‘Greed Is Good’ – Remuneration, Motivation And Organisation

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The 1980's business culture in the USA and internationally put a considerable emphasis on personal reward on the basis that highly motivated individuals could transform organisations and societies. The extreme example in film was Gordon Gekko in Wall Street stating that greed was good. The 90's, however, have seen companies traumatised and bankrupted by the inappropriate use of remuneration as a motivator. Yet major corporate successes have been built on reward based remunera...


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The 1980's business culture in the USA and internationally put a considerable emphasis on personal reward on the basis that highly motivated individuals could transform organisations and societies. The extreme example in film was Gordon Gekko in Wall Street stating that greed was good. The 90's, however, have seen companies traumatised and bankrupted by the inappropriate use of remuneration as a motivator. Yet major corporate successes have been built on reward based remuneration systems. Phones4U recently and Allied Dunbar in the financial services market is an earlier example.

The notorious Barings Bank had individual traders on bonuses in the millions yet in the long term these motivated individuals were not fulfilling the company's objectives. Moreover even when an individual's reward system is based on entirely appropriate performance indicators, resulting in the organisation’s success and he or she is rewarded, there may still be problems arising from the large differential between salaries of senior people and those of middle management. A payment system that depresses or demotivates 10 people for every one it motivates may not be the best for the organisation.

Wise organisations are therefore trying to reward and motivate all staff so that staff act energetically to further the corporation’s interests both short and long term and feel they have been treated fairly. However there must be properly in place the link between the items on which they are being rewarded and the actions they are able to take to influence the desired outcome.

A wise organisation accepts that:

• It is reasonable for the individual manager to act in his or her own interests.
• Managers work for people not organisations and want to please the superiors closest to them, or failing that, their peer group.
• Managers want to achieve and will be attracted to those tasks at which they know they can succeed, usually favouring the short term at the expense of the long term.

The clear implication is that an organisation should lay some groundwork before relying on a remuneration structure to change performance and behaviour. In other words the management and organisation system must be in balance with the remuneration system.

There are 5 major pre-conditions to the installation of an effective reward structure.

1. Measurement: “If you don’t measure it you won’t get it”. There are various measurement systems of which Balanced Scorecard, which sets multiple objectives and is used by Tesco, is perhaps the best known.

2. Monitoring: If the performance measures are not monitored properly or only monitored in a review at the year end, it can give the manager signals that they don’t really matter or, worse still, that failure is acceptable providing all the managers fail together.

3. Control of the tools for the job: The organisation must ensure that the individual is not over dependent on factors outside his control to achieve the performance measures set out (this is the ‘how’ part of the equation).

4. Consistency: Ensuring that short term organisational factors don’t over-influence managers or drive them from their real objective. The organisation must also ensure that its own design (be it bureaucratic or loose) is appropriate to what is being asked of managers.

5. Reward and strategy in line: An organisation's achieving a clear strategy is not an event that will take place in the future; it is a journey. A remuneration system can be put into an organisation even when it has a relatively muddled strategy providing that organisational and management disputes are resolved by reference to strategy and the “balanced score card”. Only then will there be pressure on the organisation to refine its strategy, structure and remuneration systems.

Based on these 5 pre conditions, there is a checklist of 10 factors that the effective remuneration and reward structure must achieve:

1. Support the business strategy
2. Encourage the desired behaviour
3. Reward relevant performance
4. Be fair
5. Be substantial
6. Be tax efficient
7. Be timely (The reward must take place close to the achievement)
8. Incorporate non financial rewards (Recognition can be as important as cash)
9. Be firm (A bonus lost through missing target should not be recoverable whereas a salary increase should only be delayed until target is reached)


3 Lessons About Meetings from the Forest

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We can learn important lessons everywhere. Here are 3 lessons about effective meetings that came from a visit to Sequoia National Forest.



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Here are three lessons about meetings that came from a walk through the forest.

1) Giant Sequoias

These marvelous trees are a living example that some things take time.

True, we need to work with a sense of urgency. We need to do more with less. We need to move faster than the speed of chaos.

And we also need to be appropriate.

Rushing through some issues can produce false solutions.

For example, a group slams together an annual plan, only to find that the plan ignores real market conditions, organizational limitations, and individual support. The result is a document that no one uses.

For example, a powerful group makes a decision without listening to other people's ideas. And then a bad situation becomes worse. In fact, sometimes the neglected side retaliates with such force that the original group loses status.

Better: Take time to make sure that all considerations are included in plans and decisions. If you are planning a meeting to resolve a major issues, hire a skilled facilitator to help you obtain a result that lasts.

2) A Bear Cub

This cub behaved like a goofy toddler while mama bear went about her business collecting groceries in a supermarket. The cub climbed on logs, fell off rocks, and dropped things on mama. And during all of this play, mama bear just kept working, munching plants, gathering nourishment.

That is, she kept eating until the cub ran toward me. Then mama bear looked up, growled, and chased after the cub. (I'll assume that's what she did, because I ran away when Mama Bear growled.)

What's the point?

Sometimes we need to allow an appropriate amount of disorder because it's part of growth. It's part of letting people explore. It's part of letting people be themselves. Of course, when threats appear, then we should take charge. And we may only need to growl to restore order.

3) Mustang Clover

In the spring, the Sierra Nevada mountains are covered with patches of Mustang Clover. These small flowers (typically, less than half an inch across) look like simple small pink dots as you walk past them. But if you pause and look closely, you will discover a masterpiece of complex beauty.

The point: Are you pausing to notice important details? Some may be merely enjoyable reminders of how wonderful life can be. Others may be essential indicators about the health of your business.

By the way, you can view photos of a Giant Sequoia, a bear cub, and a Mustang Clover at:

3 Myths That Ruin Meetings

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Every year these myths waste billions of dollars in payroll money.

effective meetings, bad meetings, business meeting, facilitation, steve kaye, facilitator, leadership, one great meeting

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These myths have cost companies billions of dollars in wasted payroll money.

Myth #1) Structure spoils spontaneity.

I once attended a two-day long disaster that easily cost over $40,000. Thirty people spent the first hour seeking an issue to discuss, then spent the next 15 hours arguing over insolvable problems. When I asked the manager who called the meeting, "Where's the agenda?" the reply was, "I didn't want to spoil the spontaneity by imposing a structure."

Reality: If spontaneity were a universally sound business practice we would build buildings without blueprints. Of course, no smart business leader works without a plan.

The Fix: Set a goal and then prepare an agenda. Ideally, this agenda should be so clear, complete, and specific that someone else could use it to lead the meeting to obtain the accomplish the goal.

Myth #2: Since it's my meeting I should do all the talking.

Some meetings are run like a medieval court. The chairperson sits on a verbal throne while the subjects sit in respectful silence. The big talker justifies this by thinking: if the other people in the meeting knew anything worthwhile, they'd be leading the meeting.

Reality: If you're the only one talking, you're working too hard. In addition, realize that most people protect themselves from extended monologues by sending their thoughts off on a holiday. That is, no one is paying attention to you: they're busy daydreaming, doodling, or dreaming.

The Fix: Convey large amounts of information by a memo or email. Then call a meeting based on participant driven activities that test or reinforce comprehension.

Myth #3: Meetings are free.

Most meetings are paid for with soft money. That is, it's money that has already been spent for wages. In addition, no purchase request is necessary. No budget needs to be approved. All someone has to do is call a meeting.

Reality: Meetings are very expensive. They use people's time, and payroll is the largest part of running a business. When people hold bad meetings, they waste the most important resource in a business - the time people that spend working to earn a profit for the company.

The Fix: Design meetings to earn a profit. After all, a meeting is a business activity, not a company picnic.

Learn more about Effective Meetings at: http://www.squidoo.com/OneGreatMeeting/

10. Be crystal clear