of operations at Bajaj Auto Ltd's
factory. The workers' union alleges that contrary to production norms, 176 Kawasaki-Bajaj four-stroke
motorcycles were produced in the Erst shift on December 19.
Sources close to the union said, as per an agreement, only 175 motorbikes are to be manufactured
in each shift.

R2
 -'p.- and aomlatment

Incentive schemes originate in the basic lack of trust and communication bermtn managers a d work-
ers. Ignorant of ways in which workers feel self-motivated to improve productivity and quality, managers
hope to manipulate workers into producing more in exchange for more money. This in a way adve~isesto the
workers that the managers did not know their jobs, and did not know how they might increrse output or
quality managers merely hope that workers could'somehow' do it.
Not ody wrkers, mmagers and even teachers an subjected to incentive pay. For managers, the incentives
take the lorm of performance bonuses or stock options. These are far more common in the U.S., than, say, in
Germany or Japan,but they are quite common in India as well. Curiously, the quantum of performance pay as
a proportion of total pay increases, as one goes up in the hienrchy ! Thus LEOSare likely to haw a much larger
fraction of performma-based payments in their total pay than their managen do. Most managers who have
risen to the top would have done so by responding efkctively to the system of extrinsic motivators, so it is nat-
ural, as Henberg said, that they "offer their own motivational characteristics as the pattern to be instilled in
their subordinates.''
Sales employees are subjected to incentive-related payments in the same way as factory workers are. This
again stems frcm the belief that salesmen would work harder and sell more aggressively if they stood to earn
more by doing so. Such schemes also result in distortions (as in the shop floor) as salesmen and their man-
agers foist inappropriate products on customers (who realize it later) or dump products at month ends, or

-
discount their prices to push volumes.
Even teachers are not exempt frcm the pay according to output, with disastrous consequences, as the fol-
lowing newspaper report on teachers reveals. (Box 12.2)

BOX 1a.a: a r m p ~ ; p ~ on mw
of rnrmr
Teaohm blonn the Whistle on OBSB Evaluation
The teachers were expected to evaluate a minimum of 25 answer scripts. The time allotted for correct-
ing a script is too short. The more answer scripts you correct, the more money you make. That is why
when scripts are examined on demand for retotalling, thousands of scripts are found with answers
which have not been awardedany marks.

When confronted with facts on how incentive schemes distort behaviour and cause damage to khe organ-
ization, managers usually respond by blaming the design of a particular incentive scheme. hey believe that
with ingenuity they could design a'perfect'system which would eliminate the distortions. Thus incentive pro-
grammes of a staggering variety have been designed over the years. There are individual as well as team
based schemes, the latter in the hope that group incentive schemes would lead to better cooperation.
However, the fundamental concept behind incentives is flawed in its assumptions about human nature,
and so 'improving' a scheme is not a solution.What then is the answer ?
Abolish incentives, Deming had called out. What do you substitute it with, ask managers."~ubstitutelead-
ership," says Deming. Extensive use of incentives in itself is a sign of impoverished leadership which com-
promise on trusting the employees, and on designing work in a way that everyone could take pride in his or
her work. Leadership based on incentives succumbs to extrinsic motivators as the way of getting the people
to perform. Great leadership, on the other hand, requires no such crutches.
 But gnat leadership is much harder 'to practise than devising an incentive scheme. hat is why incentives
predominate in the industrial world.

18.8 The trouble with perfo-oe appr*

It is better not to make merit a matter of reward lest people conspire and contend.

Most companies have a system of appraising the performance of their managers, once every year. The
details vary from firm to firm, but the basic procedure is that the appraisee fills out a form which sets out his
achievements against his goals and then the immediate superior tills out his comments and also his evalua-
tion of the appraisee's traits - such as mental ability, communication, initiative, leadership etc. The two then
have a'feedback' session in which the appraiser is supposed to provide counselling and feedback at the same
time to the appraisee. The appraisal customarily determines the reward that the appraisee gets, and some-
times (with or without another 'potential appraisal') his promotion as well.
Why do corporations have a performance appraisal system ?
Typically, there are seven reasons adduced as being the purpose of the system.
1. Counselling, or providing feedback to the employee, so that he may improve.
2. Providing direction and goals to the employee.
3. Identifying training needs.
4. Fostering communication between superior and subordinate.
5. Aiding in career planning and development.
6. Providing a basis for promotions.
7. Differentiating between employees in order to reward differentially.
At the outset, these are too mady goals for single process. Peter Scholtes, a Deming follower, points out:
"Performance appraisal is a fragile cart asked to bear too heavy a load."
The unintended consequences of performance appraisal are many. It may demoralise people and damage
the organization.Thus, if motivation of people is our aim, we need to first understand the demotivating con-
sequences of performance appraisal. Deming, Kohn and others have pointed out these consequences in

a 0 ~ u e of
mperfoman@
~ rpprairrZ
It destrays teamwork, cooperation and harmony: Performance appraisal pays to compete and wonders
why cooperation is missing. It indvces people to seek individual gains often at the expense of others' gains or
of collective gains. It motivates each person or department to maximise hislits own results, even if the over-
all organization fails. For example, the purchase department gets a lower price from a cheaper source but the
production department could suffer production stoppages or downgrades, and the customer is dissatisfied.
The system underestimates the v~lueof cooperation to an organization's performance.

It forces people to live with re~iewerbias and prejudice: It is one of the tenets, according the advocates
of performance appraisal, is that it should be objective. The truth is that all judgements of people, by defi-
nition, are subjective, however much they may be based on data. The first effect to ward against is the
 Motivation and Oodtment
--
'Pygmalion effect', which is a self-fulfilling prophecy. The managers' own expectations influence the subor-
dinates' performance. If the expectations are low, performance is impaired, and if they be high, performance
improves. This is borne out by many research findings. Peter Senge calls it a 'ninforcing process' in which a
-
small change builds on itself, and snowballs, virtuously or viciously, as the case may be. David k a r n s for-
-
mer CEO of Xerox, talks of the'right stuff' attractive looks, articulation etc. influencing the appraisal. The
evaluation of an individual is always coloured by reviewer's bias, either favourably or otherwise.
In order to remove the effect of bias and other problems, in recent times a 360" feedback that is, feedback
from selected colleagues and subordinates in addition to superiors has been proposed. While this has the
merit of giving many viewpoints to the appraisee, it does not answer other ohjections to the system of
appraisals. It also does not answer the problem that the appraisee can benefit from it only when helshe seeks
it, not when it is given,

It promotes quick-fmes and troubleshooting, over prevention: The system tends to reward visible
results, which means that troubleshooting or firefighting catch attention better than quiet work, even if
the troubleshooters created the problem in the first place. It induces managers to take short: cuts and
adopt quick-f~esto overcome a problem and to get on. The real improvements required by a company
get relegated, as these require quiet prevention in which there is no glory in the appraisal system.

It promotes negotiation of safe goals, hence fosters mediocrity: When an employee's status, esteem and
rewards are linked to performance, it is to be expected that helshe negotiates goals reckoned to be safely
achievable. Goals then carry 'cushions'. When even these goals are not achieved;people may resort to doctor-
ing the system itself in order to show good results. When people are in such a defensive mode, they are unlike-
ly to set challenging goals which have possibilities of failure. Yet, the success of an organization depends on
its ability to achieve challenging goals consistently,even if it means occasional failure.

It induces fear and stress: The system spreads fear (of being rated unfairly or poorly) which impairs per-
formance, and induces dishonest reporting. The boss becomes the customer, and the ' real customer'suf-
fers. It promotes a culture of flattery and politicking and discourages people from challenging the boss. It
stresses people who are constrained to fight the stigma of being rated'below average'. People are compelled
to over-rate themselves during self-appraisal, and this leads to more arguments and stress.

It promotes a short-term focus: Current results predominate over what is good for the customers dnd ',he
. organization in the longer run. vpical'doctoring'in corporations include sale of substandard quality to meet
quarterly goals, changing the inventory valuation, pushing sales to companies at month ends, producing for
stock, not reporting non-conformities etc.

It makes people money minded: Controlling managers stoke the insecurities of the people so that they may
control their threshold strings even more. The system assumes that people work for money, and creates a con-
text that fulfils that prophecy, People subjected to constant extrinsic motivation sumumb to it, and appear
money-minded, which confirms the managers' original view that people work mainly for money. Under these

65
 -
conditions (Theory X), wrote McGregor,beople will make insistent demands for money:'
The basic problem of performance appraisal is that it puts people constantly on judgement. When people
feel judged, it encumbers them; and they are not free to exercise their talents and realize their potential. It also
foxes the supervisor to be a counsellor and a judge who rewards or punishes at the same time. These two
roles are seldom compatible and hence heal counselling rarely takes place.

Can perform an^^) be cmal1111M?

Above all this, we have to examine whdther it is possible at all to evaluate an individual's performance in an
organization.There are several reasons to doubt it.
1. Every individualfunctions a purt of a system. The system comprises the inputs required for a job,
and the policies, equipment, mefhods, people, materials and resources, and the measurement system
itself, as can be seen in Figure 12,3.

(Measurement)
M?n Machine
(People) (Equipment)

The different elements in the performance system interact with each other. It is a superstition to believe
that the interactions can be Accounted for, and that contribution of an individual can be precisely
extracted, measured and judged.
In defence of appraisal systems, managers argue that they take into account these 'extraneous' factors in
assessing performance. That argument misses the point. The factors are not extraneous at all. They are
as intrinsic a part of the system as 'man' himself.
2. It must not be forgotten that the purpose is to raise the performance of the organization as a
whole, and of its people, and not simply to measure an individual's output. The point is that the sys-
Ststem A System B
(Poor system) (Superior system)

* Performance +
- more

mgum l R 4 : s y s t m u c m d p e r r ~
 tem makes the man."When placed in the same system," wrote Senge, "people, however different, tend
to produce similar results.'' "94% of the problems," wrote Deming "are created by the system." If the
system is transformed, everyone's results would improve by a large multiplying factor. Ten fold or
twenty fold, for example.
The performance of people in a given system may follow a normal distribution as shown in the
curve in the left side of Figure 12.4.When the system of management is improved,the whde normal dis-
tribution can shift right~ards,to higher levels of performance, though the individual variations may be
the same as in the graph at the left. Now, management can work on reducing the variability, so that indi-
vidual variations are reduced (the steep graph on the right).
Performance appraisal systems are designed without gnuping the principles of variation. All results
vary, within a range, even when the system is functioning as always. The variations are said to arise from
'common causes'. When managers are ignorant of this ,phenomenon, they attribute chance ups and
downs to real increases and falls, and praise or reprimand their subordinates.This leads to what is called
'tampering' with a stable system, which actually increases the variability of the system, as s h m in

(Increased variability

~ 1 & I : ~ ~ ~ ~ t
Thus the performance shows greater volatility when tampered with.
As you know, the variations in a common cause system do not represent real increases or decreas-
es. To be rewarded for a point is thus like winning a lottery Deming was provoked to point out :"Reward
for good performance may be the same as reward to the weatherman for a pleasant day."
Within the overall system, usually a team ofpeople produces a result, not an individual alone. The
output will depend on the effectivenessof the interaction and teamwork between them. The effect could
be negative, or positive.
Deming illustrated this by using an exampleI sim:Er to what follows.
Let us assume that A, B and C IT three men!~bersof a team. Their combined output will be equal to
contributions made individually and collectively, that is,
A + B + C + AB+BC+CA+ABC
Now AB etc or ABC may be negative or positive.
This illustrates the futility of measuring the output of A, B or C individually. There is a single equa-
tion with many variables. It is not possible to solve it.
Some firms have switched from individual appraisals to team appraisals.The above argument is not
really in favour of team appraisals, as teams too are part of a system.
Giwn that most people in a system fall in the central regions of a normal distribution curve, it would
 seem to stand to reason that, statistically,

No measurable dipences in performance can be detected for some 90% or even 95% ofpeople in
a system. What about the outliers, (Figure 12.6) those on the extremes on either side ?
Outliers could signify real performance differentials,or they may be the outcome of special causes
created by the environment or they may be in the wrong tasks, or the ones that suit them exceptionally.
While fitting tasks to suit talents is a wonderful concept, writing off people for being in the bottom 5%
is neither scientific nor productive. It is possible that the measurements were inaccurate, or that there
were special causes in operation.
6. Judginghow well an organization is doing is accomplished in TQM through control points of which you
learnt in Unit 10. The selection of control points requires skill, using the principles of TQM. Thedangers
of picking the wrong control points are well known. You have studied about it. Without a carefully
selected set of control points, it cannot be expected that performance will be well measured.
Moreover, the key to successful management of control points is the ability to take appropriate counter-
measures based on a grasp of the real causes. But, as Deming said,"giving a rating is a destructive sub-
stitute for dealing with real issues1'
Thus, there are many reasons to believe that performance cannot be evaluated to any degree of
meaningful precision.

Doe8 P ~ O ~Apprdmd Q Q meet ita goola ?

We had set out seven objectives with which organizations set up appraisal systems. Let us now evaluate if the
system achieves these goals.

Gosl Fedback to employees (Counselling)

Evaluation and counselling cannot coexist. Evaluation interferes with free communication which
is necessary for the appraisee to receive counselling. Most managers, in any case, lack counselling
skills. Also, once-a-year feedback is hardly enough for people to benefit and grow. The feedback is
largely based on outputs linked to individuals,and usually carries no credibility with the appraisee
who may also be compelled to engage in self-promotion which further vitiates the feedback.
Counselling can work only when it is sought, not when it is given unsolicited.
W: Giving direction and goals
It is quite ineffective to set goals through a one-on-one sitting with one's superior once a year. Goals
 Motivation and Obdkrrent

are accomplished collectively in an organization,and these must be set through the process defined
for control points (Unit 10). These goals must not be safe and mediocre., Rather they must be arnbi-
tious and challenging - something rarely possible under the appraisal system.

W Identifying training needs

As you would have read in Unit 11, performance appraisal is a poor way of determining training
needs, which must first stem from organizational needs. .

!&& Fostering communication

Far from fostering communication,the appraisal system causes its breakdown. Immediate super-
visors too try to earn respect by being pleasant and blaming the organization. Trust and security
are prerequisites for effective communication. Neither exists under a system of.evaluation.

Goal Aiding in career planning

Appraisal systems also create caste systems consisting of 'fast-trackers' and others. Claims are
made that people can be reassigned tracks.As with the social caste system. it doesn't happpn. The
system fails to realize that people can and do change a lot over a life time. People are also given
false notions about planning one's career, instead of developing one's personal mission for contri-
bution. The system encourages a mindless quest for occupying job positions, leading to burnout
and poor relationships. Rat-races are not conducive to people becoming self aware and making
commitments and contributing.

linald: Providing a baais for promotions

As the process is often vitiated, what surtaces is behaviour towards self-aggrandizement, and
maneuvering. Promotions shou!d be based on the ability to do the new job. Past performance is no
predictor at all of performance on a r y job. Linking the appraisal system to promotions fiirther
promotes boss-focus, at the expense of customers.

Gkd.3 Determining differential pay

Determining differential pay and rewards is the one goal in which the performance appraisal sys-
tem succeeds. Unfortunately, this has disastrous consequences for the people and the organiza-
tion. Teamwork is destroyed, and a rat-race substituted.
The problem L that most people cannot agree that differentials are fair. Managers are hard put
to defend them. People see no 'reason'. 'Bracket-creep'- a tendency to rate everyone'very good' -
sets in. This causes its own iibalance and the untenable situation is then 'corrected' or reset.
Managers are quite disturbed when they find that their subordinates are terribly upset even
though the differential in incremental pay was small. It is not the money, but the implication of
inferiority,a blow to esteem, that causes the upset. McGregor pointed out that with workers,'kmall
and apparently unimportant differences in wage rates can be subject of ... heated disputes. The
issue is not the pennies involved, but the fact (of) the status differences which they reflect.. ."
 Fairness is thus more imyc).rt2.~!than the absolute amount. However, the immediate aftermath
of the annual appraisal is the strong feeling of unfairness nurtured by employees.
The system, in the words of Deming,"leaves people bitter, crushed, battered, desolate, despon-
dent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rat-
ings, unable to comprehend why they are inferior."
. In the same vein, McGregor talked of "rationalization, defensiveness,inability to understand (and)
reactions that the superior is being unfair or arbitrary?
Thus, high motivation and commitment are not compatible with performance appraisal sys-
tems, and we must look to other ways of managing performance.
The foregoing discussidn may have given the impression that employees do not need any
counselling or help from their superiors. That is not true.What is needed is a healthy relation-
ship in which both sides feel free to talk straight. The need is not, however, for an annual feed-
back session, but for ongoing feedback, on a regular basis, as close as possible to the events
which call for intervention. When any behaviour or work is seen as ineffective, the superior's
immediate intervention is required in the form of a straight feedback. That does not mean a
reprimand. But the emplroyee needs to knowlshould know it immediately. Likewise, a job effec-
tively done shculd receive instant recognition, not just of the results, but of the process as well.
When confronted with the untoward consequences of performance appraisal, personnel man-
agers tend to believe that the fault lies with the design or implementation of a particular system,
and that it is not the fault of the concept, So they keep modifying the system. As this section has
attempted, however, the problem is with the concept of appraisal itself, not its modes of imple-
mentation.

18.6 The approaa to generating mmmitmen$

, Every organization would ideally have people who are aligned to the organization's mission and are commit-
ted to achieving extraordinary rdsults. Generating the level of motivation and commitment for everyone in
the organization is possible only' when we apply fundamental principles to the management of people. It is
impossible when we apply quick-fuces or otherwise try to manipulate people to behave in any particular way.
This means that managers must create conditions in which people feel committed and self-motivated.
The first step is to understand what people need or expect from an organization. Based on the need hitr-
archy, we can list seven basic people needs.

1. Securing economic well baing (Safety)

2. Working together in harmony (LOV;and belongingness)
3. Experiencing trust, caring and responsiveness (Love and belongingness)
4. Experiencing pride and joy (Love and belongingness)
5. Being acknowledged and recognized (Esteem)
6. Making extraordinary contributions (Esteem, self-actualization)
7. Learning, gaining mastery (Self-actualization)
 Hotivath and Commitment

"The young men and women," wrote Matsushita, "who join a company that has a personnel policy
designed to enrich their human potential are fortunate indeed."
What inspires people ? What makes people work hard, purposively, creatively and competently, without
burning out ? We have already learnt that trying to motivate people extrinsically works at best in the short
run, and inevitably produces damaging consequences. We know that people cannot be 'motivated', they can
only motivate themselves. So we need to create the right conditions or the context in which people can tap
their intrinsic motivation. Simultaneously,we also need to wean people away from the diet of extrinsic moti-
vation they have been subjected to from childhood.
Of the seven needs listed above, the first, economic well-being, is a safety need. Its absence demotivates, its
presence does not motivate. We well discuss this further in 12.7.
The next three are social needs. People feel committed in situations when they feel they can work togeth-
er in a team in cooperation and harmony with others. Competitive environments on the other hand could
lead to destructive and self-preservative behaviours, and breed fear, the effect of which we have already
understood. People need to be able to seek and get support from others as well as give support. Gallup,a U.S.
organization that specializesin surveys,asks questions such as:"Are my co-workerscommitted to doing qual-
ity work ?" and "Do I have a best friend at work ?"
People also need to know that they are trusted by their immediatcsuperior, and by the organization in
general. Without trust, there is no viability to an organization. An atmosphere of distrust creates an
u@ealthy pathology in the people working in it. People also need to know that the boss and the organization
care about them, as persons. And the organization's administrative departments and others must be respon-
sive to the pains and inconveniences of its people, and to their dreams and aspirations.
Everyone has the right to feel proud about hislher work, and experience joy in the workplace. Without
these, commitment is not likely to be generated.
Fulfilling needs 2,3 and 4 mean that the organization must communicate vigorously and continually at
all levels, sharing its values and principles as well as the developments occurring in the company, and
address the concerns of the people. Without such constant communication based on trust, gallery talk,
rumours and other destructive behaviours could corrode the organization. Communication is one of the
parameters judged in the Business Excellence model of CII. Needs 2,3 and 4 are fulfilled by many of the
points covered in units 10 and 11. The first of these is leadership. When people are aligned to the values,
philosophy and mission of the company, they can experience belongingness,?ls reflected in pride and joy.
It is through leadership that teamwork, cooperation and harmony are generated. In TQM, the cooperative
efforts of everyone, that is, participation by all, is a basic condition to be established. Bridging the divide
between workers and managers is another. We discuss all this in sections 12.8 and 12.9.
The fifth need is 'to be acknowledged and recognized', and this we will cover in section 12.10. This meets
the esteem needs of people. When the esteem of a person is undermined, the person becomes incapable of
functioning normally.We need to preserve and nurture the self-esteem of people. Needless to say,we can only
do this when the negative conditions, which build up resentments in people, or makes them feel that the sys-
tem is all unfair and arbitrary, and worse, instills fear into them, are eliminated.
The sixth need is 'to be able to make extraordinary contributions.' This starts with leadership defining
current reality as it actually is, and demonstrating constancy of purpose (Unit 10). The leadership has to set
goals which challenge the abilities of people, under a mission which is larger than the individual (Units 10
and 1l).Also, the ability to contribute is most significantly impacted by the system, its aims, policies, process-
es, and so on. It is leadership's task to create systems which enable people to achieve extraordinary results. On
a day to day level, people also need to be clear of what is expected of them. They need training to enable them
to learn how to do their tasks, and the teamwork to make it all possible. Finally, they also need to be given
jobs which fit their talents. The recruitment, promotion and placement policies need to be such that people
can grow. This we shall cover in Section 12.1 1.
The seventh need is 'to be able to learn and gain mastery', at all times. This is a self-actualization need,
described in Unit 11. Gaining'personal masteryJ should be one of the purposes of the educatio; system.
This therefore is a brief description of the framework or conditions in which people can blossom and exer-
cise their full potential in an atmosphere of trust, care, pride and joy, This is also a description of conditions
in which people can be tough with themselves when they need to be, bringing to the fore their powers of self-
discipline.

18.7 Pay structure

We have seen before that inadequate pay demotivates, but more pay does not necessarily motivate. he quest
to motivate or retain people primatily by paying more has worked nowhere. On the contrary, severe union-
management confrontations have been commonplace where pay exceeds local 'market' rates. So the level of
pay is ideally one that is around current 'market'levels, tempered with special high or low expectations from
the nature of the business or the company.
The structure of the pay, however, could have a significant impact on motivation and commitment.
As we have already seen, a pay scale weighted heavily on incentives or performance bonuses fans extrin-
ic motivations and dampens intrinsic motivation.
Also, a pay system that differentiates between people through the appraisal system, is seen to be unfair,
nd may demo'tivate people.
Given these, the question is: are there ways of structuring the pay so that it does more for the employees?
ompanies in the U.S. tend to pay everything in cash, and let the employee decide how to use it. At the other
treme is the Indian Government, where much of the pay is in kind, in the form of benefits such as admis-
sion to schools, housing, interest free loans, government medical service and so on.
In a culture like ours, an intermediate solution may be desirable. We can define the goals of the pay struc-
ture in the following terms
1. Provide a standard of living that is close to the expectations in the immediate society,
2. Enable the building of some wealth, especially as there is no security otherwise.
3. Meet contingent needs such as medical expenses of the family, including those that arise post retirement.
4. Reward long service. This lnay not be a need for many, especially in the info tech sector, but could be a
strong factor In retaining people in the manufacturing sector.
5. Share gains. We need a structure in which the gains are shared in good times, with some of it put away
for hard times. (This is not to be confused with incentives).
The pay structure, well designed, can provide a base on which people are motivated to pursue their high-
er order needs.
18.8 Partidpath by all 1
Total Quality Management (TQM) means quality management by everyone. Thus the participation by every-
one in improvement activities is an inalienable feature of TQM. It might seem that participation by everyone
is obviously good for the organization as well as its people, but this has by no means been the common view,
for long.
McGregor wrote in 1960 thatl'some critics of participation.. . see it as a form of managerial abdication. It
is a dangerous idea that will undermine managerial prerogatives and almost certainly get out of control."
Particip~tionhas also been a trick managers use to give people'a feeling of importance' or 'a sense of par-
ticipation'.
On the other hand, ever since QC circles were launched in 1962,TQMhas been a management method rely-
ing on the contributions of all members. Under TQM, everyone receives continuing education. Processes must
be standardized,so that greater responsibilities can be undertaken at lower levels, and authority delegated.
Kaizens, or small improvements, are turned out by the thousands. Probleps are solved cooperativeiy. Even
under policy management which deals with breakthroughs, control points are deployed all the way down,
sometimes down to QC circles. TQM thus aims to combine the power of all the employees in order to make a
strong company that can survive and prosper.
The word "empowerment" has gained ground in recent years, meaning that people should be given more
power to decide how their work should be carried out. This is not really a new concept. Wrote McGregor :
"Participation.. . is a special case of delegation in which the subordinate gains greater control, greater free-
dom of choice,with respect to his own responsibility,"
The way participation is promoted in TQM organizations can be seen in Figure 12.7.

Kalzrn acthrltlr8 1

I
L"
Department of pollcy
l-J
I I or11
‘.ma,

Bg.18.71Putidpation by all
18.9 A new paradigm for worker8
"It may berwrites Masaki lniai, in his book Kaizen,"that (western managers) do not understand.. . workers'
aspirations because of the psychological divisions between labour and management." The worker is thus a
stranger. The manager's response, says Imai, is an "anthropological nightmare", for he "views the workplace
as a hostile jungle (and) his office is a well fortified outpost where he entrenches himself and shuns commu-
nication." Why does this happen? Jeremy Main in Qualiiy Wars blames, perhaps unfairly, the founder of
'Scientific Management', Frederick ~ a ~ l :o"By r separating so sharply the roles of managers and workers,
Taylor helped create a caste system."
In India, the divisions between wokkers and managers run deeper. Part of the problem has been that man-
ual work has never been held in high esteem. Even technical knowledge has had a lower status. Of the years
between 800AD to 1200 AD, Romilla Thapar, the historian, writes :"The brahmanical writings of this period
attack professions where technical knowledge was essential.. . Mechanical work was a minor sin, and this
category of work included the constr~ctionof bridges and embankments.. ." Education too was against tech-
nical knowledge. "The denigration bf technical knowledge.. . was to impoverish both formal and technical
education.''
Jawaharlal Nehru compares the japanese and Indian attitude to higher education in the nineteenth cen-
tury thus: "Experts were sent for from foreign countries and Japanese students were sent to Europe and
America,not to become barristers and the like, as Indians have done in the past,but to become scientists and
engineers."
Paperwork professions continue to be more respectable than factory work in India. Engineers too drift to
non-technical jobs, or managerial jrobs.
In TQM, the fundamental tenet of leadership is workplace orientation, or being at the work site. This
seems counter to the natural inclinations of many managers. Without overcoming it, however, we cannot
secure the participation of workers. This is an old and stubborn problem, even in the West. Frederick Taylor
warned at the beginning of the 20h century :"The employer who.. . is never known to dirty his hands or
clothes.. . has no chance whatever of ascertaining their (the workers') real thoughts or feelings?
The first paradigm shift is thus to work side by side with operators, at their workplace. This could lead to
the second paradigm shift, whichlis to stop thinking that the workers are the problem. Tney are not.
The third paradigm shift is thdt workers have minds.
In early 20thcentury, FredericklTayior had sought to separate improvements from shopfloor workUAllpos-
sible brainwork? he had written, "should be removed from the shop and centered in the planning depart-
."
ment.. The word 'Total' in TQM really means that everyone is involved. TQM requires that all employees, - -
including workers, apply their mhds in order to make improvements in the workplace. Improvements are not
the sole domain of managers.
The fourth shift is that workers want to contribute. This runs counter to the 'Theory X' paradigm many
managers hold, and according to which, in the words of McGregor,"the average human being has an inher-
ent dislike for work and will avo@it if he can:'and that therefore heUmustbe coerced, controlled,directed.. ."
The TQM paradigm is more aligned to 'Theory Y' which, in the words of McGregor again, holds that "the
expenditure of physical and rnebtal effort in work is as natural as play or rest:' and that people "seek respon-
sibility? 1

It is managemenr's job to create conditions in which work& can make improvements. This includes train-
ing in problem solving method9 and tools,as well as training in understanding equipment and processes, and
about customer needs. That workers are eager to learn and to do well has been established time and again.
"One need only listen to a tape of a meeting with production workers:' wrote Deming, "to learn about their
frustrations and about the contributions that they are eager to make."
 Motivation mdaQabdtment

The fifth shift therefore is to provide education and encouragement to workers who can and do make
remarkable improvements through the use of TQM tools & improvements that would be the envy of engi-
neers. This has been borne out in the work of QC circles, of which excellent case stories have been published.
The sixth paradigm shift is to listen to workers. Typically, their complaints are seldom heard by manage-
ment, except through prejudiced filters, if at all. Their suggestions too are rarely implemented. After a while,
the worker realizes that he is condemned to work with substandard machines, materials and tools, and that
the supervisor really doesn't know his job. He loses all interest, except inthe form of resentful associations
in union activity. The fifth of Deming's fourteen points asks managers to 'remove barriers that rob the
worker of his right to pride of workmanshipl'TQM requires that we listen to the complaints of workers, who
are stakeholders in their own right, and then aim to resolve the problems in a positive spirit. Not only that,
we invite workers, and guide and train them to make individual improvements (kaizen) as well as collective
ones. 'Management: said Deming,"must act on corrections proposed (by workers)."
Lastly, human resource management must shed its narrow focus on managerial staff. They must realize
that non-managerial members outnumber managers, and so workers cannot be managed only legalistical-
ly, through what is called 'industrial relations.' As long as worker management is thought of only in such
terms, there is little possibility of integrating them with the mainstream.
Worker involvement is also often lost through adversarial relations with unions and the negative feelings
spill over to worker relations. The unions too have evolved in a milieu of distrust and confrontation. Often,
their political ends. score over the real interests of the company or its employees. Both management and
workers enter into a win-lose transaction, each seeking to'triumph over the other.
In many organizations,managers also strive to keep the wages low in order to keep their costs down. This
approach had been challenged by Frederick Taylor himself whose aim was to create a system which raised
wages while cutting labour costs. "competition is never really met: wrote Henry Ford,"by lowering wages.
The only way to get a low cost product is to pay a high price for a high grade of human service." He also
warned shareholders that "a business where the dividends are out of all proportion to the wages is perilously
lopsided." In 1915,he had raised the wages of his workers overnight from $2.40 a day to $5.00 a day.
But as we have seen before, high wages do not motivate; they can only stop being a demotivator. Where
wages are far higher than market rates, they may even create an elite whose expectations rise to the level
which is incapable of being met by the company Thus healthy wages must be combined with the new par-
adigms we have talked about, so that workers and managers are aligned, and committed to work together.
A world class organization cannot afford to have the majority of its employees disenchanted with the sys-
tem and feeling either crushed or rebellious. It must have harmony and teamwork at all levels, and everyone
must contribute to improvements. In any event, the great divide between managers and workers must be
bridged, and the barriers torn down.
Motivation and commitment are impossible in a divided home; they are the privileges of the united

18.10 Acknowledgement, Reoognitin and Celebration

Maslow's hierarchy of needs shows us that when safety needs are fulflled, belongingness And esteem needs
surface. Belongingness needs are met through policies of the organization that care for and trusts its peo-
ple. They are also met through acknowledgement.
 Acknowledgement means valuinb people as they are. This is not conditional on any output or results they
produce. On a day to day basis, this means that the organization has mechanisms by which people can talk
to their superiors and be listened to, It is the knowledge that managers are open with their subordinates, and
that their suggestions will be listentd to, valued and acted upon. And that by simply being there, and doing
one's tasks, one is being a valued member. This feeling of being acknowledged is a powerful basis for build-
ing an organization of highly charged and motivated people. It is what Joiner calls "all one team." When peo-
ple know that the management trusts them and believes them, that they are likely to make contributions
irrespective of whether anyone is controlling or supervising them.
Recognition means that a certain achievement is noted and valued. The best forms of recognition are
those that happen in public, but private forms are welcome too, as a pat in the back for a task well done.
The first level of recognition foil.a worker who implements a kaizen (small improvement) is for instance
the fact that his kaizen is displayed (together with his photograph preferably) on the kaizen board. Some
selected ones may then get shifted to a central board where the best kaizens are on display. A public cele-
bration may be held where contributors are recognised and given certificates or souvenirs. Some may be
sent on field study visits. Or they may be given an opportunity to make presentations about their work to
top management or at outside seminars. QC circles too are recognised in this way, Managers at all levels can
be recognized by holding events whenever something exciting is accomplished. Their work may be pub-
lished in company newsletters and magazines. They may be encouraged to read papers in seminars. Or their
recognition by outside professional bodies may be felicitated inside.
Recognition events can be held at the departmental, divisional and company levels. There needs to be no
limit to these events and there certainly should be no limit on the number of people recognized. Ideally,
everyone must be guided and encouraged to do things by which they can earn recognition.
!n highly motivated organizdtions, celebrations of all kinds are normal. They may be welcoming parties
for new joinees, birthday celebr~tions,sports or other 'Annual Day' type events, long service awards and of
course, every recognition event is turned into a celebration. In such an environment, a joyful atmosphere is
created at the workplace, and this is conducive to the personal growth of employees and also to their accom-
plishments.
Many companies involve spouses and other family members in recognizing people. This is an excellent
approach, as it not only recognizes the person, it helps bond himlher and the family, with the organization.
In organizations where people only go to work and return, they seek joy outside the workplace.
Celebrations cause work and the workplace to be associated with happy events. Celebrations are not the pre-
serve only of successful companies. Even when companies are struggling to survive, celebrations over each
milestone causes happy associations, and a greater resolve to achieve more.
Recognition often gets compounded with rewards. When monetary rewards rather than recognition by
others predominates, then all the negative effects of rewards surface. Recognition does not breed competi-
tiveness among people but rewards tend to do that.
To give a monetary reward for a job well done seems to take away the value of the work in the employee's
mind. It is as though the company has bought the work.'Xn award in the form of money for a job done for
sheer pleasure of doing it: wuote Deming, "is demoralizing.. ."
Recognition fulfils a vital high order need of people - to be held in esteem by others - while monetary
 HodvationmdaOmmltmm9

rewards can only fulfil safety needs. When people have high self-esteem and the respect of others, they are
in a situation where they can self-actualize.

18.1 1 Seleotlon, plaament and promotion

Motivation begins with selection and recruitment of people. Mahesh has pointed out the need to hire peo-
ple who have demonstrated the ability to put at least temporarily low thresholds of their lower order needs.
The recruitment process itself can attract or put off such peop1e.A company which is seen to be eager to hire
committed people capable of sel'f-motivation will attract such people.
The other issue in selection is the level at which a company recruits. The best companies tend to
recruit mainly at the entry levels, that is, fresh schoolers and college graduates, rather than at senior lev-
els. This enables them to mould and train their people in their own culture, rather than live with the dis-
ruption created by higher level recruits who may bring in the baggage of habits from their previous
experienci. More importantly, the message goes to everyone in the organization that higher level respon-
sibilities are available to insiders, as lateral recruitments are restrained. There is thus no block to the
avenues for growth.
The promotion system is an important factor in motivation. Typically, in Indian organizations, workers
have virtually no avenues for promotion. At higher levels, technical and scientific talents are blocked with
little scope for advancement, and hence everyone gravitates to management. Some people with the 'right
stuff' and good appraisal ratings may tend to shoot up, while many stagnate.
Worst of all, the annual promotion time tends to be nightmarish for many who may find they are not pro-
moted. Not being able to see fairness, they are demoralized. Typical companies tend to place so much value
and emphasis on these promotions, that the esteem of a person can be severely dented, if an expected pro-
motion is not realized. Companies break their grades up into as many levels as possible (10 to 20 grades,
say) so that people are often-promoted without any real change in responsibility. But these paper-promo-
tions have a great impact on denying or fulfdling the esteem needs of employees.
Clearly, another system is required. Promotions to another llevel should mean another job, or a larger set
of responsibilities. Not everyone in the organization can be given more responsibilities, so tile context
should be such that those not promoted to greater responsibilities can function with dignity and respect.
Being promoted siould not be given a life-and-death weightage.
Technical and scientific talents tend to wither away in the present system. There is no separate channel
for them to grow, if they have no aspirations to become a manager. Clearly a need exists for a separate cadre
for engineers and scientists such that they rise to comparable levels as managers, if they attain mastery over
their areas, and contribute. An engineer at a high level, say the equivalent of a business head, should be, for
example, at world class levels of expertise and knowledge in his field.

ferent in their talents and capabilities, it is not useful to assume that they are the same and that if they are
rewarded, they would become what they are not.
 Everyone has many talents. World class organizations learn to spot them, and provide jobs and career
opportunities such that these talents +rein full use. That is the way to enable people to realize their potential.
Most performance and potential rippraisal systems list traits and come up with lists of areas of strength,
and areas of weakenesses which need'improvement'. This is a wasteful exercise, as nolhuman can score well
on all the traits that these appraisal systems list up. Nor is it wise to'expect or try to force people to change,
through feedback and other coercive methods in the areas designated as needing improvements. People
grow by being nurtured and by constantly using their own set of unique abilities. Some of these are innate,
and are not easily developed later. Some are learnt early. Others can be learnt at any time. Our education pro-
grammes must enable what exists td blossom, and then impart knowledge and skills as required.
When promotion policies mindldssly push people up - either on time-scale or on merit - we get misfits
all the time. The abilities required to become a good salesperson may be quite different from the one
required to be a sales manager. It has often been seen that in promoting a salesman, the company loses a
good salesman, and gets a mediocre sales manager. Or a good technical person is promoted as a plant man-
ager (in the absence of a separate lqdder for engineers) with disastrous results for both the individual and

Gallup, an American company involved in surveys, has researched on what factors determine real people
satisfaction, and in the process, havk defined talent, in a book entitled First, Break All the Rules.
, feeling or behaviour that call be productively

Thus, the task of placement is the determination of 4 e right fit, between abilities and job design. In an
organization where most people arq doing what they are best fitted for and are nourishing their talents and
growing, and can live with dignity without being promoted or transferred to a job they are not fit for, moti-
vation is likely to be high, on a sustdnable basis.
Many business organizations qperience high rates of turnover of managerial staff. Often managers
ascribe this to people getting higher salaries by changing jobs. It is true that most people switch jobs for
higher salaries. It is likely that most managers can get a job elsewhere that pays more. But that is seldom the
main reason they leave. People dom't often get 'pulled' out of their companies through more pay, they get
'pushed' out of their organizations because of the conditions that exist. These conditions make peo~lesee
unfairness and arbitrariness, poor treatment, poor value syst,oms,lackof a meaningful job that fits ones' tal-
ent, absence of care, or listening,asd pervasiveness of fear. These conditionsbreed resentment, and at some
stage, people decide to quit. Bosse~find it threatening to admit the real reasons. The people who leave may
also find it easy to state salary as a reason. All this masks the real reasons.
In an organization where turnower is high, the people who stay are also likely to be demoralized. The con-
ditions which motivate people are Be same as the ones which help retain people.

i a. la TU canon dample
Canon is a Japanesecompany well known for its cameras and other optical equipment, calculators and ofice
equipment such as copiers. The salient features of its people policy are given here under.
The company's philosophy towards its people is set forth in Box 12.3. It includes promotion of self moti-
vation, self-respect and self relimce.
 ~ttonuadoomrnitmsnt

BOX 18.8 :mer ~ m htlmur

r p w - or ~ u r o n
"Three-Self" Policy
We will proceed in the spirit of self-motivation, self-respect, and Self-reliance.
Merit System Policy
8 We wiU maximize our human resources through the merit system.
New Famq Policy
m We will cooperate to deepen mutual trust and understanding with a harmonious spirit.
m Health-First Pdicy
We will make a healthy body and mind the basis of personal development I
I 1

One of the ways in which Canon seeks to impme itself is through elimination of waste of all forms. As part
of this effort, it mates 'premier work centres' which become models, and where opportunities for growth
exist for "every manager,supe~isor,worker and support staff membeZThe profile of such a centre is shown
in Box 12.4.

Box 1II.I: Fearcla of p m m b work oenbe, Omon

w Achievement is constantly high.

a People are growing.
m Operations are always being improved to eliminate waste.
m Individual functions and goals are dear.
m Everyone sticks to what's been decided (adherence and follow-through).
a Anyone can see ghow things stand-(visualcontrol)

a In premier work centres,"keeping propises become an important daily objective."

: a Target setting involves every level. The PDCA cycle is rotated rigorously with the aim that plan = results.
That is, the purpose of planning is to help reach the targets.Challenging goals are set."People support each
other's efforts by sharing their ideas and experiencesin planning." Visual control ensures that everyone is
informed.
a In 1979,a campaign of'self-management' was initiated to promote the ability to achieve plans.
a As part of the self-management drive, and to acquire more skills, worker abilitieswere catalogued for each
job at three levels calledLHop,Step and Jump'with'jump' being the highest. This enabled workers to know
what skills they needed to learn.
a A livelierworkspace was sought to be created in line with the principles of self-motivation,self-respectand
self-reliance. The first campaign was 5-S (housekeeping). The second was the creation of zero defect
groups (like QC circles) which worked on a large number of improvements.A recognition system was put
in place to acknowledge the work to achieve different milestones such in a premier work centre, excellenu
in waste elimination,good QC circle activitiesetc. A number of conventionswere held to honour members
A vigorous training programme covering all levels was introduced, for elimination of waste.
 Workers were empowered to stop the production lines when abnormalities were noticed or defects wen
being produced.
In short, Canon worked to dearly stated principles, set challenging goals, involved everyone, especially the
workers, aligned the entire team to a defined way of working, and empowered them, while encouraging
teamwork. The result is that Canon is one bf the leading companies in the world in its field.

The hiera* of needs, proposed by Maslow, is the basis for a theory of motivation, as it describes how
human beings can strive upwards to being what they can be, even as they apply threshold springs to dose
their lower order needs.
Deming said: "Drive out fear." Fear diminishes people's initiative and shuts off their striving upwards, J O ~
insecurity and slogans further spread fear. People can suffer stress and burnout under these conditions.
Motivation and effectiveness are not possible under these conditions.
Contrary to the notions of popular psychology, rewards and punishments are both two sides of the same
coin. They stoke our extrinsic motivation to the point where intrinsic motivation, we are born with, is
damaged. They are manipulative in nature and cause many destructive forms of behaviour to surface.
Performance appraisal, so universal in management, is the single biggest source of fear in organizations. It
seeks to differentiate between people on the basis of performance. But performance depends more on the
system than on individuals. Variation makes it impossible to assess individual performances. Appraisal
systems do not meet their goals and cause damage.
We cannot'motivate'anyone. We can only create conditions in which people k l committed and self-moti-
vated. There are seven needs of people which must be met through leadership and systems. People must
be inspired to work purposively, creatively and competently, without burning out.
Inadequate pay demotivates. More pay does not motivate. Further, it is possible to design the structure of
pay such that the expectation of people can be better satisfied.
The co-operative efforts of everyone are necessq for the success of organization. Participation by every-
olte is a fundamental tenet in TQM.When everyone can work together for improvements,commitment is
generated.
Then is a great divide between workers and managers. Bridging it is a condition for everyone to con-
tribute effectively. Workers are not the problem; the management is. Hence managers must tap into the
great desire of workers to learn and to contribute. We have to give up our legalistic, 'lR' orientation to
managing workers.
a People need to be valued and acknowledged for what they are, unconditionally. There are many avenues
for recognizing people for their achievements. Recognition must be available in abundance. Frequent
celebrations infuse joy in an organization.
Everyone has unique talents. The jobs must fit the dents of people, not the other way around. An empha-
sis on entry-level recruitment and providing avenues of growth for specialists who may have no manage-
rial aspirations are two of the ways in which talents oan be nurtured.
There m many examples of companies which excel in creating motivation and commitment. Canon, a
Japanese company, is an exai..~le.Theirsystem involves everyone in the organimtion to work in an aligned
 lMotivationand Commitment

and purposive manner for the betterment of the company, and t

a In ahon, manipulative methods of 'motivating' people not ody fag, but caure dam*. When people are
treated with dignity and am v h d , and when the orgmisational system promotes acmmplishments by
everyone in the organization, people are inspired naturally and turn out great results for themselves and
the organization.

Bracket-creep: The tendency in performance appraisal to praise everyone'very good'. This tendency may
stand in the way of true and fair performance appraisaL
Burn out: Feeling of exhaustionltirednessdue to several factors which may include stress, pressure of work,
etc..
Business Euceknce Model: A framework that definessbusiness excellence and is used to assess business
organizations for purposes of awards.
Gmmm cause A system in which variations in the result occur randomly due to chance causes
inherent in the system.
Erppowemnt: Giving power to employees to decide how the work is to be carried out.
Extrinsic and Intrinsic motivation: Motivation that arises from outside of us is extrinsic, and that which
springs from within &'intrinsicy.
Need hierarchy: There ii a hierarchy about human needs-unless the lower ordepneeds likephy~iological
or security needs are fulfilled to a degree, the hlgher order needs do not surface. Man is pulled towards self-
actualization. 1

Participation: Delegation of authority to subordinates so that they have of

choice in regard to their own responsibilities.
Paradigm The way we look at the wor1d.A paradigm shift is a shift in the angle from which we perceive the
8

world.
Pygmallion effect: One's own expectations colouring the judgementlperception about someone elses'per-
formance or his persona.
Theory X and Theory Y: Coined by Douglas McGregor as representing two opposing sets of assumptions
is about people. Theory X assumes 'people are lazy', while Theory Y's assumption that people inherently
want to work. Neither theory is completely true.
Threshold springs: Applying pressure on onesetf to dose off lower order needs, so that at some threshold of
their satisfaction, Man can pursue higher needs.

18,IS Self-BasessmentQuestions
1. Discuss McGregor's statement that you cannot 'motivate' anyone? What arguments in this Unit
support
.-
this ?
2. Draw the hierarchy of needs. Why do some people tend to demand more and moe money even when
they have enough?Can you explain this in terms of applying thresholds to need fulfilment?
3. What do y6u think is the relevance of the need hierarchy to motivational theory?
4. Discuss Deming's call :"Driqe out fear." What are the negative effects of fear in an organization?
5. In terms of this Unit, what ate the sources of people experiencing'burnoutJ?
6, Can you distinguish between intrinsic and extrinsic motivation?
7. How does an incentive system diminish the intrinsic motivation of people?
8. What are the typical aims of a performance appraisal system? Does the system fulfil these aims? If not,
then why not?
9. What are the negative effects df a performance appraisal system?
10. Is it possible to evaluate individual performance fairly? If not,why not?
11. What are the seven needs of pqople? Briefly, what approach can we follow so that these needs are met.
Discuss briefly
12. Why is participation required for everyone?
13. How do managers end up creating a great divide between themselves and workers? How can they over-
come it?
14. What selection, placement and promotion policies will help or hinder the generation of commitment?
15. Do yau think'people only want more money'? What are their needs from the pay structure?
16. What do you thinkare the main reasons for people quittingorganizations and taking up jobs elsewhere?
Is money the main reason?

18.16 M e r Readliagre
Deming, W.E., 1982, Out of the Crisis, Cambridge University Press.
Deming, W.E., 1993, The New Economics, MIT Centre for Advanced Engineering Study.
Kohn, Alfie, 1986,1992, No Contest, Houghton Mifflin Company.
Kohn, Aliie, 1993, Punished by Rewards, Houghton Mifflin Company.
Maslow, Abraham, 1970,Motivation and Personality, 2nd ed, New York, Harper & Row.
Budringha~n,Marcus and Coffman, Curt, 1999,Flnt, Bmk All the Rules, Simon & Schuster, U.K.
Mahesh, V.S., 1993, Thresholds of Motivatbn, Tata McGraw Hill.
McGregor, Douglas, 1960, The Human Side of Enterprise, McGraw Hill.
Taylor, Frederick, 1911,1947, Scien* M~nagement,Harper and Brothers.
Imai, Masaki, 1986,Kaizen, Random House Business Division.
Joiner, Brian L, 1994, Fourth Generation iU#nagement, McGraw Hill.
Matsushita, Konosuke, 1978,My Management Philosophy, PHP Institute, Inc.
Senge, Peter, 1990, The Fifth DDisclpline, Doubleday.
Japan Management Association (compiled), 1987, Canon Production System, Productivity Inc.
Part v ~aria4&gleat
~vstaxnsfor TQM
This part is concerned with quality management systems (QMS). Though there can be several quality
I
management systems in existence, ISO-9000 series is the currently most established and global standard.
It is best known and most widely used of the systems. Without adherence to QMS, it may be difficult for
the organisation to know and record how well (or badly) it is performing.
This part aims at providing a brief guide to the development and implementation of a QMS. It seeks to
achieve a broad understanding of the nature and purpose of a QMS, its utility and limitations.
This part has three units.

Whit 18: IS0 0000 Haaa@mmt lJJltrmr begins by giving contextual background and
evolution of quality for ISO 9000 Quality Management System (QMS). The benefits likely ensue to an
organisation from implementing ISO 9000 QIUS are discussed. The requirement for IS0 9000 9004 and -
documentation for ISO 9000 QMS are explained. The methodology for implementing IS0 9000 QMS is also
exp-
Whit 14: Mam&amt- - m)defines EMS and discusses the drivers for
adoptingsuch a system. It delwr on the purploses and core elements of EMS, and then d e s c n i the elements
8

of IS0 14000 EMS. It further desc n i s the ac:tivitiescoventd under, EMS, the responsibiiityfor overseeingthe

I
system, people to be involved in EMS, and the system of performance and reward required. The unit
concludes with a case study.

mait 18: Hanagrmrnt Symbma for Sliirtg .ad Eerlth first introduces the subject and then
discusq the need for s&ty and health in industry. It then describes the various approaches to safety and
highliits the need for systems thinking in its managemlent. Thce assessment and elimination of risk is a
crucial aspect in safety managelment and it is discussed at some length. The unit further deals with the
8

1
elements and tasks involved in implementing a safety programme. The focus of the unit then shifts to
occupational health problem in general. This is followed by a brief review of the comparative legislation on
safety and health in some countries. The last part of the unit deals with some case studies.