The comparisons in the previous section of this book were designed to help people understand how the many topics are inter-related. Failure to understand how these topics fit together will condemn any organization to failure. Consider the sobering results of one long-term validity study that looked at the effects of "management-by-buzzword".

Status of the "Buzzwords"

Recent research has now shown that Old Paradigm organizations attempting to manage change by invoking buzzwords will do more damage than good. In fact, most New Paradigm-sounding "buzzwords" have failed terribly. The costs of these failures have been measured in layoffs, downsizings, rightsizings, strategic relocations, strategic adjustments, unemployment rates, loss of quality of life, increased crime and violence rates, organizational flattening, and this list goes on. The euphemisms try to hide the face of death, but they cannot. Within two years, nearly all New Paradigm buzzwords will completely self-destruct. After two years, almost all Old Paradigm organizations (nearly 80%) have found themselves in situations that were some 30-40% worse then before they started their changes.

The buzzwords sound noble. They encourage managers and executives to become cheerleaders. Being a cheerleader is fun, but these buzzwords do not encourage the description of how the new terms align with employees' job tasks. The general never meets the specific. With the specific details about how such general terms affect peoples' jobs and responsibilities, they cannot align their behaviour with the new goals. When organizations ask employees and management to have common goals, and that they collaborate in their efforts to achieve those goals, not knowing the specifics will damn any such efforts. Below is a partial list of the buzzwords:

• Baldridge eligible
• Customer service
• Employee ownership
• Empowerment
• Globalization
• Kanban
• Quality circles
• Self-directed work teams
• Self-management
• Six Sigma
• Statistical product/quality control
• Suggestion systems
• Total employee involvement
• Total productive maintenance
• Total quality
• Total quality manufacturing
• Upwards communication
• World class, to name only a few popular buzzwords.

This list is by no means complete. These buzzword terms are the new banners about which organizations are now rallying. Yet people deserve to be forewarned. They must be very clear that the buzzwords fail.

Ability to say "There is a better way"

One of the most difficult things that any manager or business leader has ever said is "Yes, I see there was a better way than the one I chose". To say there is a better way, or that one did not make the very best command decision, is a Herculean task. This ability, though difficult is central to the success of New Paradigm initiatives. It helps to prevent the rigidity that can creep into organizations and individuals. It also helps to reinforce the ideas of continuous improvement, which is central to the success of New Paradigm practices. If you cannot say "There is a better way", then I would encourage you to ask yourself why you can't. No one has all of the right answers, there is no perfect answer. Like the Nike ads say, "There is no finish line" -- you only compete with yourself.

Very few Old Paradigm organizations ever give the same degree of legitimate power to its employees that a New Paradigm organization does. At CAMI (a New Paradigm organization) employees are encouraged to ask "why" five times. According to CAMI:

When a problem has just been discovered, think about it by asking the question "why?" five times. A haphazard idea of the cause can not be counted on. Thinking it over repeatedly will discover the root cause. All employees at CAMI (Production Associates) are encouraged to think for themselves, and to channel these efforts into teian and kaizen opportunities.

The Sunday New York Times Book Review

The Times Book Review had a review of Peter Drucker's latest book, "Managing for the Future: The 1990's and beyond". The reviewer made a few outstanding points, namely that:

For the first 40 or 50 years of this century, the conviction prevailed that the best education for management was to learn the rituals and practices of business. The graduate management student was given basic instructions in the mores and language of business and repeated chances to answer the question "What would you do?" in this or that situation. Criticized for lack of depth and rigor, this education evolved in the late 1950's and 60's into the modern Master of Business Administration program. Technical tools replaced or heavily supplemented practice in the education of the fast-track manager. Discounted cash flows internal rates of return, spatial attribute models and the rest of the modern management arsenal became the core of a manager's education, and serious management scholars spent decades sharpening these weapons to a very fine point. But now it has become clear that practice and technique do not make an effective manager. MBA's have come under criticism in the popular business press for lacking breadth, sensitivity to context, critical thinking skills and an understanding of what influences and motivates real people. To cope and prevail, the modern manager needs flexibility when meeting new circumstances and substantive knowledge about the complexities of the world in which he or she works. Even more, he or she also needs a theoretical grounding to underpin a recognition of patterns and confused and ambiguous situations. Sunday New York Times, March 8, 1992, Book Review, p. 18, 20.

Management-by-buzzword causes the death of organizations and the loss of good employment, tax bases, community and shareholder benefits. But, these terms do not fail because they are inherently bad -- they fail because they were never implemented or maintained correctly. It is important to know that management by buzzword tends to utterly self-destruct within two years in Old Paradigm organizations.

To make matters worse, organizations often write promissory notes that they might intend to keep, but often don't. Organizations make promises based on early successes. These early successes tend to be based on the pursuit of easily attainable numbers. The early, easy targets are hit, and employees expect to receive the concessions that they were promised. Organizations, however, tend to respond to this early success with an greater list of requests. All the while holding back on the concessions that motivated employees in the first place. This pattern is so prevalent now that the new militancy in organized labour should not come as a surprise. Unions are now to the point where they have had all of the promissory notes that they want to see.

One author commented on the decline of cooperation in the Fremont, California Toyota-General Motors joint venture plant. While General Motors had intended to make the plant New Paradigm, it never fulfilled its New Paradigm promissory notes. According to Imbermann (1992, p. 98) the spirit of the plant is now "intent on reversing any labor/management cooperative systems".

Employees often do not think deeply about implementation of their buzzwords. Typically, they address change by only implementing the most face obvious facets of the New Paradigm features they are pursuing. Consider the following case.

The case of the Old Paradigm coffeepot

One of our management training clients recently presented us with an interesting case problem. They told us that:

We tried to accommodate our employees. We were giving them the opportunity to do their jobs in a fuller way. If they needed anything, all they had to do is ask. We told them they have the empowerment to do the things that they once had to ask their managers for. We gave it all to them. The resources, the supplies, the empowerment. But when we approached them with our chequebook open and asked "What do you want?", their only answer was "A coffeepot for our coffee break area". Our managers started to ask "What's wrong with these people that they aren't doing what we thought they would? Why are they making our lives difficult like this?"

The managers thought that they had empowered their employees, and that the employees were simply playing games with the organization. Other questions were asked, all in frank and total disbelief about the coffeepot answer.

The confound that was unseen by the managers was to be discovered in the process by which people make their attributions, and form their perceptions and attitudes. The employees were simply basing their reactions on the (observed) behaviours of their employer. Since the employer did not do a good job of aligning individual employee behaviours to the goals of the organization, the employees perceived the "empowerment" as a request to do more for less, with no clear linkage between their behaviours and the goals of the organization as a whole. Consequently, the employees used a form of test case to find out more about "empowerment." If they received the coffeepot without complaint, all was good. If they did not receive the coffeepot (or got an argument about their selection) they would determine that "empowerment" was a form of ruse. The change to New Paradigm was threatened because people did not see the links between their effort and:

• Their own workplace performance and reward levels
• The success of their work teams
• The success of the organization

Remember, Old Paradigm organizations have never had it as bad as they do now. Many organizations have not addressed the possibility that they became "successful" only because they were in business during a period when it was simply easy to make money and grow. These organizations grew up in a period of little or no competition, certainly very little off-shore competition. It was easy for IBM, for example, to grow and prosper when it had less than a dozen competitors. Now there are thousands of new competitors each year. The comfort of the past has been rudely stripped away with the changes in the workplace and the marketplace.

The workplace and the marketplace are changing faster now then ever before. New rules are being written. Two 1991 reports in Canada reminded us that:

• We are not prepared for international commerce
• We are not prepared for a unified European Economic Community
• We do not understand German unification
• We do not understand the changes occurring in past and current Communist environments.
• Our workplace training is at least twenty years behind that of our slowest competition
• Our work force is largely illiterate and unskilled. According to Statistics Canada, only sixty-two percent of adults aged sixteen to sixty-nine have sufficient reading skills to deal with simple everyday reading requirements. When asked, ninety-four percent of the people in this age range said they have good or above-average reading skills.

Of the nearly 300,000 thousand permanent jobs lost between 1989 and the end of 1992, nearly 70% have been from the "high school or less" educational category. All of the Old Paradigm organizations that are fearful now did not prepare for change before. Even once noble Switzerland now has a troubled economy and previously unheard of rates of unemployment. You cannot assume that what worked in the past will work in the future.

The defense of the status quo is an epithet, not a management philosophy. The question remains: "What can be done?"

In general...

A little known trade model suggests that smaller, less-developed countries (or companies) should concentrate on internationally standardized products. There are three horizons of trade that a small country can successfully travel. Each is briefly out lined below. Note that Canada is a small country as far as global international trade is concerned. Each horizon is appropriate for a given company (or companies) within Canada

One. If a country (or company) is small, catering to its own national perspective narrows growth for the future. For example, selling snowmobiles in Canada has not been a globally high-profit growth area because there is a ceiling for consumption. Soon everyone who wants a snowmobile will have one. The business is then relegated to parts and maintenance.

The first type (highly standardized high volume goods and services), can be sold across many countries and cultures. Examples of this first type would be semi-finished iron, steel, and other metals, tires, batteries, automobile seat covering material, radiators, etc. All of these are more or less interchangeable products.

Two. If a country (or company) is small, and caters to only a few others, the goods and services must be both highly standardized and high volume. Or, those goods and services must be both highly differentiated and low volume. (i.e., very specialized, short-run goods and services.)

The second type (highly differentiated low volume goods and services), can be sold to existing markets where consumer demands support certain products/services from certain countries. For example, tableware and chinaware from certain countries, fashion shoes from England and Italy, furniture from Sweden and Denmark, or clothes from France and Italy.

Three. Or, if a country (or company) is small, the most advantageous route is to closely follow global patterns of trade, commerce, and consumer preferences. Such a country (or company) would concentrate on products and services that follow international standards and trends. Only by catering to the global market can organizations attain any real cost efficiencies that economy of scale provides.

This scheme also prevents a country (or company) from following any given economy too closely. Japan has followed this route, and linked its commerce and industry to the globe.

In the consumer goods arena, Japan has followed this plan to attain market supremacy in watches, televisions, stereo, optics, computer technology, cars, and motorcycles. In the industrial field, Japan has followed this plan to attain market supremacy in steel, ship-building, and industrial machinery, to name a few. Korea has followed the same scheme and now threatens Japan's hold on affordable high-quality, high-luxury cars (i.e., Hyundai Sonata), and in ship-building, heavy industrial machines, and steel-making (again, all Hyundai).

This third approach is the only one of the three that allows for both economy of scale in production and high output. It must, however, be coupled with New Paradigm human resource skills, small lot sizes, drastically altered production schedules, and a new demand for quality. In fact, many of the points listed above are necessary for Old Paradigm organizations to become New Paradigm organizations.

When following the third approach, just-in-time inventory and just-in-time production, coupled with small lot sizes, upwards decision-making and common employee-management goals will enable the small country (or company) to adapt to the local market demands while maintaining an international presence.

Sun Tzu recommended that generals become aware of the "terrain" of the engagement. In today's parlance, Sun Tzu was telling business leaders to carefully research the nature of their target sites and markets. This background information, (best supplied by good market and consumer research coupled with collegial relationships with the local people), will make sure that the company is always mindful of foreign market factors. Such factors can be: local endowments, the need for local sourcing, complexities in logistics, competition with local unknown brand names, diversity in the market channels, marketing imperfections, and the economies of internal organization, to name a few.

For the small country (or company) that is sending personnel away from home to the new site, extensive training before departure, and extensive communications after departure are paramount. Most North Americans fail when they are posted overseas, particularly to the Pacific Rim. They are literally alone. Research has shown that they spend the first third of their stay acclimatizing and the last third preparing to leave. They are worried about being removed from office politics and chances for raises and promotion in the home office.

The Japanese national abroad, however, is in touch with the home office almost daily. The same formal and informal exchanges that occur at work occur across telephone lines by voice, computer, or facsimile. The same employee receives six to twelve months of pre-assignment training, and extensive counseling from previous expatriate employees who have returned. The Japanese national still receives Japanese newspapers, video-tapes of favourite programs, shows, news, etc. from the employer.

Specifically...

There is a finite set of things that an organization can do to improve itself, its efficiency, or its ability to grow and compete. These management interventions are the "high utility" interventions. They need not be costly, and they will almost always pay for themselves after implementation. If these management interventions are successfully put in place, an Old Paradigm company can easily transform itself into a New Paradigm organization. It is easy to do. If a management intervention does not bear on at least one of these high utility areas, that intervention will probably fail. This is typically what occurs when management tries to lead and manage by "buzzword". The buzzwords convey a sense of what goals need to be met, but buzzwords do not outline the things that must be done to meet those goals. "Globalization", "empowerment", "self-motivation", "self-directed work teams" and "self-management" are all buzz words that we hear, but that we don't know how to implement effectively.

When high utility management interventions are used, the desirable outcomes associated with buzzwords are attained. High utility management interventions are the road maps that must be followed to achieve organizational goals.

The risk in any intervention is that failing means more than just losing the time and money that were involved. Promoting interventions that fail causes the work force to lose faith and trust in the ability of their management to be effective leaders and managers. When general trust in the employer is decreased, job satisfaction is decreased, cooperation towards goals is decreased, and so on. General job dissatisfaction and loss of trust in the employer are linked so that one usually leads to the other -- regardless of which occurred first.

Be warned that the costs of failure are so large that they are truly incalculable. Add to that the problem of getting the work force to trust management decisions in the future, or to follow future plans and goals.

The one attribute of management interventions that predicts success is their utility. Will the interventions actually work? How much money will they save? How many hours will they reduce from the production cycle? How much of a reduction will they create in customer complaints?

Unknown to most North American managers is the fact that better employee selection is the single best thing that they can do in order to save money in the workplace and increase efficiency and competitiveness. After better employee selection, better workplace surveys (feedback from employees), better performance appraisal systems, and better training constitute the most "bang for the buck" interventions. Together, these will lead to longer-term employment, greater employee commitment, and more innovation and ability to compete.

In Kaisha, The Japanese Corp., authors Abegglen and Stalk (1983) attribute Japanese success to three factors:

1. The quality of the work force (from better employee selection),
2. Unique (i.e. New Paradigm) personnel practices, and
3. The rate of capital investment.

In terms of what is "do-able" right now, and will have immediate effect, better selection, employee (and customer) feedback systems, performance appraisal, and training are what needs to be improved right away in Old Paradigm North American organizations. These interventions also constitute the first two of the three points made by Abegglen and Stalk.

All of the Old Paradigm and New Paradigm comparisons that preceded this section revealed differences that are the result of having these four high utility organizational interventions. In other words, if an organization is to have any of the features listed in the comparison section, it should have one or more high utility interventions in place now, or as soon as possible.

These high utility interventions are described below, beginning with better employee selection. After selection, employee attitude assessment (including employee feedback systems), performance appraisal, and training are introduced. Lastly, this section closes with a call for a revisit to scientific management for today's workplaces.

Better Employee Selection

Time and time again, North Americans are surprised by the dollar amounts Pacific Rim and New Paradigm organizations spend on employee selection.

The time it takes to select employees and the careful consideration of selection issues reflects the importance that New Paradigm organizations place on admitting better employees. Better employees are synonymous with greater innovation, better workplace morale, lower theft, accident, and absenteeism rates to name only a few beneficial outcomes.

Until recently, it has been difficult to state what specific costs and benefits are associated with better employee selection. Past statements describing such benefits were rather vague. That has changed in the last ten years. Recent research has shown that there are tremendous dollar savings associated with better employee selection. Consider a few examples.

• One branch of the United States Federal Government employs about 4,000 computer programmers, and hires about 600 per year. The better selection test costs about $10 per person to administer. Once on the job, the average programmer stays for about ten years. Researchers compared the dollar value of the savings from using the better selection tool and found that the maximum savings for one year was $97.2 million. Their "worst case scenario" for dollar savings was $5.6 million, per year.
• The Philadelphia Police Department (5,000 employees) upgraded their personnel selection scheme and saved $5 million per year after the improvement!
• If one could use a better selection scheme, it is possible to increase the productivity of Park Rangers by 13%. In that case, the better selection yielded an approximate 13% increase in productivity, translating into a $1.3 million a year in savings.

Keep in mind that the dollar values pertain to using just one test to hire people in one job in one organization. If these findings are extended to employee selection in general across the many jobs and organizations within Canada (and across time) the dollar value that accrues to a company, city, province, or country extends into the billions of dollars. Or, if your organization has several sites, plants, or offices, the greater savings from better selection can be counted from all of those locations. Hiring good people from the start and retaining them longer also lowers recruitment and hiring costs as the need to hire is reduced.

Other studies have shown that valid employee selection enhances corporate efficiency by reducing turnover, training time, and accidents. There is better person-job fit person-job fit from the start, reducing the likelihood that the organization will be plagued with high levels of job stress, low employee commitment, and other threats to productivity.

On average, a typical organization can expect to realize an annual savings of at least ninety percent of payroll with better selection. (Payroll here is simply defined as the number of employees times their average salary.) But as data with the United States Federal Government has shown, the savings can be as high as two to three times the cost of payroll.

This opportunity for greater savings and increased efficiency can be thought of in another manner. Consider the average rates of "correct" or "successful" employee selection. Each potential employee must pass the selection test(s). Sometimes these are a series of evaluations, similar to a sudden-death competition, wherein a failure along the series removes the applicant from the competition.

A passing score on the selection test(s) should mean that the candidate will do well on the job. This is called predictive validity. (When the selection test is supposed to measure a psychological construct, predictive validity is also known as construct validity.) All selection tests must be valid, and any information that determines an employment decision is regarded as a "test" by the law.

There are four outcomes in employee selection.

1. If an organization accepts those who pass, and those people perform well, the selection program is effective. High-utility people will be brought into the organization. These people are referred to as the "true positives" or the correctly hired employees.
2. The people who failed the selection test(s) but who could have performed well on the job are called the "false negatives". They are the good ones that got away. (This is different from not recruiting people into the selection process. Employment Equity Target Group members are frequently not admitted into the selection stream at all. Innovative recruiting is required.)
3. The people who got passing scores but did not perform well on the job are the "false positives" or the "dead wood".
4. Lastly, the people who failed the selection test(s) and who could not have done the work are called the "true negatives" -- the people who would benefit from having different employment.

The efficiency of employee selection can also be measured by the percentage of true positives (correct hires) in the total number of people hired. On average, Old Paradigm organizations have twenty percent (or less) true positives in their work forces. Joint venture, Pacific Rim, and New Paradigm organizations have over eighty percent true positives in their work forces. Employees can be committed to their work because they want to stay or because they have to stay. A high ratio of true positives is likely to mean having employees who want to stay.

A recession is actually a good period to begin better employee selection. The applicant pool (people available for employment) is large, because people are in it for reasons other than poor performance. A recession is also a good time to start innovative recruiting efforts. Minority groups are often smaller applicant pools but with a relatively greater likelihood of finding true positives. The higher-utility individuals in these groups tend to be under-employed when compared to majority group members. This means that they are available and can be admitted into the selection process.

Innovative recruiting means that organizations must look beyond head-hunters, traditional recruiting agencies, newspaper recruiting ads, and the "old boy's network" when they want to hire. Special interest groups, demographic targeting, educational feeder pools, and direct organizational representation are aids to non-traditional recruiting. Another source of good recruits are former employees or (currently) part-time employees. If an employee passed the selection test(s) before, they are probably still true positives for that organization. Without innovative recruiting, high-utility (true positives) employees cannot be brought into the selection stream or the organization.

Employee Attitude Assessment

Most Canadian organizations can be classified as "caring, but confused". They sincerely want to know what is important to, or valued by, their work force. This is the "caring" part. They use employee attitude surveys to sift through the diversity of opinions in their work force. The Canadian workplace is pluralistic, to say the least. Pacific Rim organizations use employee attitude surveys less frequently than we do because they already know what their work force values. There is much less variability in the workplace in Pacific Rim organizations. Managers spend more time at work and after work with their employees, frequently knowing about matters at home, and other "personal" information.

Pacific Rim managers don't use employee attitude surveys as often to assess their work force, but they use the same kind of information that surveys provide. Hence, employee attitude surveys should be thought of as centrally important to Canadian organizations. (But Pacific Rim organizations do use many variations of the employee attitude survey in quality circles, upwards decision-making and upwards communications, as well as many other areas.)

The "confused" part arises when ill-trained consultants or employees are put in charge of conducting employee attitude surveys. These people select a few issues in the workplace, and then collect ratings about those issues. This exercise is almost always marred by response biases from the respondents, and poor technical quality of the survey (i.e., despite the wording, the survey is not asking about the intended topic).

Canadian organizations get little value for their money when the results from their surveys cannot generalize to the broader realm of employee perceptions and behaviours. Most surveys are created by ill-trained consultants or employees, are very narrow in scope, and produce "results" that do not generalize to other attitudes or behaviors.

The survey results reflect the low utility of the information, leaving little room for recommendations that can make a difference. Consider the following example.

A head nurse in a local hospital created and distributed a survey to nurses. Only a few topics were covered. Predictably, there were not many recommendations for interventions. The head nurse did the same thing that ill-trained consultants and managers do when they create surveys. They list the most-heard or most-complained-about issues, and collect ratings. No surprise, then that most of these surveys list shorter working hours, more pay, and more training as "recommendations". The results from such poorly conceived surveys represent nothing more than a "gripe and wish" list from discontented employees.

The "more pay" issue is important. When respondents rate pay items in a survey, they are combining their ratings of pay and workplace status into one rating. Peoples' ratings of the two are highly correlated, meaning that pay and status are overlapping concepts for employees. This is usually not known by ill-trained consultants or managers. Such surveyors recommend more pay for low pay/status ratings, when what is really needed is an improvement in the recognition of employees such that they feel valued. Suggestion systems show recognition of employees as valued parts of the whole group, whereas flexible working hours permits employees to become more distant.

Consider the results of a recent on-line computer search of the Canadian Business Publications database. That search revealed many references dealing with surveys and job satisfaction. Some of the titles from those references are listed below.

- 1 million lack any interest in their jobs Gallup says. - A managerial challenge: promoting job satisfaction. - Attitude surveys: employees make the difference. - Attitudes, behaviors and performance. - Attitudes in workplace differ for Canadian and US workers. - Career satisfaction depends on many factors. - Changing attitudes toward work in Canada. - Changing times: former fast trackers take to watching the clock. - Company's honesty, ethical behavior top concern for workers: poll. - Costly absenteeism calls for joint effort. - Dissatisfied with your job? Others are too. - Employee perceptions of performance appraisal fairness in two organizations. - Employee surveys provide a wealth of information. - Ethics top issue for workers. - Firms' success linked to workers' happiness. - Giving all for dear old firm begins to pall on employees. - Good family-job balance keeps workers happy, study finds. - Happy employees crucial to companies' success. - How to succeed in business: likely a matter of employee opinion. - Informed workers linked to success. - It's time to loosen boss's white collar. - Job satisfaction must rank with productivity and technical advances. - Keeping top employees is a major challenge. - Making changes difficult for managers, survey finds. - Managing change (one of the most effective tools is the employee attitude survey). - Money helps but it can't buy job satisfaction, survey finds. - Office morale suffers as career chances dim. - Overall career satisfaction hard to find. - Participation key to worker satisfaction. - Reduced job satisfaction could damage recovery. - "Robotization" improves workers attitudes. (Japanese Management Association & Fuji Corp.) - Salaries seldom cause quitting. - Survey questions Canadian workers' competitiveness. - The great pride robbery. - Trends in employee attitudes: signs of diminishing employee commitment. - When bad moods go to work. - Work bores one million here: poll. - Workers more cynical about their firms. - Workers can make or break a boss. - Wreaking havoc: what attitude problems do to your business.

Flex-Time...

The one workplace change that is consistently rated as a highly preferred employee option is flexible working hours (sometimes called "flex-time"). While this may not be an option for some rigid assembly concerns, many workplaces have taken advantage of flex-time.

Providing employees with the flexibility to work their weekly time on the hours of their choosing tells employees a number of things. It tells them that their employer feels they are trustworthy and mature enough to mind their own time. Getting rid of the time clock tells employees this directly.

If completely flexible working hours are not appropriate, try a compromise. Allow a window about arrival and leaving times for work. Most managers fear flex-time because they are afraid of radically changed arrival and departure times -- making managing difficult. They are worried that flex-time will mean that everyone comes in at ten and leaves before three.

When employees are allowed greater latitude in their arrival and departure times there is a surprising result. It turns out that there is only a modest alteration of work schedules, even when employees are given a great deal of latitude in their start and stop times.

One study tracked a flex-time project across 12,000 workdays and found that absenteeism actually decreased when flex-time was introduced. The results showed that there was an average saving of four hours per employee per month of productive time. The number of late arrivals went from six per person per month to 0.67 per employee per month.

Even with flex-time, managers can accurately forecast the scheduling of work activities. Employees do not behave in a random or haphazard manner.

Better Employee Feedback

Another example of better employee feedback systems are suggestion systems. It sounds too simple to say "install employee suggestion systems". In fact, the idea is simple, but it often fails to work effectively in Old Paradigm North American organizations. Rules for suggestion systems that work come from the research literature and cases of successful suggestion systems from North America and the Pacific Rim.

1. Make sure feedback is prompt Do not delay in responding to any suggestions. A suggestion made Monday should have an answer in writing posted by Friday, or whenever the appointed time might be.

2. Make sure that feedback is directly related to the suggestion All responses to suggestions should deal only with the content of the suggestion. If you are unable to answer or address the suggestion, tell the suggestion's author that you have forwarded his or her suggestion to someone who can address the issue. Report the date by which the author can expect an answer.

3. Rewards for suggestions do not need to be large Many New Paradigm and Pacific Rim organizations offer small and modest rewards for suggestions. Do not restrict the number of suggestions by making it appear that every suggestion has to be a "big winner". Every idea counts, no matter how small. Rewards must be spread out.

4. Make sure that rewards for suggestions are equitable If there is a reward system, consider making the reward one of employee recognition plus a small gift. (The gift may or may not be cash, or some percentage return from the savings that resulted from the suggestion.) Do not give rewards to the supervisors of the suggestion authors. No one will offer suggestions when they feel that the reward and/or recognition is not properly given to the right person.

5. Do keep a highly visible record of the number of suggestions Toyota has shown that a large quantity of suggestions also tends to contain high quality suggestions. Recognize peoples' efforts and post the number of suggestions per department, assembly line, or division.

Some of the proven benefits of successful suggestion systems are:

• more employees believing that management is listening to them,
• more employees believing in positive change, and the need for change,
• more employees working with management,
• management receives more respect for their work,
• better service innovation and quality,
• greater ability to react to (or predict) changes in the workplace,
• greater ability to react to (or predict) changes in the type of service or production,
• increase in employee morale and team spirit,
• less divisiveness between labour and management,
• fewer errors per million (i.e., much higher quality rates), and
• faster and more efficient production.

Other recommendations for implementing a successful suggestion system include:

• Select a "neutral party" within the organization to act as an effective liaison between suggestion authors and those who eventually receive the suggestions. As an alternative, the President or CEO might wish to appoint a "Suggestions Coordinator" who would collect responses and act as liaison.
• Including randomly selected employees to work with the Suggestions Coordinator. Rotate employees so that a large number of employees get to see firsthand how the suggestions system works.
• The organization should declare its position on the turn-around time for responses to suggestions and employee queries. Having people that are accountable for answers within a given time would have avoided a great deal of the poor communication that typically takes place, and avoids a considerable amount of employee animosity.

It is also possible to be innovative when considering rewards for suggestions.

• the organization should give thought to the nature of the rewards that it might want to give for suggestions that result in dollar savings. It might also wish to consider methods to help determine the dollar value savings of suggestions that might not have immediately apparent cash savings.
• These rewards should not be large. Successful organizations have used Consumers Distributing coupons, weekends stays at local hotels, small (dollar-value) gift coupons, and the like. Large cash rewards actually decrease the number of suggestions that are given by employees.
• If the organization decides to give a percentage of the savings to the employee as a reward, that percentage should be small.
• When employee suggestions lead to cash savings and the employee is to receive a percentage of that savings as a reward, the organization might consider donating an amount, equivalent to the reward, to a charity designated by the employee.
• For example, if an employee earned a reward of $50, the employee would choose the charity that would receive the matching $50. The organization would donate that "matching" $50 in the name of the employee, and post the dollar amount given to that charity in the organization. A plaque or notice (e.g., "Acme Employee Contributions To Charities") would list the amounts and charity names prominently in the organization. The front lobby would be appropriate, to show employees, guests, and visitors their community spirit.
• This would give an organization the opportunity to further enhance their reputation as a corporate and community neighbour. This will reinforce the belief that the organization is doing something for the community and help to counter any "bad corporate neighbour" images.
• The organization would be able to foster additional community involvement and enhance their public relations -- without drawing monies from existing accounts or budgets. This would be free goodwill.

Many employees strongly wish for more frequent feedback from all levels of management including supervisors, managers, department heads, and senior management. The feedback component of the suggestion system recommendation provides a low-cost, high-profile, and high-utility system for providing this feedback to employees.

Feedback From Those Closest To Production

The previous discussion about employee attitude surveys, workplace attitude assessment, and suggestion systems dealt with only one part of the group of people who can be called "those closest to production".

New Paradigm organizations realize that there are three groups of people who determine the success of their goods and services. All three of these groups effectively give permission for the organization to stay in business. If any of these three groups are not satisfied, they frequently withdraw their "permission to be in business" with taking their business elsewhere.

The three groups of people who are "closest to production" are:

1. The employees and their objective views, perceptions, and expectations. Plus their subjective views, perceptions, and expectations,
2. The customers and their objective views, perceptions, and expectations. Plus their subjective views, perceptions, and expectations,
3. The members of the community in which the business takes place. The community members' objective views, subjective views, perceptions, and expectations must be taken into account. This is particularly true of organizations who wish to maintain the reliability and prestige of their names and trademarks, as well as those who simply wish to be a good corporate neighbour.

Recall that between eighty percent and ninety-five percent of all new businesses die within the first year of their operations. One principal reason for this mortality rate is the fact that people rarely confer with those closest to production. They do not perform any "reality testing" with those who will allow them to stay in business. Those closest to production are often the customers. Being in business is a privilege, not a right, and should be thought of as an elected office. Customers are the voting electorate, and they have few reservations about voting a business "out of office". Customers allow businesses to live.

Getting feedback from those closest to production as part of the competition analysis or early strategic planning will provide invaluable information for the new entrepreneur. Benjamin Franklin's old adage about an entrepreneur simply "building a better mousetrap" to realize fame and fortune is not true. It wasn't true when Benjamin Franklin first coined the phrase, either.

What Franklin meant was, that if you gave someone what they wanted (when everyone wanted a mousetrap, and it worked better, and it cost less), only then people would seek out those products.

The way that Old Paradigm thinking has perverted the truism is that as long as the entrepreneur thought he or she had a good idea, people would seek out those products. The Old Paradigm view forgets completely about customer feedback, even though Franklin implied this.

The importance of getting feedback from those closest to production prior to the launch of a new business cannot be overstated. Companies such as Toyota have been in Canada for many years. But unknown to most people, they have been effectively getting feedback from those closest to production (potential and actual customers) far longer than they have been selling cars in Canada.

New Paradigm organizations and entrepreneurs make this feedback a requisite part of their strategic planning, their day-to-day operations, and their business launch decisions. Otherwise, "innovation" simply means putting more product out the door, without asking if anyone wants it. Selling an Edsel was hard enough then, much less in a recessionary or post-recessionary economy.

Again, three groups of people are the ones who are closest to production. New Paradigm organizations constantly gather feedback from these people. Old Paradigm organizations who wish to survive should also seek these groups.

Better Performance Appraisal Systems

Most performance appraisal systems in North America do not work at all, despite what their proponents might tell you. The performance appraisal systems are vague, narrative-type appraisal instruments. They do not accurately measure performance, they don't help the employees improve, and they are fraught with anxiety for the rater and the ratee.

In order for a performance appraisal system to be defensible in court (i.e., for wrongful dismissal and other types of litigation), a performance appraisal system must have certain features. A number of authors have reviewed the relevant case law, and have each suggested a number of prescriptions for performance appraisal systems. The full set of these prescriptions are listed below.

1. Appraisal of job performance must be based upon an analysis of job requirements as reflected in performance standards A job analysis must be completed before creating the performance appraisal instrument or plan. The behaviors that are important for success on the job are what the job analysis yields. If the job analysis does not yield a list of observable behaviors that are directly related to success on the job, the job analysis is probably not worth the time and money spent.
   • Specifically write the job demands, mission statement, values of the organization, ideals for management, etc., in the job descriptions of employees. State these in behavioral terms that can be observed.

2. Appraisal of job performance only becomes reasonable when performance standards have been communicated to and clearly understood by employees Organizations must be able to show that ratees were given clear and unequivocal job descriptions that detailed what behaviors are important for success (and good ratings) on the job. A job analysis must have been performed to get the job description.

3. Clearly defined individual components or dimensions of performance on the job should be rated, rather than undefined, global measures of overall job performance Do not rate the employee on such generalities as "A good all-round employee", or "Shows good judgment". Not every rater has the same definition of each of those general qualities. Ambiguity about the criteria being rated can result in a performance review that has no validity whatsoever. An organization may find itself in legal trouble if personnel decisions are found to be based on invalid performance reviews.

4. Performance dimensions should be behaviorally based, so that all ratings can be supported by objective and observable evidence Only rate behaviors or actions that can be seen. This gives greater credibility to both the rating of good and poor performance. If the rating dimensions are not behaviorally-based, what behaviors will be selected for training or improvement? What behaviors will lead to maintenance of excellent performance?

5. When using rating scales, avoid abstract trait names (e.g., loyalty, honesty) unless they can be defined in terms of observable behaviors Remember, only the work performance of an employee is being rated -- not some idiosyncratic interpretation of their personalities or motives.

6. When using graphic rating scales where one aspect of job performance is being rated from very low to very high, keep rating scale labels and anchors brief and logically consistent For example, when rating punctuality, do not anchor one end of the scale "Arrives on time every day" and the other end of the scale "Demonstrates loyalty". They do not have anything to do with one another.

7. As with anything else that is used as a basis for employment decisions, appraisal systems must be valid and psychometrically sound This requires someone with the skill set to make this empirical determination, (typically an Industrial and Organizational psychologist). If the appraisal system is not valid, it should not be used. This applies for the ratings made by raters, as well. Raters must provide valid ratings, and have to be trained to avoid rating biases and errors. The items on the performance appraisal form must be valid, and organizations must be able to prove this. Do not just "pretty-up" last year's form and think that it is now valid. Demonstrable validity (that will be required by the courts) must be present for all facets of the performance appraisal process.

8. There must be an appeal process if an employee disagrees with a supervisor's appraisal. Withholding a signature does not constitute an appeal process.

So, ask the in-house performance appraisal expert, or the consultant, about the job analysis that preceded the creation of the performance appraisal system. Ask them about how raters were trained to reduce errors and bias. Ask them about behaviourally-based rating scales as opposed to vague statements in the appraisal form. Ask them if they have updated the content of the performance appraisal form, not just made the form "look prettier". If there is not a good answer to all of these questions, the organization should be prepared to make some changes. Not only is litigation by the employees a distinct possibility, but the organization could be damaged by not understanding the behaviours that are important for success in the job.

An organization might wish to update its performance appraisal system anyway. During management training sessions, university and college classes, we ask about people's ideal performance appraisal system. Without fail, the same core issues are presented every time. The items in this are consistent with the fact that almost everyone dislikes their performance appraisal system. In order to make a performance appraisal system deliver New Paradigm outcomes, this list from employees should be read carefully.

Based on employee responses to our questions over the last ten years, "good" performance appraisal systems have:

• Measurement criteria that are well-understood by raters and ratees. Performance expectations are communicated to and well-understood by employees. These expectations and standards are not "communicated to employees".

• Dimensions or components that are linked to the behaviours required for success in the job. These dimensions and components must be behaviourally-based, with brief and logically consistent verbal anchors.

• Objective ratings that are based on observable behaviours, not second-hand recall or bias-prone and error-laden memories.

• Their basis in valid and current job descriptions, with those job descriptions being the result of valid job analyses. (Job analysis: A procedure to identify the behaviours required for success on the job.)

• Ratings that are solely based on the behaviours related to the job.

• Raters that are trained to make error-free ratings. Sample rating errors and rating biases include, but are not limited to: 1) the central tendency error, 2) halo errors, and 3) leniency errors.

• Ratings that are not forced into a priori or assumed Normal distributions. Forced distributions have been shown to penalize high achievers and wrongfully compensate and reward poor performers. They are often not defensible in court.

• Ratings that are conducted more frequently then just once a year. An ongoing system of regularly scheduled, non-confrontational and non-threatening performance feedback sessions are closer in spirit to the objectives of "mentoring" and "coaching" than any buzzword or catch phrase.

• Ratings that are provided from more than one rater, and then averaged, so as to cancel out, or control for, the various sources of error in ratings. The reliability of a single rater (or judge) is nearly zero.

• A vehicle for employee input -- true upwards communications - not just the ability to complete their own version of the performance appraisal questionnaires.

• The ability to provide salient career development counseling and career path considerations.

• The ability to become the solid basis for realistic goal-setting for individuals and work teams so that individuals and groups can become better self-managers.

• Clearly defined solutions. Any solutions must be expressed in terms of the specific and observable behaviours required to earn higher scores on the next evaluation.

• An appeal process that actually works, and is not simply a space for some signatures on a form.

• A rationale for why the performance appraisals are being conducted, and what purposes the information will be used for. Seventy-five percent of North America's organizations lack performance appraisals. The remaining 25% tend to use performance appraisals for at least four different and contrasting purposes.

• Performance appraisal instruments that avoid the use of arbitrary or invalid numbers or ratings.

• Clear links between performance and compensation levels.

• Effective training for all raters.

• Performance appraisals that have useful results when upwards promotions or salary increases are no longer possible.

To prevent litigation, or to respond to employee perceptions, a New Paradigm performance appraisal system will discover the behaviours that are important for success in the workplace. When behaviours predict that success are known, an organization can do several important things.

With such information, an organization can effectively train low-performers. It will have up-to-date job descriptions. It has a defensible basis for job evaluation schemes. It will get a template of skills that can be used as a guide for selecting employees.

On top of that, the organization will have a non-volatile performance appraisal system that people prefer to narrative and sloppy systems. Good performance appraisal systems in New Paradigm organizations foster coaching and mentoring for all employees.

When New Paradigm performance appraisal systems are in place, managers and other users of these results often start their own employee-improvement plans because the guidelines are provided. A better performance appraisal system leads to better employees and better workplace morale.

Organizations that have the Behavior Observation Scales (BOS) system in place will have better employee reactions to the performance appraisal systems than those organizations that use the Behaviorally Anchored Ratings Scale (BARS), or weighted checklists, or narrative self-reports (such as the Hay systems).

The BOS system affords an organization the greatest defense against litigation, but more than that, it encourages cooperative and collegial work practices in the organizations where it is in place (cf. Chooi & Hill, 1989; Rothstein & Chooi, 1990). Much of the vaunted Japanese workplace cooperation comes from systems that are similar to the BOS.

Once areas of weakness (i.e., specific job behaviors) are identified with the performance appraisal system, training should be used to bring those behaviors up to acceptable levels. Training can also be used to maintain behaviors that are already successful -- for even greater success.

Better Training

Training should be an ongoing process. Training goals must be behaviorally-based so that an organization can make claims such as:

• By reviewing the performance levels before and after training, we can conclusively state that productivity after training has improved by fiteen percent.

In 1991, training was more than a hundred billion dollars a year industry in the United States alone. Nevertheless, North America has one of the most poorly trained work forces in the industrialized world. More than seventy percent of the people who lost full-time employment in Canada during 1989-1992 did not even finish high school. Under thirty percent had finished high school or post-high school education.

The dollar size of the training industry hides the fact that most people who offer training are themselves unqualified. Most training is nearly fraudulent. A major college in southwestern Ontario sells training sessions that are very expensive, but only involve showing videos about buzzwords. Most organizations that need to buy training do not know how training works, what makes for successful training, or how to reproduce success in training. Training in North America tends to be based on fad and fashion, rather than actually learning skills that are relevant to the job.

In New Paradigm organizations, training is an ongoing process. They do not waste their time or money on training that follows fads or fashions. Quality circles were developed, in part, as a way to train employees in the workplace. North American favourites such as "Dress For Success", "Learning Management Styles", or gimmicks relating to training to improve quality or service are unheard of in Japan and other New Paradigm centers.

What Old Paradigm organizations train for, the New Paradigm have already established as a part of their daily operations and procedures. Moreover, when New Paradigm organizations train their employees, that training is appropriately recognized as an achievement by the employee. In Old Paradigm organizations, training tends to occur for the sake of training, and the employees are often not commended or acknowledged for the training they went through.

When training results are not recognized, people do not enroll for training. One manager once said that he could not understand why women were not taking the "Preparation For Management" training programs. He said "there is no sexism or discrimination in this workplace. I know this because we offer management training for women".

In reality, women who had taken the training in the past were not promoted. Other women saw this pattern and did not bother to take a training program that would not lead to career advancement.

For training to be effective, several things must occur. In total, there are eight aspects of training. These are presented below.

1. Training needs must be based on the jobs at hand: If an organization provides training that is not related to the jobs at hand, now or in the foreseeable future, training will be wasted. For training to have utility, it must logically follow the demands of the jobs at hand.

   • If a company has a good performance appraisal system, there will be a valid (i.e., job analysis-based) job description for each job. These job descriptions form the basis for the performance appraisals. Since the performance appraisal and the job description are all behaviorally-based, any low scores on the performance appraisal suggest behaviors for improvement or training.
   • If a company has a good performance appraisal system, there will be a job description for every employee. The job description details the profile of skills and abilities that are required for the job at hand. This information can be used to provide training guidelines for succession planning. By comparing the job descriptions with the abilities of incumbents, the set of people with the closest fit can be selected as likely successors. Since there has been good selection, there is little chance of promoting "dead wood". Training is offered (sometimes called cross-training or management training) for those candidates that have the fewest areas requiring improvement. Logically, all of this should be part of the HRIS (Human Resources Information System) or MIS (Management Information System). In Old Paradigm organizations, there are few HRIS or MIS systems. The Old Paradigm organizations that have such systems do not look at succession planning or training in the manner suggested above. The New Paradigm organizations, however, do.
   • A company that does not have a good performance appraisal system, can not have a clear guide for training or succession planning.

2. Training must be related to individual and corporate goals: In Old Paradigm organizations, training is offered for the sake of training, and this does not satisfy the corporate goals or the individuals' goals. In New Paradigm organizations, there is greater agreement about goals, and more cooperation towards attaining those goals. New Paradigm employees are more likely to volunteer for training that meets individual and corporate goals. They are also more likely to seek such training on their own outside of work.

   • If training is not seen as a means of goal attainment, no one will enroll for training. If a corporate goal is to advance more equity target group members into senior positions, those individuals must be aware of that goal, value that goal, and trust the organization to deliver that goal when the stated training requirements have been completed.
   • Too often, organizations have complained about poor enrollment rates by women for their in-house management training courses. The "stated goal" is to promote women into management positions, but the actual goal is often different. In fact, women who took the in-house management training courses found that they did not get promoted.
   • When the stated goal is corrupted (or is perceived to be corrupted) employees no longer see the link between their behaviours and the goals. Simply put, they do not enroll in those in-house offerings that will fail to deliver desired goals.
   • A related problem can occur when employees' perceptions and expectations lead them to believe that the training is biased, prejudiced, or aimed against their career development. Minority group members may have attitudes, perceptions, and expectations that lead them to believe the training, trainers, or both are aimed against them. In this scenario, low performance is seen to be the fault of the bias or prejudice. Often same-group peers are used to review the issues about low performance versus systematic discrimination. The importance of the same-group peers should not be underestimated. Minority group members will often assume a defensive posture when receiving negative feedback about their performance. (So that this fact is not placed in an improper context, most employees become defensive when receiving negative performance feedback. This effect is amplified in an Old Paradigm organization.)

3. Training objectives must be stated in behavioral and measurable terms: Trainees must know why they are being trained. Trainers must know what to expect from those who are trained. A training program that does not have specific goals that are stated in behavioral and measurable terms, is a training program of low utility.

   • When questioned, many employees cannot say why they received the training that they did.

4. Training must be seen as a means of keeping an efficient organization: Training should be thought of a means of protecting corporate investments. Moreover, any training program that does not pay for a large part of its costs with the dollars that is saves is probably useless. If it were useful, it would generate realizable dollar savings for the organization.

   • Training keeps employees up-to-date on production practices, new technology, new legislation (where legislation conformance is important), the competition, and other areas important to successful competition.

5. Training effectiveness must be constantly evaluated: Evaluation of the training program is required to know if it has been a successful and wise investment. There is a "feel good" reaction to training that comes from getting attention from one's employer. People feel better when they're given attention -- whether or not the training was effective. This "feel good" reaction must not be confused with the objective measurement of the success of the training program.

   • For training to be effective, people must have learned something that they did not know before, (or in some cases, reminded of what they already knew).
   • Most people cannot separate the "feel good" reaction from the "I learned something" reaction. Old Paradigm organizations tend to jump on the "feel good" bandwagon and give indoctrination in the guise of training. Their evangelical-like "training" meetings always leave people feeling good. But when asked if training was useful, these people answer that they felt good. When they are asked about what they learned that they could apply to their jobs tomorrow, they can't answer the question.
   • For training to be measured, those who were trained must be compared to those who were not trained. Old Paradigm organizations do not do this. Nor do Old Paradigm organizations measure the success of training in an ongoing manner. Measurements must be made of the performance levels of the trainees before, during, and after training.
   • Comparisons between the trained and the untrained and the before-during-after measurements, provide the organization with information about the success of the training and will identify the successful factors. This information also allows the organization to fine-tune the training program as it is being conducted.

6. Training results must be stated in behavioral and measurable terms: Again, the importance of the behaviorally-based and measurable training criteria. Training results must be stated in terms of "The successful candidate will:" close 15% more sales, be late 25% fewer times, or some other objective behavior that is measurable and related to the job.

   • Otherwise, training results are likely to be phrased in terms of "higher self esteem" (which means different things to different people), or some other vague criterion or outcome. The crime here is that people cannot tell if training was successful because they don't know what behavior was supposed to have improved.

7. Management must provide valid training: As suggested above, training is a huge growth industry. Most individuals or groups offering training programs are not qualified to do so, they tend to be in the business "for the money". Remember that training is a $100 billion a year industry in the U.S. alone. This leaves management with a dilemma: How do they provide valid training to their staff?

   • If good training programs are not already in place (as they are in New Paradigm organizations), management must contract out the training. In order to select a useful training program, management must consider the validity and utility of the training programs at hand. Validity refers to the "truth in advertising" of the training program. Will the training actually deliver what it says it does? Or, (as in cases that most people have seen), will the training's advertising brochure offer training in twenty-three different important areas but only deliver three?
   • The trainer must be able to prove the validity of his or her offering. Sometimes lists of clients are provided -- but without the ability to contact those former clients the list is useless. Anyone can train once at a given location. Were they good enough to be asked back? How many repeat customers have there been? Does the trainer offer any kind of follow-up to the training to ensure the success of that training? Letters of recommendation and testimony are good, but one can throw out ninety-five percent of the letters that were bad and only display the remaining five percent that were not bad. Or worse, cut sentences out of the letters to present the picture you want (i.e., highly selective testimonials).
   • Does the trainer explicitly say how learning will occur? There can be no success in training if learning has not taken place. What educational style is being used? What is the learning success of that educational style? Is there something in the workshop, program, or course that the trainees will have not known ahead of time? How much new information will trainees receive? Can the trainer prove to organization's satisfaction that the training program is new and effective?
   • If the trainer cannot prove any of these, find another trainer. If the trainer is offering something based on demonstrable learning methods, consider the offering. If the trainer uses good learning methods, a history of repeat clients, and can predict what percentage increase in performance to expect, hire them and keep them as long-term training partners.

8. Training must be supported by management: The one thing that will kill training programs and attempts to improve organizations is if management does not support the training. The example of providing management training for females was given above. Training will fail if management does not recognize the benefits of training and reward those who were successfully trained (i.e., those employees who now have greater utility -- both for themselves and the organization).

   • People learn on the job to some extent. Management must ask itself if it can provide better learning than that. This "better" learning might be learning that avoids goals that are inconsistent with the organization's goals. Better learning might also be faster learning. Faster learning and training yields a work force that is up-to-speed faster. Management-offered training is better at reducing training time, reducing differences in views in the workplace, and increasing productivity and corporate efficiency. Just as with employee selection and better performance appraisals, the dollars that are saved with better people (from better training) can be directly translated into lower customer costs, greater production efficiency, better response time, and more innovation.
   • Better employee selection, good employee feedback, better performance appraisal systems and training are all areas that Japan and New Paradigm organizations have long recognized as being of paramount importance. In fact, the quality and production differences between Japan and North America are not due to differences in culture. The differences are due to the prime attention that these four interventions receive in Japan and New Paradigm organizations.
   • Better selection yields: better employee-workplace, or person- environment (P-E) fit, improved ability to compete, greater innovativeness, lower absenteeism rates, lower turnover rates, greater level of ability in the workplace, lower accident rates, lower stress rates at work, and so on.
   • With better selection comes a better work force that can give better suggestions, more effective feedback, and listens to and implements the feedback given to them.
   • Better selection gives you a better match between people's skills and abilities and the requirements of the job. This is reflected in higher performance appraisal ratings and lowered needs for immediate training to minimum standards. The better the level of ability in employees, the greater the boost that's added to any intervention or workplace improvement plan that follows.
   • Better employee selection, better feedback and survey systems, better performance appraisal systems and better training are all investments in the work force. They are fixed or sunk costs that will pay for themselves in a short period. They serve as the Human Resources department's best means of saving the organization's time and money. Any intervention or suggestion that does not directly bear on one of these four primary interventions will probably waste the organization's time and money.

So, if your organization wants to keep up with New Paradigm organizations, or it wants to become a New Paradigm organization, it must get those four things right. Period. Management fads and fashions will come and go, but as time has proven, these four are the highest utility "bang for buck" practices organizations can have. This also means that organizations do not need to replace these high-utility (carefully selected, listened to, measured and trained) employees prematurely (i.e., terminate and hire anew).

Life-time employment might sound foreign to most North American Old Paradigm ears. In fact, life-time employment has not always existed in Japan. Most North American employers have a commitment to continued employment for their employees. IBM and other companies have had tried to keep permanent employment policies for many years. Even in the auto industry, the majority of employees are long-term employees.

A commitment to long-term employment is required, and that commitment must be believed by the work force. Not firing or laying off during periods of slow profits must be a visible company policy. Kyocera, Matsushita, Toyota, and recently even IBM have accepted lower profits in their time rather than let people go.

In reality, most employers also feel this way, but they deceive themselves when they look at payroll as a possible source of damage control during economic hard times. People are not a source of cost reduction, nor are they a means of maintaining quarterly profits.

Employers need to ask themselves the hard questions. Do they want to forfeit their carefully selected and trained employees (treat them as variable costs or commodities) or do employers want to treat their employees as partners and investments in the future of the company? This is a hard question, and the answer will only come with consistent action.

Revisit Scientific Management For Today's Workplace

In the first section of this book, Frederick Taylor's Scientific Management was discussed in the light of new findings. Namely, Taylor was recognized as being tremendously influential in Japan and the rest of the Pacific Rim. Moreover, that influence has accounted for a large part of the success in those areas of the world today. What then can be applied of Scientific Management in the Canadian workplace in the curren time?

The same basic four "best bets" are what Taylor was arguing for, and what New Paradigm organizations have taken to heart:

1. better employee selection
2. good employee and customer feedback (listening to, and working with employees and customers)
3. better performance appraisal systems and
4. better training are what are required for the Canadian workplace.

Until Canadians drop the management practices of unsuccessful Old Paradigm organizations, they will continue to condemn themselves to being hewers of wood and drawers of water.

Garvin's (1986) Academy of Management Journal article described a comparison between average Japanese air conditioner manufacturing plants, and the best and worst American plants. This comparison is one very good way of showing that the defense of the status quo is an epithet, not a management philosophy.

The Japanese (New Paradigm) plants in his comparison were not preselected in any way. They had 0.95 assembly defects per 100 units, with 0.60 service calls for every 100 units sold. (Note that there might be 100 steps to produce each unit, yielding an effective error rate of 0.0095 errors per unit.)

The best U.S. (Old Paradigm) plants had 9.00 assembly defects per 100 units, with 7.20 service calls for every 100 units sold. The worst U.S. plants had 135.00 assembly defects per 100 units, with 22.9 service calls for every 100 units sold.

The Japanese-made air conditioners have fewer defects than those made in the United States. The Japanese plants were not preselected. American managers in Garvin's study reported greater emphasis on meeting Old Paradigm production schedules. The Japanese managers reported the most emphasis on producing products that have truly zero defects.

From: Garvin, D.A. (1986). Quality problems, policies, and attitudes in the United States and Japan: An exploratory study. Academy of Management Journal, 29, 653-673.

The Japanese plants were better at ensuring that the management and employees all had the same shared goals regarding quality and zero defects. This is possible in all organizations, albeit harder in some then in others. But it is possible.

Or, From Road and Track, (March, 1992, vol. 43, number 7, p. 70, "Cadillac Eldorado Touring Coupe: Redeeming the American luxury coupe?")

When General Motors introduced a new line of luxury coupes in 1987, it dominated the market. Buick Rivera, Oldsmobile Toronado and Cadillac Eldorado had accounted for 140,000 sales annually. But when the first full year of production of the new "E" bodies was tallied, the results were bad, breathtakingly bad. Sixty percent of the projected buyers vaporized.

General Motors gambled that it could sell smaller and more expensive versions of the cars to the very people it trained to value bigger as better. General Motors lost that bet. Reportedly, it forfeited as much as a million dollars a day because of the phantom customers.

What will defeat your attempts at building better organizations are not cultural differences -- but differences in management style. This requires that you pay attention to selection, training, performance appraisal, and feedback from those closest to production. Only then will the spin-off consequences of these issues will have a stable basis for development.

If you can be successful with your management style, you have formed the very best of all possible foundations for future growth, health, and prosperity.