Faulty HR Assumption - People are Logical
Now that the economy is in shambles, people are starting to realize that markets and economies do not behave rationally. A whole field of behavioral economics is studying all the ways in which people act illogically. Just look at fads, bubbles, busts, fashion, and marketing as evidence that people are not logical. We are also not very good at being objective. If your views agree with mine than I am more likely to think you are being fair than if your views are opposite of mine (look at Fox News' Fair and Balanced policy.) Many HR policies try to instill logic and objectivity into human behavior, and it's like trying to make a duck ride a bicycle. It's just not part of our nature to be detached and rational. Performance appraisals will never be objective because the people who work for me are better than the people who work for you. And I am in every way smarter and better than you are, even though I've never met you. Every attempt to make people policies fair and objective will be countered by new ways to game the system in one's favor. Just look at how our tax and regulatory laws are constantly being gamed. So why don't we stop pretending to be fair and rational and just accept that we aren't and probably never will be?
This means that we will have to rethink many of conventional HR practices that are based on the carrot-and-stick approach to motivation.