Today I Learned: Deming's Red Bead Experiment

I just learned about Deming's Red Bead Experiment. The experiment simulates a business that produces white beads using a somewhat convoluted system (the linked page above describes it well). The idea behind is that individual worker's performance has no impact on the results that worker produces. However, due to randomness and other factors outside of the worker's control. This is simulates a modern business environment. However, good performance is rewarded with pay raises while bad performance is punished, for example by being put on probation. The point is that this is how many businesses are being run. Namely, employees are rewarded or punished due to the workings of the system they are placed within; not due to their performance.

For more:

• Youtube video of the experiment being run.
• Hacker News discussion.