Avoid Artificial Performance Measures

Having specific, measurable goals in place, along with agreement on what happens when the goals are achieved does more than help you track your success; it helps you avoid the heartache of artificial performance measures.

Some companies, for example, are more preoccupied with tenure than performance as my friend Ross discovered. The company he’d been interviewing with extended an offer, but Ross didn’t accept it immediately because didn’t have a clear picture what his path within the company would be. The hiring manager told him that people in his position typically get promoted in 12 months. Being a hard-driving, energetic guy with a track record of rapid promotion, Ross didn’t like that answer so he asked: “What, specifically, do you expect that person to accomplish before they reach the next level?”

The conversation continued until Ross learned the specific, measurable goals he needed to achieve. At that point Ross said, “I know myself well-enough to know I can achieve all of those goals in 6 months.” He proceeded to back up his claim with examples from previous positions and asked, “When I achieve these goals in 6 months, what happens then?”

Unmoved, the hiring manager said, “No one has ever achieved that in 6 months. Even if you did, it would still take the full year until you were promoted. That’s just the way we do it.”

After a somewhat spirited negotiation, the hiring manager begrudgingly agreed to write up a formal letter stating that if Ross achieved the goals at any point before the first year of his employment, he would be promoted immediately. Not able to distinguish talent and confidence from arrogance, the hiring manager went on to say she didn’t think he could do it. Nevertheless, Ross accepted the offer.

Six months later, after achieving all of the goals, Ross went to his supervisor and proudly requested his promotion. His supervisor told him a promotion at that point wouldn’t be possible because he had only been with the company six months as opposed to the 12 months dictated by company policy. Even with the a written letter of agreement, the company didn’t want to promote Ross because it would appear he was getting preferential treatment relative to other people in that position. The company eventually honored its agreement, but not without a fight.

The morals of this story should be clear:

1. Agree on the specific, measurable results—and outcomes—BEFORE you accept a job, promotion, or additional responsibility.

And, of course:

2. GET IT IN WRITING!


Calculating Your Value
Take the time to establish, in advance, where the company is and how the value might change through your efforts. This information will help you justify performance-based compensation beyond whatever salary was budgeted for the position. A helpful book in this regard is Value-Based Fees by Alan Weiss. The book, which was written primarily for consultants, describes principles and strategies valuable to anyone who wants to be compensated for the value they bring to the organization.

According to Weiss, for a business relationship to be truly successful, the person who received the service has to be able to say: “That was a terrific investment” while the person who provided the service has to be able to says: “And I was fairly paid for my efforts.”

Through my coaching and speaking, I have met countless people who have contributed far more value than they ever received in return. One executive, for example, saved his company more than $5 million over a 16 year career through strategic investments in automation, real estate negotiation, and other initiatives. Many of these accomplishments went well beyond his areas of responsibility and the standard metrics used to evaluate the performance of a person in his position.

For purposes of illustration, we’ll ignore the value he created in other areas and focus exclusively on cost savings as if it were the only measure of success. In this are, he contributed, on average, more than $312,500 annually to the company’s bottom line. Yet during the same period, his average annual compensation was under $140,000. Arguing for performance-based compensation isn’t about being greedy; it’s simply about being rewarded for the legitimate value you contribute. If you can save a firm over $300,000 every year, you are worth a lot more than $140,000. It’s up to you to see that you get it.

If you take the time to quantify your accomplishments and understand the expected value of your efforts, you will be in a far better position to avoid the inequities above—tight labor market or not.