Deming versus traditional management theorists on goal setting: can both be right? – business quality management advocate, W. Edwards Deming – Editorial
Paula PhiLlips Carson
The 1990s may be remembered in the annals of American business history as the era of the Quality Revolution. Companies faced with increased competition, eroding market share, and reputations for unreliable products are now implementing an arsenal of quality techniques hoping to emerge victorious in the international battle for consumers. Quality management is increasingly being praised as a strategic weapon poised to enhance the competitiveness of American industry.
Yet we are at a crossroads. Contemporary quality management philosophies are often contrary to traditional management practices espoused by the field’s historical founders. These contradictions suggest that an enterprise concerned with quality must ultimately reject managerial precepts proven effective over time. For example, the Total Quality Management (TQM) paradigm, as articulated by quality guru W. Edwards Deming, systematically rejects the traditional use of numerical goals as either a source of motivation or as a method of performance appraisal. Under Deming’s system, this implies no production quotas, no sales targets, and no managerial objectives.
For more than 50 years, Deming has made distinguished contributions to the practice of management, both nationally and internationally. Despite his contributions, however, implementation of his philosophy is being resisted as organizations have accepted and depended upon goal setting as the bases for defining jobs, evaluating performance, and recognizing employees’ rewardable contributions. In attempting to resolve conflicts between these seemingly antithetical approaches, one can find points of similarity and discrepancy in the philosophies of Deming and traditional management theorists, as well as points of reconciliation where Deming’s prescriptions have antecedents in traditional management thought.
W. Edwards Deming
Deming graduated from Yale University in 1928 with a doctorate in mathematical physics. While pursuing this degree, he worked summer months at the Hawthorne Plant of Western Electric developing his expertise in statistical quality control. Though Deming was not aware of the classical Hawthorne experiments, he began to develop ideas about human motivation similar to the ideas of those conducting the famous studies. There he learned that workers hated the production quota system. In addition to its unpopularity, Deming noted that quotas result in decrements in quality and ultimately productivity. So he denounced production standards and began preaching a broad management philosophy, referred to by some as Demingism and by others as revolutionary business evangelism.
The quality expert, now 92 years old, gained international prominence through his consultative work with Japanese manufacturing firms following World War II. He was so successful in his quality improvement endeavors that the Japanese attribute their industrial rebirth to his management philosophy. While Deming assisted Japan in improving quality after World War II, U.S. manufacturers concentrated on increasing the efficiency of production. This pursuit of quantity rather than quality appears to have contributed to the United States’ decline in international competition. It was not until 1980, after appearing on an NBC documentary entitled “If Japan Can Do It, Why Can’t We?,” that Deming received celebrity recognition in the United States. Presently, major corporations and federal agencies are implementing Deming’s approach.
Traditional Management by Numbers
In 1968, Edwin Locke formally articulated the tenets of goal setting theory – a motivational technique derived from the ideas of Frederick Taylor, the father of scientific management. Taylor championed the practice of “task management” – an elaborate system of assigning goals and rewarding workers for achieving those goals. Though Deming concurs with parts of Taylor’s ideology, he suggests that Taylor’s “task management” is to be partially blamed for the quality problems in the United States.
Under Taylor’s influence, several historical scientific management theorists also favored remuneration for workers who attained quantitative goals. For example, Henry Gantt modified Taylor’s compensation system to reinforce workers exceeding a set standard. Harrington Emerson installed reward systems for reinforcing individual production. Frank and Lillian Gilbreth’s motion studies were concerned with increasing the incentive pay of workers.
Despite Deming’s skepticism of goal setting, both historical accounts and contemporary research support the finding that goals improve productivity. Since Locke’s articulation of the theory, nearly 500 studies have been conducted, testing and applying the technique with more than 40,000 subjects and 88 different tasks. Today, goal setting is considered to be the most effective motivational paradigm upon which to build a solid management philosophy.
A COMPARISON OF THE PERSPECTIVES
Deming asserts that the very essence of traditional management – management by numbers – should be eliminated from contemporary practices. Nevertheless, “his negative views on quantitative goal setting are at odds with both historical management prescriptions and contemporary research on goal setting and motivation” (Duncan and Van Matre 1990, p. 5). Or are they?
Opposing Viewpoint #I:
The Assignment of Goals
As a framework for organizing his philosophy, Deming identifies “14 points” or recommendations that total quality managers should follow. Point 11 indicates that work standards, quotas, and management by objectives should be eliminated. His noteworthy objection to goals is the focus on quantity at the expense of quality – quality is sacrificed to reach numerical production quotas. Deming argues that any motivational technique that places an overemphasis on quantity is organizationally dysfunctional, because performance quality can lead to competitive advantage.
Research on goal setting also supports this contention. When quantity goals are set, attention, effort, and energy are directed toward quantity production. The ultimate result of this focus is that quality suffers. Goal setting literature then goes one step further to show that the reverse is also true: an exclusive focus on quality goals will impede productivity or quantity performance gains. Ultimately, research indicates that when goals are set for any single performance dimension, other dimensions will be sacrificed, and a trade-off will occur.
Neither Deming nor goal-setting researchers were first in identifying this trade-off. Decades ago, psychologists recognized the quality-quantity performance trade-off by examining the relationship between speed and accuracy. Summarizing this research, Fitts and Posner (1967) suggest the following:
Man has the ability to trade speed for accuracy. A typist may prepare a hurried rough draft in less time than it would take her to finish a prepared copy but it would contain more errors. A political speaker may impress his audience with the rapidity of his answers or he may take his time and prepare a more reasoned argument. In nearly every task, man can perform at varying levels of accuracy depending upon the rate at which he must act.
Therefore, Deming’s concern about employees pursuing only quantity goals appears to be warranted. However, whereas Deming focuses only on the detrimental influence of quantity standards, goal setting theorists recognize that if both quantity and quality performance are of interest, goals should be set for both dimensions. Emerging empirical evidence supports the finding that both quantity and quality can be increased by assigning dual goals. As such, there appears to be a point of reconciliation between goal setting theory and Demingism.
Reconciliation #1: Quality goals can be set to improve quality performance, though both quantity and quality goals require attention.
Opposing Viewpoint #2: Conceptualizing
and Operationalizing Quality
Despite recent attention focusing on quality management, there is little consensus about how quality should be defined. The ambiguity of the quality construct makes conceptualization challenging and operationalization even more complex. Most experts agree that quality is task dependent – what constitutes quality in one instance may not in another. As a result, a universally accepted quality paradigm has yet to be developed.
The ambiguity associated with operationalizing quality is exemplified in numerous concepts proposed. David Garvin, a recognized quality theorist, identified five theoretical approaches to defining quality. In explicating the PIMS principles, market researchers narrowed the domain and identified two types of quality critical to organizations:
1. conformance quality (ensuring that products meet specifications); and
2. perceived quality (customers’ evaluation of quality).
Preferring to focus on the latter concept rather than the former, Deming believes that concentrating efforts on conforming to design is necessary but not sufficient to ensure quality performance. He suggests that overemphasis on meeting specifications may be an obstacle to quality output, because specifications allow for some dysfunctional variation. Deming’s view of quality focuses on providing customers with what they desire – in the short run and in the long run. Customer responsiveness over the product’s entire life-cycle is crucial. Continuous consumer input is also necessary to satisfy changing needs.
However, responding to dynamic consumer demands also requires creativity and innovation across the entire work force. Notably, Deming’s view of innovation is broader than traditionally conceptualized. Rosabeth Moss Kanter, author of Changemasters, similarly argues that innovation has traditionally been too narrowly interpreted. She asserts that many erroneously equate innovation with technological advancement, such as the development of a new invention or piece of high-tech machinery. Instead, Kanter defines innovation as the process of bringing any new problem-solving or opportunity-addressing idea to use.
Historically, goal-setting studies have focused on examining the effects of goals on conformance quality. Results indicate that establishing specific goals can reduce dysfunctional performance variation. However, given that conformance to expectations is a necessary but insufficient prerequisite to quality output, recent studies have examined the effects of goals on creativity. Contrary to prescriptions that suggest that creativity thrives only in nonstructured settings, articulating quality goals in terms of creativity can enhance innovation.
Reconciliation #2: Quality goals can be set to improve performance beyond just conformance quality by facilitating creativity and innovation.
Opposing Viewpoint #3: Continual Training
Point 6 of Deming’s compendium of 14 points underscores the need for employee training. He emphasizes that workers and managers need to be educated in identifying performance problems and producing solutions. Deming focuses on training because he believes that achieving consistency in employees’ output is as important as reducing product variation. His insistence on training is analogous to providing ongoing feedback and feedforward.
The provision of feedback has long been recognized as essential to the goal-setting process. Studies show that neither goal setting nor knowledge of results alone is sufficient to improve performance: both are necessary. Providing feedback may be more essential under quality than quantity goal conditions. Individuals can often gather feedback on quantity performance from the task environment. Conversely, individuals have greater difficulty evaluating their quality performance because of the ambiguous nature of the construct.
Feedback provision can also increase task commitment, whereas withholding feedback may decrease commitment. Individuals assigned multiple goals (both quantity and quality) tend to be less committed than individuals assigned a single goal. However, when individuals are assigned both quantity and quality goals and are provided with feedback, they report a dramatic increase in task commitment.
The necessity of providing feedback in response to goal performance can be understood through a control theory perspective. Control theory posits that individuals are motivated by a discrepancy between goals and actual performance. When such a discrepancy exists, individuals will increase effort and develop task strategies aimed at reducing the goal-performance gap. However, for a discrepancy to be detected, individuals must have knowledge of goal progress. If such information is available, control theory predicts that individuals will be intrinsically motivated to eliminate the discrepancy.
A control theory explanation of the goal-feedback relationship corresponds with Deming’s perception of human motivation. Deming’s philosophy is consistent with the early works of Frederick Herzberg, Abraham Maslow, and Douglas McGregor – although he was never formally trained in this classic literature. He fervently believes that workers can be motivated by a sense of responsibility “from within”; unless management undermines employees’ inherent motivation, workers can be characterized by McGregor’s description of Theory Y individuals.
A second type of knowledge of results, feedforward, has also received attention in the goal-setting literature. Feedforward involves telling individuals how they will need to work on future tasks to improve performance. It provides information about specific behaviors, strategies, approaches, or activities involved in achieving a goal. Goal-setting studies examining feedforward show that this information gives people the resources needed to actively improve performance by facilitating a clear understanding of goals.
Such understanding of expectations and anticipatory planning are deemed essential by Deming if workers are to improve quality. According to Deming, the practice of assigning “zero defects” goals makes no sense, because there is no understanding of methods to meet the assigned goal. Further, Deming despises the practice of “putting out fires,” because this reactionary process does not result in improvement. Feedforward, in conjunction with goal setting, seems to be a reasonable solution for ending both these undesirable practices.
Reconciliation #3: Feedforward and feedback on task performance serve a function similar to training as suggested by Deming.
Opposing Viewpoint #4:
Top Management Initiatives
Point 2 of Deming’s 14 prescriptions insists that management must initiate and lead the quality improvement revolution. Deming states that “point two really means … a transformation of management” in which organizational leaders assume responsibility for the success of the program while taking blame for past quality problems. Top management commitment is also necessary for formalized organizational goal setting programs, such as management by objectives (MBO). In a recent review of the effectiveness of MBO programs, researchers report that 97 percent of MBO interventions resulted in productivity improvement. However, the most successful MBO programs had the commitment and involvement of top management. Similarly, Deming believes that unsuccessful quality improvement programs are typically caused by insufficient commitment and involvement of top management. Furthermore, he believes that problems in implementation occur when managers delegate responsibility for program success to lower levels in the organization.
Reconciliation #4: Quality management and formalized goal setting programs require the commitment and involvement of top management.
Opposing Viewpoint #5:
Individual versus Team Efforts
Deming believes in the power of the group. He posits that individualism in the United States is often self-defeating, because it promotes competition that undermines the cooperative effort needed in organizations. According to Deming, cooperation, rather than conflict, must prevail in successful workplaces. His perception of conflict is consistent with the traditional view, which maintains that conflict is dysfunctional and that sources of conflict should be eliminated. To establish a cooperative system, Deming emphasizes that conflicting individual goals must be eliminated. He believes that many U.S. companies either implicitly or explicitly encourage conflict by establishing individual performance standards.
Deming’s perception of the impact of group norms on worker motivation is consistent with the thoughts of many figures from management history. Classical field studies have shown that work groups have a significant impact on motivation and output. For example, Taylor became aware of the practice of “soldiering,” a systematic restriction of output, while working at Midvale Steel. His initial authoritarian attempts to overcome soldiering among subordinates resulted in purposeful damage to equipment by the workers. Similarly, during the famous Hawthorne studies, men in the bank wiring room intentionally restricted production. Here it was clear that the work group, not management, set standards for output. When workers in the bank wiring room did not conform to the group’s expectations, they were brought into line using verbal techniques such as chiding and physical techniques such as “binging” workers on the upper arm. In contrast, the women in the relay assembly experiments at the Hawthorne plant showed gains in output, in part because of the cohesiveness and norms of the group.
One of the most avid believers in the group approach was Mary Parker Follett. Her philosophical base was influenced by Johann Fichte, a German philosopher, who believed that individual freedom should be subordinated to the group. Follett suggested (1918) that “potentialities of the individual remain potentialities until they are released by group life.” She did not seek to destroy individualism; she believed that through group life, individualism was released.
Follett suggested that cooperation, coordination, and integration achieved organizational goals. Chester Barnard also believed in the necessity of cooperation among organizational members. He suggested that through cooperative efforts, the system can achieve its purpose or goals. Similarly, Dennison believed in teamwork; unlike Deming, Dennison suggested that clearly understood goals were important for team success.
Like Dennison, Rensis Likert argued that team goal setting fosters a high degree of cooperation and communication. However, skeptics have suggested that group goals be accompanied by individual goals to permit evaluation of individual contribution and to deter social loafing. Nevertheless, recent empirical research found that groups assigned only a group goal performed as well, were more cooperative, and were less competitive than individuals assigned both group and individual goals. Preliminary evidence suggests that assigning a group goal can significantly improve performance when individuals must work interdependently. Individual goals are not always necessary.
Reconciliation #5: Goal-setting research supports Deming’s assertion that groups can perform interdependent tasks and accomplish their objectives at least as effectively as individuals.
Opposing Viewpoint #6:
One of Deming’s most revolutionary propositions is that individual performance appraisals be abolished. Deming believes that the developmental purpose of performance appraisals is more effectively accomplished through coaching, counseling, and mutual support. Similarly, he asserts that the evaluative purpose of performance appraisals, and the resulting differentiation among workers, causes degeneration of teamwork and personal morale. According to Deming, the practice of management playing the role of judge is not conducive to quality improvement.
Interestingly, goal-setting theorists agree with Deming on the detrimental effects of evaluative performance appraisals. “In practice, performance evaluations sometime reduce performance to a level lower than where it was prior to the appraisal…. The cause of these performance declines was found to be the one element that all appraisals had in common, namely, criticism” (Locke and Latham 1984). Like Deming, goal-setting theorists agree that traditional performance appraisals may not be an effective method for improving employee performance.
However, even organizations committed to Deming’s philosophy cannot eliminate evaluation of worker performance. From a legal standpoint, performance appraisals provide a valid and defensible basis for making decisions regarding pay raises, promotions, and terminations. Given the threat of costly litigation, suggestions to abandon performance appraisal systems may not be pragmatic. Instead, a performance appraisal system that prevents worker alienation and is both developmentally useful and legally appropriate needs to be identified.
The MBO technique seems to be a potential solution. The MBO system consists of three processes: goal setting, participation in decision making, and objective feedback. Each of these processes has repeatedly proven to be an essential component of a successful management philosophy. Although Deming considers MBO an extension of quantitative goal setting and thus rejects its use, the MBO system actually offers advantages of flexibility, adaptable for use under quality goal conditions and at the group level.
Reconciliation #6: Although both Deming and goal-setting theorists agree on the detrimental effects of evaluative performance appraisals, MBO represents a flexible system that can be defended legally and can facilitate employee development.
The United States is finally recognizing the importance of producing quality goods and services, although later than Japan. To attain this desired end, American organizations are beginning to implement TQM programs, such as the one offered by Deming. However, just as American corporations are beginning to embrace the TQM philosophy, Drucker notes that Japan is moving away from TQM and back toward “Zero-Defects Management.” Based on drastically different principles and methods than TQM, Zero Defects Management is a return to scientific management. The only difference is that employees themselves, rather than industrial engineers, study the task using computer simulations rather than stopwatches.
This paradox is especially interesting because Deming has suggested that the Taylor approach and similar management by numbers methods are no longer situationally relevant in our complex, international market. However, quantitative approaches have clearly increased the efficiency and productivity of organizations throughout management history. Instead of abandoning these quantitative methods, the traditional management approach needs to be integrated with Deming’s TQM philosophy. By doing this, both quantity and quality outcomes can be accomplished. As suggested by Follett, compromise or domination of ideas is not necessary. Rather, integration of concepts presents an opportunity for creativity and progress. In answer to the question of whether both Deming and historical figures of management can be right, the answer is “Yes.”
W. Edwards Deming, Out of the Crisis (Cambridge, Mass.: Massachusetts Institute of Technology Center for Advanced Engineering Study, 1986). W. Jack Duncan and Joseph G. Van Matre, “The Gospel According to Deming: Is It Really New?” Business Horizons, July-August 1990, pp. 3-9. Paul M. Fitts and Michael I. Posner, Human Performance (Monterey: Brooks/Cole, 1967). Mary P. Follett, The New State.. Group Organization the Solution of Popular Government (London: Longmans, Green & Co., 1918). Edwin A. Locke and Gary P. Latham, Goal Setting: A Motivation Technique That Works (Englewood Cliffs, N..J.: Prentice-Hall, 1984). Edwin A. Locke, Karyll N. Shaw, Lise M. Saari, and Gary P. Latham, “Goal Setting and Task Performance: 1969-1980,” Psychological Bulletin, July 1981, pp. 125-152.
Paula Phillips Carson and Kerry D. Carson are assistant professors of management at the University of Southwestern Louisiana, Lafayette. The authors would like to thank Edwin Locke for his helpful comments on an earlier version of this manuscript, which was presented at the National Academy of Management Meeting, August 1992.
COPYRIGHT 1993 JAI Press, Inc.
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