Closing Case: Hard Facts and Half-Truths
Case Summary
Stanford University professors Jeffrey Pfeffer and Bob Sutton, authors of Hard Facts, Dangerous Half-Truths, and Total Nonsense, have put out a call for a renewed reliance on rationality in managerial decision making—an approach that they call evidence-based management (EBM). They define evidence-based management as “a commitment to finding and using the best theory and data available at the time to make decisions,” but their “Five Principles of Evidence-Based Management” make it clear that EBM means more than just sifting through data and crunching numbers. Pfeffer and Sutton’s research shows that pay-for-performance policies get good results when employees work solo or independently. But it’s another matter altogether when it comes to the kind of collaborative teams that make so many organizational decisions today. According to Pfeffer and Sutton, wide disparities in pay often weaken both trust among team members and the social connectivity that contributes to strong, team-based decision making. Or consider another increasingly prevalent policy for evaluating and rewarding talent. Pfeffer and Sutton found that, according to many HR managers, forced ranking impaired morale and collaboration and ultimately reduced productivity.
Case Questions
1. Do you think evidence-based management seems like common sense? If so, why wasn’t it advocated earlier?
2. Are there circumstances in which evidence-based management might not be the best approach?
3. Could automated evidence-based management ever replace human decision makers? Why, or why not?
4. Would you want your work under Jack Welch’s system at General Electric? Why, or why not?