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Questions and Answers – August 21, 2007

August 21, 2007 | Leave a Comment

Just finished Pareto’s 80/20 and thought it excellent. However, one issue I did not see addressed here or in your other writings was how to address performance management with rolling plans/forecasts. In a traditional system there is a fixed contract as you call it and how you perform against it determines your rewards. How does this work in a rolling process where you never have a fixed annual target given the targets keep changing as you update quarterlyDamien

You need to read Jeremy Hope’s work.

Basically you measure performance and set remuneration based on “relative measures”, measured retrospectively. You say “we will compare your progress against your peers, the market place and other measures we agree upon. We do not know nor do you what success will be as we do not know what the market will be like during the year. Basically if you grow the market share you will be rewarded more than a 10% improvement on sales when in fact market share declined!”

Staff will monitor how they are doing against their peers, and regular updates against market share will be communicated to relevant staff. As more companies move this way there will be more sharing of market data through third party intermediaries.

If you do not know how hard you have to work compared to your peers you will, the behaviorists argue, work as hard as you can.


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