It’s only logical to assume that you can draw up targets for any manager, setting out how he or she will seek to achieve excellent results and what rewards will flow from success, plus what fate will accompany any failure. But what measure of excellence should you apply?
Some tests are indeed reasonably secure. The marketing boss, for example, can be asked to produce targets for sales and profits by each product line, say. Rewards can be linked to the achievement or failure of this plan. Any firm that lacks such focused plans is not well managed. But few CEOs get this treatment.
The object of the exercise, though, is to set standards and drive effort forwards. This approach has an incentive effect, but that is a secondary result of commitment to achieving desirable and desired results. This neatly avoids a logical trap. Suppose that the above marketing director has a bonus scheme as well as a salary. Do you expect that, in the absence of a nice fat bonus, the executive would work with less commitment, attention and desire?
Would you hire or keep any well-paid worker whose performance fell short of ability and potential? This problem is very common, after all - and the Performance Matrix illustrates it very neatly. One side of the matrix is devoted to CAN DO and CAN’T DO. Is the person able to carry out the function concerned, or is the ability lacking? The other side of the matrix asks a key question. How well is the employee motivated? Is this a case of WILL DO? Or are you landed with a WON’T DO individual?
Note that a WON’T DO, CAN’T DO person is beyond the reach of any incentives or any training. So you can forget (and lose) them with no regrets, other than curses for any error of your own when hiring or promoting.
What you want, of course, is a CAN DO, WILL DO wonder. By definition, this achiever does not depend on material reward to motivate performance. He or she produces good, top-line results because they are good top-line people.
If you have hired or teamed up with pure executive gold, incentivising your colleagues is not going to be a problem. They will just incentivise themselves, which historically was the common root of all incentive schemes.
Self-interest is a powerful engine of economic performance, but it is by no means the one and only. The economic motor needs many other powerful parts like delegation and teamwork.
These components transcend self-interest while still drawing upon the selfish personal drives. There is a selfish element in every achievement. Few things in life are more gratifying and satisfying than bringing an organisation or project into thrilling success.
Perhaps in time the bonus kings of banks and big business will come to understand their dependence on the people in every business who are inhabited by the other talents, without whose contribution nothing great can be won, and whose true worth cannot be measured only in money.
