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Scooped by Deb Nystrom, REVELN

Pay-for-Performance, A trade-off for Trust & Commitment

Pay-for-Performance, A trade-off for Trust & Commitment | Talent and Performance Development | Scoop.it
Paying your employees more for hitting specific targets may backfire, according to HBS professor Michael Beer .

..."I think there is an implicit negotiation going on between what management wants and expects, and what employees want and expect," observed Beer in his talk to HBS faculty. This implicit negotiation is "embedded" in the context of pay-for-performance, but often goes undiscussed and unacknowledged, he suggested. Misunderstandings about goals are the result. Pay-for-performance may also have a natural life cycle that managers are unaware of, he said.

Financial rewards in a fast-changing business environment could undermine a company's ability to build trust and commitment unless management and employees have an honest discussion of their mutual expectations, they added. This is "very difficult to do."

Related posts by Deb:

A History of Performance Appraisals: Letting Go to Power New Culture

Choices for High Performance Teams, Groups and Psuedo-Teams: Achievement Is How You Say It!

Deb Nystrom, REVELN's insight:

In my experience, pay continues as a satisfier, never a motivator. This HBR working knowledge article classic illustrates the nuances as well as the nusances of attempting to reconcile the hierarchy barriers of expectations in pay-for-performance.  Compensate fairly, motivate systemically & holistically. ~  Deb

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Rescooped by Deb Nystrom, REVELN from Innovation & Institutions, Will it Blend?

Innovation vs. Measurement & Systems: Leadership Is Always The Key

Innovation vs. Measurement & Systems:  Leadership Is Always The Key | Talent and Performance Development | Scoop.it

"Think of “win-lose” structures in incentives.  If you can only win if someone else loses, what are the odds of your developing a working relationship grounded in trust?"


Strong leadership can recognize “win-lose” structures or norms and work to eliminate them.  It seems obvious that leadership drives trust, not systems.


Without ...systems ...built to allow for ...individual and group failure, risk will always be a negative organizational value. 


DIVERSITY:      . . . of people, points of view, ideas, ethics, and beliefs.  Diversity is what drives and powers iteration, constant challenge, testing, playing, and randomness. Strong leadership will drive (or diminish) diversity much more profoundly than will the most deeply embedded systems.  

RISK:     Risk tolerance and the attractiveness of rapid iteration are the hallmarks of innovative organizations.  Without operational systems that are built to allow for and to contextualize individual and group failure, risk will always be a negative organizational value.

...Should you be thinking a little more about how you encourage and foster strong leadership, and a little less about your systems of measurement and evaluation.?  You might be surprised by where this reflection will take you.

Deb Nystrom, REVELN's insight:

This is also shared here via Performance and Talent Development because of the theme of leadership above performance systems, and leadership to build an innovation, adaptive culture that trumps traditional measurement practices. ~  D

Deb Nystrom, REVELN's curator insight, July 5, 2013 5:20 PM

The venture capitalist who wrote this post has a view I share on putting measurement and evaluation within the right context, including a certain tolerance for enough risk-taking to help organizations be adaptive and "anti-fragile." ~  Deb