Performance Appraisal for the Information Age

The Industrial Revolution and what comes after, Part 1

The idea of performance appraisal probably didn’t exist prior to the Industrial Revolution. It had to be invented, and no single person is more responsible for its invention than Frederick Winslow Taylor (1856–1915).

It was Taylor who advocated for replacing the hourly wage system of compensating laborers to a piecework system that paid according to their productivity. Taylor argued that when labor is paid an hourly wage, workers do not have an incentive to provide employers with their best efforts. But when labor is paid for each piece produced, workers have an incentive to work harder. Wherever Taylor’s system was implemented, productivity increased, as did worker compensation and profits.

Yet, the system was considered so controversial that Congress held hearings investigating Taylor and his ideas about improving industrial productivity. Their concern was about whether it was fair and humane to workers because to implement the system, Taylor had to establish the rates by which workers would be paid. There were no customs for piece work as there were for daily or hourly wage rates, and so no standard by which to compare what Taylor felt should be an honest rate of pay for an honest day’s work.

So Taylor devised a system of time and motion studies for determining the “one best way” by which the standard of productivity for an honest day’s work could be judged. In…