Page 58 - Performance Leadership

Chapter 3 Measurement Drives Behavior • 47

evaluation. When managers score their own performance, evaluation
is needed, leading to the right discussion. Setting the right example
helps reduce the tendency to game the numbers, perhaps even care-
fully planning this example up front.
People who show that they do the right thing should be publicly rec-
ognized. Consider the example of a consulting firm. Every month, the
firm held a sales meeting. In one meeting, not even halfway through the
year, one of the salespeople spoke up and said that, most likely, he would
not make his target if his sales didn’t improve. The other salespeople at
the firm believed that he had ruined his chance of receiving a bonus,
because there was more than half a year to try to make the target. Senior
management, however, praised that salesperson for having the courage
to step forward and ask for help. Immediately, two pre-sales consultants
were assigned to this salesperson, the chief operating officer promised to
tour the sales manager’s region, and the sales manager was awarded a
special incentive for loyalty. All other sales managers stood corrected.
They had learned a valuable lesson.
The new process increases the alignment of the organization and
reduces gaming of the numbers, helping to lessen the gap between the
organization’s self and self-perception. Stepping forward and explain-
ing one’s performance evaluation leads to understanding ways of think-
ing within the management team, and may even reconcile differences.

Aligning Personal and Corporate Objectives

10
“On the Folly of Rewarding A, While Hoping for B,” originally pub-
lished in 1975, is a management classic. This article describes numer-
ous examples of dysfunctional reward systems that drive dysfunctional
behavior. Management is fascinated with “objective criteria,” so it seeks
simple, quantifiable metrics against which to reward performance. In
many organizations this can be observed particularly in the sales
department, where the compensation of salespeople usually consists of
a very large variable component. In good years, salespeople make a lot
of money (perhaps even more than their managers), but in bad years they
have to do with their base salary only. Most salespeople are measured on
revenue, as well as on some other indicators such as customer retention
or customer satisfaction. Although revenue is an important corporate