xy Equation aka X + (xy) = 8 - short version

Equation used in various forms by Dr. Deming to illustrate the point that the observed "performance" of an individual is actually a combination of the individual's effort and ability and the effect of the system. In the equation, 8 is an arbitrary number used to represent an observed result; x is the contribution of the individual to the result; xy is the effect of the system on the result. This equation with two unknowns cannot be solved uniquely for x. When performance of a collection of individuals is rank-ordered, the rank-ordering is not a ranking of the individual performances as is often thought, but rather is a ranking of the total outcomes of the individual's efforts and the interaction of the individual with the system. Values of xy are, almost certainly, different for each individual in that system. Thus, one cannot solve the equation, at one point in time, to evaluate individual effort and performance...Leading to the conclusion that performance reviews and merit systems

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