Page 219 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Chapter 5. Salary 205

Rating
Numeric Verbal Objective Attainment

4 Outstanding Significantly surpassed or
surpassed over major obstacles

3 Superior Surpassed over obstacles or
achieved over major obstacles

2 Very good Surpassed or
achieved over obstacles or
almost achieved over major obstacles

1 Good Achieved or
almost achieved over obstacles or
partially achieved over major obstacles
0 Acceptable Partially achieved or
little accomplishment over major obstacles

0 Marginal Little accomplished or
nothing accomplished over major obstacles

0 Unacceptable Nothing accomplished
Promotability

2 Excellent Likely for more than one promotion
1 Good Likely for one promotion

Table 5-23. Performance and “promotability” ratings

Another way to build difficulty into the rating process is to factor the rating up or down,
based on stretch or lack thereof in the goal. Typically, goals when totaled equal 100. If they
are too easy, the manager might mark them down to total 95 or 90. Conversely, for a person
with more difficult stretch goals, the total might be 105 or 110. In both situations, the totaled
scores are divided by 100. The impact is shown in Table 5-24. The example shows two
different individuals, but it could be the same person after having decided to be more aggres-
sive, taking on the more difficult goal E and adding in goal F. Because executive A accepted
only a 15-point weighting for goal A vs. the standard of a 25, it was possible only to have a
total weighting 10 points below the standard. Conversely, executive B took on the addition
of goal F, worth 10 points. Had the 350 total points been divided by 110, the rating would
have been 3.18. Because it was divided by 100, the executive was rewarded with a 3.50.

Objectives vs. Goals. When defining performance expectations, typically one describes
objectives and goals. Objectives are usually qualitative targets, while goals are usually quanti-
tative targets, although some companies reverse the two. (The confusion may be due to
origin. Sports-minded individuals know goals are scores in football, hockey, and soccer.
Military types think in terms of objectives, such as “take that hill.”) The first step is to define