Regression Fallacy

If you criticize people after an exceptionally bad performance, they tend to get better next time. If you praise people after an outstandingly good performance, they tend to get worse next time. Therefore criticism is more effective than praise as a way of improving performance.

WRONG

After an exceptional performance - either exceptionally good or exceptionally bad - the next performance is likely to be closer to the average. This is a well-known phenomenon in statistics known as regression toward the mean.

So the short-term effect of praise and criticism may be a lot less significant than it appears. And if we want to look at the longer-term effect of praise and criticism, we need to take a much longer view than the next performance. 

The purpose of a system is what it does. But which system, over which time horizon? If we are overly concerned with short-term results, we may easily come to believe that criticism is more effective (fit-for-purpose) than praise. The same may be true of all sorts of other meddlesome interventions. People learn to meddle and criticize because these actions appear to have short-term effects, and so these actions are reinforced. 

System thinking invites us to pay attention to the scoping and time horizon of the system in question. It may be difficult to look beyond the narrow short-term effects, but it may be important to try.