Did He Reach the Goal?
Steven Cesare, Ph.D.
A business owner from Kentucky called me the other day to talk about his Company’s bonus program. The owner is an astute businessman who developed a rigorous bonus program based on the Balanced Scorecard for his Account Managers. In keeping with that model, each quadrant possessed well-defined empirical goals underscored by behavioral key initiatives intended to promote goal attainment.
The bonus program was designed on a monthly calendar, with a lucrative financial payout for each goal that was accomplished accordingly. Naturally, each quadrant goal payout was independent from the other quadrants. Germane to the green industry, the Balanced Scorecard goals included: year-over-year enhancements revenue, employee retention, enhancements gross margin, and maintenance job retention.
Methodologically sound, with commensurate buy-in from the Account Managers, the bonus program was a critical component to Company success.
Faced with a pragmatic dilemma, the owner sought my advice. One of his best Account Managers had a monthly enhancement gross margin average of 51.9% While that number is impressive, it fell short of the monthly goal of 52%. Hence the telephone call.
I explained that my view of human resources is centralized on accountability. When asked the obvious question from the owner of whether he should pay the monthly bonus to the Account Manager, I stated “Did he reach the goal?” You could hear the owner’s eyes blink over the phone line.
The owner explained that I had to understand the bigger picture of what was at stake. The Account Manager was critical to the field organization’s success and as such the owner did not want to disenfranchise his effort. Similarly, the Account Manager was a key opinion leader in shaping the Company culture, which apparently was at stake at this decision. Finally, the owner intimated that declining this monthly bonus payout may convey the message that he was miserly, bureaucratic, and disingenuous; a view that could not be further from the truth by the way.
In response, I said “Did he reach the goal?” If the owner were to liberalize the goal standard at this time, he would be establishing an arbitrary precedent, necessitating case-by-case consideration well into the future; fundamentally eroding the integrity of the bonus program, and potentially other executive-level edicts as well. After 30 seconds of collective silence, I said “Did he reach the goal?”
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