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October 19, 2007

Comments

Michelle Malay Carter

Measuring output rather than judging effectiveness cultivates corruption. People will do what they need to do to get their numbers when the only thing you are looking at is numbers.

Output should always be a consideration when judging effectiveness, but output alone should never a sole determinant of effectiveness.

This is why the idea of "pay for performance", although currently en vogue, is fundamentally flawed.

One could give 110% and fall short of the goal due to unforeseen and uncontrollable circumstances, while another could give half effort and beat the goal due to luck.

What impact do you think this type of arbitrary system has upon employee engagement?

Joe Jordan

Thank you Michelle, for your candid and insightful comments about the pay-for-performance dilemma. Without results companies can't survive, but success at any price breeds a culture of distrust, keeps employees focused on themselves, and promotes a short-term mentality that weakens an organization's ability to compete.

The arbitrary use of pay for performance, especially in an organization with an inadequate value system invites a wave of ethical problems. Employee engagement is superficial, if at all, as people make decisions and execute plans that will serve their personal financial goals with little concern for the overall health of the organization--and probably no concern for the customer.

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