Red bead experiment

An experiment developed by W. Edwards Deming to illustrate it is impossible to put employees in rank order of performance for the coming year based on their performance during the past year because performance differences must be attributed to the system, not to employees. Four thousand red and white beads in a jar, 20% red, and six people are needed for the experiment. The participants' goal is to produce white beads because the customer will not accept red beads. One person begins by stirring the beads and then, blindfolded, selects a sample of 50 beads. That person hands the jar to the next person, who repeats the process and so on. When everyone has his or her sample, the number of red beads for each is counted. The limits of variation between employees that can be attributed to the system are calculated. Everyone will fall within the calculated limits of variation that could arise from the system. The calculations will show that there is no evidence one person will be a better performer than another in the future. The experiment shows that it would be a waste of management's time to try to find out why, say, John produced four red beads and Jane produced 15; instead, management should improve the system, making it possible for everyone to produce more white beads.