Monday, November 07, 2005

Is Rational Evaluation Possible?

Read a piece in the Times yesterday that confirmed my prejudices, but which I forgot to link to. It was on conglomerates, saying that academic research says that conglomerates don't do well because the management tended to allocate capital more evenly among subsidiaries than they should, based on potential returns on investment. In other words, instead of rationally assessing the situation, these ruthless economic men {sic} tried to avoid hurt feelings and conflict by spreading the money around.

Use that as background for the ongoing controversy over performance evaluation plans in the federal government (see here for Wash Post article today). Unions and employees fear that bosses will play favorites; the other reality is that they won't bite the bullet and reward performance adequately. In my experience, the second is the reason that the Carter civil service reforms failed. (There's a notable failure by the current administration to examine those lessons.) Favoritism played a factor in the special awards but spreading the money around was the rule in handling the within-grade increase money.

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