Reward Decisions, Not Results, Urges Biz School Podcast

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  1

  Ralph Heath

  04/22/09 | Report as spam

  RE: Reward Decisions, Not Results, Urges Biz School Podcast

  The company should focus on actions that may result in success and move away from judging the effort as a success or failure in such a way that disourages people from taking risks and trying new things to improve their companies. You must fail often on the road to success so reward the person who made a decision to try something great.

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  d_user_name

  04/22/09 | Report as spam

  RE: Reward Decisions, Not Results, Urges Biz School Podcast

  First, as a project manager, my career would have ended both abruptly and long ago if I had the arrogance to tell clients either "results are irrelevant" or, after the most recent of train wrecks, "Hey, nobody's got a crystal ball."
  
  Second, extricating my fascination from this slippery reasoning took a moment, but then it was simple. Remember "Define your terms and argument ceases"? (If you
  also remember that it was Epicurus or Socrates, let me know.)
  
  In this case, one of two key terms is obvious: results. We'll let that one go for a moment; any number of metrics and rationales for utilizing them exist. The more significant
  of the two terms -- externality -- isn't even mentioned.
  
  Now if I exist for MEEEEE! (and others like like me), then everything else is an externailty. Me top dog. Food
  chain exist for me. Obviously, I do pretty much as I please until I get caught, or the consequences to MEEEE! get too high, whatever. If, on the other hand, we all get our paycheck from, oh, let's pick an employer at random -- how about AIG? --then I can't claim, "My project succeeded; too bad about yours," much less "It wasn't MY division that sunk the company."
  
  Which brings us right back to "results" and why I think this argument sucks. It's no different than "The operation was a success. Unfortunately, the patient died."
  
  My goal is to never, never, never confuse activity -- which this "reasoning" advocates -- with accomplishment -- which this "reasoning" contends will sorta kinda happen as a logical consequence of activity. No assembly required. I've yet to receive a bonus for activity, no matter how brilliant or conducive to team-building.
  
  

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  manifestyourdestiny

  04/22/09 | Report as spam

  RE: Reward Decisions, Not Results, Urges Biz School Podcast

  If results are not a measure of decision quality, then what on earth is? Isn't the whole point of making decisions to achieve an intended result?
  
  By no means do "team commitment" and "concrete action" automatically lead to positive results. Haven't we all seen first-hand examples of concrete action taken by committed teams that were clearly misguided and even counterproductive?
  
  As for focusing on "good management processes" and "risk mitigation"... seriously?? That sounds like an almost certain death spiral to me. What makes a management process "good" aside from the fact that it results in a successful business? And I would venture to say that risk mitigation in the hands of a myopic and/or risk-averse management team is likely the leading cause of failure among mature businesses.
  
  Just because it's difficult to do (and anyone who has struggled with crafting, never mind achieving, a so-called "SMART" goal knows what I'm talking about) doesn't mean it's a bad idea to tie rewards to desired results. There have always been factors beyond the individual's control that can affect the outcome of his or her efforts; that's life.
  
  The trick, I think, is in defining a truly worthy goal (too often the sole focus is on short-term sales or profit growth vs., for example, growing your customer base for the long term) along with metrics flexible enough to account for factors beyond an individual's or team's control. And in times like these, the better approach, I think, is to revisit goals frequently and adjust for the realities you cannot control.
  
  But the bottom line is this: Rewards, particularly financial rewards, MUST ultimately be tied to actual financial results in one way, shape or form. If we've learned one thing over the past couple of years, isn't it that you can't afford to pay it out if it's not coming in??
  
  

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  llflowers

  04/23/09 | Report as spam

  RE: Reward Decisions, Not Results, Urges Biz School Podcast

  Absolutely! I agree that employees should be rewarded or at least recognized for decisions even if the results aren't what they imagined or wanted them to be. I worked for a company that penalized you if you didn't meet your goals. Sounds simple enough, right? Let me give you an example...I had a goal to produce 75 marketing pieces in a year. Halfway through the year, management decided we had to cut our budgets. So, one of my proposals was that we only afford to produce 50 PRINTED pieces, yet would still produce the balance electronically. (And they would reach the same audience as if they were printed.) I was told that it would be recorded on my performance review that I had not met my goal and I would be reprimanded for the "incomplete" goal - even though my decision to save the company money based on budget cuts was necessary. Also, the money-saving "idea" would not be added as a "plus" on my performance review either. Talk about debilitating! Several of us left the company shortly thereafter.

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  manifestyourdestiny

  04/23/09 | Report as spam

  RE: Reward Decisions, Not Results, Urges Biz School Podcast

  llflowers, your example supports my points that it's all about setting the RIGHT goal, and secondly, that you need to revisit goals frequently in turbulent times.
  
  Where's the logic in setting a goal to produce 75 marketing pieces? That's not a goal, that's a tactic to achieve some other goal that wasn't clearly defined. (What measurable business result should those 75 marketing pieces have delivered? Increased sales by $XX? Improved customer retention by Y%? Acquired XXX new customers? Or, if you're running a creative department, maybe to increase productivity-per-staff member by 10%?)
  
  And since they did stick you with that silly "goal," once the budget cuts were dictated, and presumably your recommendations accepted, revised and ultimately approved by your boss(es), your goal should have been updated accordingly and you should have been evaluated against the revised goal at year-end. By their very definition, goals change anytime a company makes a major strategic shift or slashes budgets. CHANGES IN STRATEGY GO HAND-IN-HAND WITH CHANGES IN GOALS. If your boss doesn't offer to revisit them (extremely rare in my experience), you should make the proposal yourself.
  
  Finally, the decision to reprimand you for responding to unexpected circumstances with a seemingly sound strategy is downright stupid. Your decision to leave was the soundest of all! Best of luck.