informal coalitions

Fundamental flaw in performance-related pay

An article by Carly Chynoweth, in the Appointments section of the latest Sunday Times (5.2.12), includes a refreshing challenge by Warwick Business School professor, Bruno Frey to the notion and practice of performance-related pay. The article was no doubt prompted by the current furore over the size of executive bonus payments and other 'rewards for performance'.

Referring primarily to the pay of CEOs, Frey’s main suggestion is that target-based approaches to bonus payment should be scrapped.  He argues that any such pay should be based instead on an annual, retrospective judgement about the nature and extent of bonus that a CEO’s performance merits.

Several of his points resonate strongly with those I have made in earlier posts, such as Building commitment –v- rewarding performance and Public sector pay review – Off target. At the same time, his notion of an annual appraisal, based on hindsight, still assumes a degree of objective knowledge about the causes of performance outcomes that I don’t believe is credible in the socially complex world of organizations.

Evaluating organizational interventions - The challenge of complexity

"The idea of a plane outside the world on which to stand has become a fundamental myth of our culture. The myth has most often taken the form of a spectator view of knowledge – the notion that we can stand aside from the action and comment upon it from a detached viewpoint."

Bruce Gregory - Inventing Reality

Yesterday afternoon, I attended an excellent meeting in London, at which Roffey Park’s Liz Finney and Carol Jefkins shared the output of their research into the evaluation of OD interventions (copies can be purchased here). Their work provides a thorough review of current thinking and practice in this aspect of organisation development. The research is presented in an easily digestible form. And the authors offer practitioners a "toolkit" of potential interventions to evaluate the conduct and impact of their work.

But is their prescription credible in the complex world of organizational dynamics?

How can HR support its managers in change and OD?

This is the final post in a short series looking at aspects of organizational change and development during a recession. The series expands on some of the points in Annie Hayes's feature article on the topic in HRZone.co.uk.

This final offering examines HR's role in supporting its managers in their leadership of successful organizational change and development.

Employee engagement - With what?

Stephen Billing's post Leadership and Management Matter, Not Engagement Scores is the fourth in a series that he's 'penned' on what he sees as the ''cult of engagement''. In it, he summarises his main points as follows:

• high employee engagement does not cause high productivity
• engagement is becoming a cult and wise leaders will not pay much attention to it
• leaders should concentrate on business results and employee engagement is not a business result, it is an input.

The goal of raising employee engagement has become one of the 'taken-for-granteds' of organizational management - fuelled in large part by the ready availability of a multitude of questionnaires and surveys that purport to be able to measure it. But, as Billing argues, does this really make sense?

Who needs job descriptions?

A few years back, I was a member of a group that was looking to design the managerial roles, management systems and work processes for a new organization. We were being helped by one of the then Big Five consultancy firms. As part of this, the consultants produced a set of draft job descriptions, which included one for the role that I would be filling.

I saw the descriptions as bland, matter-of-fact and limiting.

But, when I argued that I was not excited by them, my comments were dismissed by the in-house sponsor: "Job descriptions are not meant to excite," he insisted, "Provided they set out the main activities of the role and identify what’s in and what’s not, that’s good enough for me." My continued protests fell on deaf ears. Or so I thought.

During a break, the Director chairing the meeting confided that he’d agreed with what I’d said. Of course, he couldn’t say so in the meeting itself - money had been spent on getting the experts’ advice and the ‘defender in chief’ was his right-hand man – but he asked me to send him an outline of my thoughts. And so, the Contribution Statement was born.

Calling weaknesses "development needs" is not a sign of strength

Why is it that ...?

Many HR, L&D and OD professionals insist on referring to individuals' weaknesses as "development needs."  Perhaps this euphemism is meant to make people feel better and less threatened.  Perhaps it is an attempt to avoid giving people what is misguidedly seen as 'bad news'. 

Evaluating development and improvement interventions

During a recent management workshop, the vexed question of how best to evaluate development initiatives and interventions arose.  This reminded me of the comments made by a spokesman for the UK's Ministry of Defence, during an international conflict that took place a few years back. He stated that the MoD evaluated the effectiveness of their aerial attacks by asking three questions:

• Did the missile hit the intended target?
• Did the damage caused by the attack materially reduce the enemy's functionality?
• Were the combined effects of the various strikes advancing the overall aims and objectives of the war?

These criteria provide a useful metaphor for assessing the validity and effectiveness of targeted initiatives in other areas, not least organisations.

Building commitment -v- rewarding performance

Many organizations retain an almost messianic belief in the power of performance-related pay and bonus targets to generate commitment and deliver high-quality performance. This is most evident in the approach to executive pay, which is rarely out of the headlines. But the same thinking often penetrates much more deeply into organizations - whether translated into formal pay systems or simply governing the organization's general approach to managing performance. Unfortunately, commitment can't be gained simply by setting up a process of formal target setting or arranging periodic 'performance review' meetings. People might comply - for a time and in a fashion - with externally imposed routines and targets. But commitment is an inner drive. It arises naturally where people feel that they have the motive, means and opportunity to excel at what they are doing.

The seductive power of ‘the one best way’

Towards the end of my time as an in-house OD Manager, I attended a series of half-day, inter-company workshops which had been organized by a leading HR-based networking and research organization.  These were designed to address a number of pressing HR issues of the time, including (so far as I recall) performance management, succession and development, manpower planning, competency frameworks and so on.  Each workshop was attended by senior managers from a range of member organizations.

"Compensation" offers no benefits for HR

Why is it that ...?

We often hear senior VPs, directors and managers in HR talking about their goal of making their organizations "great places to work" (or other similar phrases).  Why is it, then, that the HR profession persists in talking about "compensating" people for working there?  You compensate people for breaking a leg, not for turning up for work in the type of organization that the HR community claims to aspire to.