NCUA and Pay for Performance: IG Report Failed to Provide Necessary, Complete Evaluation and Analysis of NCUA’s PfP Program; PfP Can Be Barrier to Equal Opportunity

The report to Congress (OIG-14-09, issued November 26, 2014) prepared by the Inspector General (IG) of the National Credit Union Administration (NCUA) showed generally that the NCUA was open to investigating potential problems relating to diversity and inclusion issues of its employee rating program (a pay-for-performance-based program). However, the report did not present the structure and rating effect of its pay-for-performance program.

Given this blog’s various postings on pay-for-performance-based evaluation systems, this lack of information is potentially troubling. Pay-for-performance systems can themselves be barriers to equal opportunity. As a result, the pay-for-performance programs cannot be presumed to be without fault. The NCUA’s pay-for-performance program, in totality (structure, operation, and results), should also be audited. In addition, Congress should monitor these agency programs closely as they can interfere with or obstruct goals of diversity and inclusion.

The IG noted on page 16, third full paragraph, second sentence, of the report that management told them that “Employees leave for various personal reasons, including, travel, job fit, and performance.” It is the last word of the sentence that caused me to want more information of the NCUA program. Did the employee leave because of low ratings or did the pay-for-performance program encourage resignations because of the results of the low rating.

There seems to be significant churn in the lower-graded examiners (page 16, third full paragraph), with managers tending to give these entry level workers lower ratings for “lack of demonstrated advanced knowledge, skill, and independence.” But do low ratings encourage improvement or encourage disappointment and departures? If the latter, do people in the lower grades actually advance to higher-graded positions, or do those in higher grades protect their positions by unfairly down rating their subordinates?

Without an examination of the NCUA’s pay-for-performance program, it is hard to evaluate the effect on equal opportunity and achievement of diversity in senior management. The conclusion suggested from the information provided on page 16 is that NCUA has a form of forced distribution rating system (also known as rank and yank, up or out, and so on), with the possible exception that those assigned to the lower ratings are denied pay increases or other benefits rather than being fired. But NCUA must provide more details for a firm determination of what its pay-for-performance program does.

[Postscript: NCUA would be well advised to review the research and ill results of forced distribution systems (for example, at Microsoft and Yahoo Inc.). Also, potential employees should consider, overall, the employee reviews of their employers at websites such as http://www.glassdoor.com (for example, NCUA and the Federal Reserve Board).]

Dick Grote and “Rank and Yank”: Ranking and of “Calibration Meetings” Provoked Chaos at Yahoo, Inc.; Another Warning to Avoid or Remove Forced Distribution Evaluation Systems

The story of the damaging effects of forced distribution rating systems (“rank and yank”) are rarely discussed. But, because of the ill effects on employee’s livelihoods, policy makers must thoroughly investigate and examine forced distribution performance evaluation systems, primarily advanced by Dick Grote and similarly minded apologists.

The quote from the New York Times Magazine illuminates the chaos of forced distribution and corrosive effect on collaboration and on the organization itself. Simply put–forced distribution, in whatever form, does not work. The reasoning for being forced to give a negative review (that is, an effective notice of termination) to somebody on arbitrary and capricious reasons in so-called calibration meetings is an absolute notice of warning before using such rating systems. (Emphasis, in bold, is from the blog author.)

[Marissa] Mayer’s largest management problem, however, related to the start-up culture she had tried to instill. Early on, she banned working from home. This policy affected only 164 employees, but it was initiated months after she constructed an elaborate nursery in her office suite so that her son, Macallister, and his nanny could accompany her to work each day. Mayer also favored a system of quarterly performance reviews, or Q.P.R.s, that required every Yahoo employee, on every team, be ranked from 1 to 5. The system was meant to encourage hard work and weed out underperformers, but it soon produced the exact opposite. Because only so many 4s and 5s could be allotted, talented people no longer wanted to work together; strategic goals were sacrificed, as employees did not want to change projects and leave themselves open to a lower score.

One of the uglier parts of the process was a series of quarterly “calibration meetings,” in which managers would gather with their bosses and review all the employees under their supervision. In practice, the managers would use these meetings to conjure reasons that certain staff members should get negative reviews. Sometimes the reason would be political or superficial. Mayer herself attended calibration meetings where these kinds of arbitrary judgments occurred. The senior executives who reported to Mayer would join her in a meeting at Phish Food and hold up spreadsheets of names and ratings. During the revamping of Yahoo Mail, for instance, Kathy Savitt, the C.M.O., noted that Vivek Sharma was bothering her. “He just annoys me,” she said during the meeting. “I don’t want to be around him.” Sharma’s rating was reduced. Shortly after Yahoo Mail went live, he departed for Disney. (Savitt disputes this account.)

Federal Employees: President Barack Obama Grants Leave on Friday, December 26, 2014

[Note:  For 2015, see this post, https://alexwdc.wordpress.com/2015/12/11/federal-employees-president-barack-obama-grants-half-day-leave-on-christmas-eve-2015/ .]

President Barack Obama issued an Executive Order to grant federal employees an excuse from duty on Friday, December 26, 2014. (http://www.whitehouse.gov/the-press-office/2014/12/06/executive-order-closing-executive-departments-and-agencies-federal-gover)

Futility of “Colorblindness”: Edward Blum Uses Legal Complaint to Express Personal Pique, Appeal College Admissions Decision; Affected Student Can Simply Apply for Transfer to University

Edward Blum, an apologist for “colorblindness”, supported the filing of two lawsuits, essentially arguing that the White plaintiff was discriminated for his race because the student did not get into a desired university–the University of North Carolina at Chapel Hill (UNC-Chapel Hill). However, rather than filing a 65-page complaint, Students for a Fair Admissions, Inc. v. University of North Carolina, the student (who was admitted to another university) could simply apply for a transfer to UNC-Chapel Hill. Crucially, the legal complaint ignores this option.

As I have argued in this blog, “colorblindness” considers all humans to be equal, but the term ignores that social power is concentrated solely within the White race in the United States of America. No proponent of “colorblindness” dares to admit the thrust of Justice John Marshall Harlan’s argument in Plessy v. Ferguson, 163 U.S. 537 (1896), affirming White superiority and control, or to cite the population numbers (by race) in the U.S. Census. As a result, colorblindness apologists, the Blum-sponsored “colorblindness” argument as well as many similar apologists-have stunning insensitivity for the Black people of the United States who bear the tremendous burden of suffering from the injustice of their “colorblind” “ideas” and have little to no social power to stop the wrongful and abusive actions of the social majority.

United States (population: 308,745,538) (2010 Census)

Race Percentage of population Number
White 72.4% 223,553,265
Black 12.6 38,929,319
Native American 0.7 540,013
Asian 4.8 14,674,252

North Carolina (population: 9,535,483) (2010 Census)

Race Percentage of population Number
White 68.5% 6,528,950
Black 21.5 2,048,628
Native American 1.3 122,110
Asian 2.2 208,962

In addition, as I read through the Blum-sponsored complaint, I stopped on table b in paragraph 55. The data are presented in alphabetical order. But, the data should be presented in order of significance. When the data is sorted from largest number of admissions to the lower number of admissions, Whites are shown to have received 61% (3616) of the 5899 seats, and Asians received 17% (1018) of those seats. These two groups account for 78% of the admitted persons. In comparison, Blacks received 10% (618) of those seats. The lack of clarity in presenting the facts makes me doubt the credibility of the entire complaint.

Table B, as presented in the legal complaint–

Table B
Average GPA and SAT for All Admitted Students (2012)
Admitted GPA SAT
American Indian or Alaska Native 103 4.38 1300
African American 618 4.32 1229
Asian/Asian American 1018 4.63 1431
Hispanic 415 4.51 1319
Pacific Islander 6 4.51 1393
White 3616 4.56 1360
Not Reporting 123 4.46 1344

Table B, adjusted by blog author, in order of significance, by admission number and race–

Average GPA and SAT for All Admitted Students (2012) (in order of admitted persons)
Admitted Percentage of admitted persons GPA SAT
White 3616 61% 4.56 1360
Asian/Asian American 1018 17% 4.63 1431
African American 618 10% 4.32 1229
Hispanic 415 7% 4.51 1319
Not Reporting 123 2% 4.46 1344
American Indian or Alaska Native 103 2% 4.38 1300
Pacific Islander 6 1.75% 4.51 1393
Total 5899

The reader will note that the average GPA and average SAT score is lower for Whites than for Asians, but Whites still received 61% of the admissions.

The complaint, therefore, is one of personal pique that the applicant did not gain admission to a first-choice school.

However, the student, a college student elsewhere, is not locked out from UNC-Chapel Hill, a large state university. The student can apply for admission as a transfer student. The transfer program at UNC-Chapel Hill appears to be extensive. The student should use this option before a lawsuit, as the student could well achieve admission by doing so.