Management’s highest priority is employee productivity. Inevitably this means that the relatively small number of managers in every organization is faced with the challenge of monitoring  a large number of employees. In response to this challenge, designers of today’s organizational structures turned to the Panopticon. The design of this building invented by the English philosopher Jeremy Bentham in the late 18th century allows one person to watch inmates of an institution in situations where it is physically impossible for the person to observe all inmates at once. Its success relies on the fact that because the inmates don’t know when they are actually being watched, they are forced to behave as though they are always being watched.

The Traditional Organizational Structure

The idea of a central monitor who watches the behavior of a number of people formed the basis of today’s organizational structures within which supervisors manage direct reports. From the time of the industrial revolution, this type of structure has proved itself to be a useful way to organize employees, so much so, that this basic structure has remained both dominant and fundamentally unchanged in the following years.

The Panopticon structure works well where command and control communication is solely top down and where those being monitored contribute little other than passivity to the successful operation of the system. When it comes to maximizing productivity however in today’s fast-changing and highly competitive world, no organization can run effectively unless it can promote and manage a strong flow of information back up through the structure from the workface. In such situations, where both upstream and downstream communication is vital to operational effectiveness, the shortcomings of the Panopticon structure become apparent.

Downstream/Upstream Communication

In a well-run organization, the following two flows of information are vital:

(1)  Commands from management transmitted down through the structure and which translate strategic objectives into specific objectives, targets, and actions for downstream employees to follow.

(2)  Information from the workface to management which contain:

• Specific operational issues that affect the implementation of commands.
• Suggestions for ways to change processes in ways that will imporve performance in the future.

It’s no coincidence that many breakthroughs underpinning the industrial revolution were invented not by members of the upper classes but rather by technicians working much lower down. James Watt, who invented the steam engine, was an instrument maker. James Hargreaves, who invented the spinning jenny, was a weaver and the list goes on. In the years since the industrial revolution, we have learned not only to value employees but that much of the most valuable human capital is to be found in the minds of those working lower down in the structure at the workface.

It is here, where employees battle with day-to-day problems that limitations in the organization’s strategy and the way in which this is implemented come to light. Additionally, because employees working at the workface struggle with these problems daily, they gain a great deal of practical knowledge and are better placed to take advantage of serendipity.

Feedback Control Empowers Organizations

The idea that knowledge resides primarily at the top of an organization, from where it needs to be distributed via commands to be followed without thinking by those working lower down, is clearly wrong. In every effective organization, commands from the top are merely a starting point. Successful organizations these days apply the power of feedback control, an engineering technique developed over the past fifty years, which allows even highly complex machines to be accurately controlled in the most difficult and dynamic of environments.

Feedback control is the very opposite of command and control. As implied by its name, control is in the feedback not in the original commands. Most organizations operate in a world where theory and practice are usually very different. No plan survives its implementation without continuous adaptation and decisions need to be continuously updated in the light of experience. In today’s organization, this experience resides in the minds of employees working lower down at the workface, where theory and practice meet.

In most successful organizations, senior management delegates implementation and decision-making to the lowest levels possible. Additionally, senior management within such organizations plays close attention to the flow of information coming up from the lower levels and adapts their targets and strategies accordingly. Feedback control has therefore already become fundamental to the way in which many areas of successful organizations function.

For the most part however, this powerful technique has not yet penetrated the way in which organizations recruit and retain knowledgeable employees. This is where evidence-based recruitment and management development comes in.

Evidence-Based Recruitment and Management Development

The methodology underpinning evidence-based recruitment is based on the same concept of feedback control that has enabled entrepreneurs and business managers to turn the top-down nature of the Panopticon into today’s dynamic organizations. It places control in the hands of the managers who work directly with employees.

It achieves this by using performance appraisal ratings together with hire and fire data to determine the success or failure of the recruitment process deployed when each new employee was hired. Within Talent Chaser, this data is “fed back” into the system’s recruitment screening technology to adapt the way in which future employees will be screened. Using this feedback control approach to recruitment, it is possible to make ongoing improvements to employee retention far greater than those achievable through other methods.