Reward Systems: Inhibitors to Implementation


Tickel, Craig M.   (1988, ASQC)   Productivity-Quality Systems, Inc., Dayton, OH

Annual Quality Congress, Dallas TX    Vol. 42    No. 0
QICID: 3464    May 1988    pp. 467-471
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Article Abstract

Look for the word "Quality" and you can find it being "sold" throughout the country. A significant amount of effort and money has been spent by major corporations in attempting to improve the image of their products. The "quality" of a given product is the combination of three basic components:

  1. the actual dimension and performance characteristics of the product,
  2. the "quality" of the product as perceived by those that design, manufacture, and sell it, and
  3. the "quality" as perceived by the final customer or potential customer.
Actual quality improvements can occur only in the first segment. A vast amount of training resources have been dedicated toward developing the necessary tools to pursue these improvements. Yet the gains which are being realized are painfully slow in coming. Continuing the effort required to keep the improvement program moving is frustrating. Why is it so hard to keep such key programs going?

Historically managers have felt that they are capable of developing effective reward systems. Such systems often neglect that the observed variability in performance is more attributable to the system rather than to the individual. Elaborate rating systems are deeply entrenched in most large corporations and directly linked to employee compensation. Such systems prove each year the astonishing fact that "half of our current employees are below average." Dr. Deming is quite clear on his views on this subject, and for justifiable reasons. All such systems focus on the individual and places him/her in competition with co-workers instead of being encouraged as a member of a team striving for improvement.

This paper examines current reward systems and evaluates their impact on improving product quality. It examines financial systems (such as performance appraisal systems) and other intangible reward systems which impact or inhibit quality improvements.


Human resources (HR)

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