The High Success Rate of Low Expectations
Congratulations, you read this sentence! Not impressed? You shouldn’t be. You probably would be looking at this article if you couldn’t read basic sentences. Celebrating a foregone conclusion is a spiraling path to mediocrity. Achieving the inevitable is not an accomplishment.
Imagine an archery target as tall as a garage door with bullseye covering 85%. No one would be impressed if you made a bullseye, not even you. But this is how many companies view targets for their incentive plans.
Sometimes plans are designed this way because goal setting is an inaccurate science. When this happens, the best solution is to correct things quickly and confidently
Sometimes plans are designed this way to make people “feel good” about their accomplishments. Stop it. Just stop it. The people who will lead your company to success are not the same people who would celebrate beating a 3-year in a basketball game.
Sometimes plans are designed this way because someone set a prior target too high, perhaps unachievably high. Our natural response is to flinch and pull back on the next set of goals, leaving us in a position to look foolish or wipeout our budget with little to show for it.
Too often, plans are designed this way because of a misunderstanding of incentive pay. The basic premise of pay for performance is this: targets and quotas are meant to require effort. They should require people to stretch at least a little bit.
It’s nice to celebrate achieving goals. It’s always fun to pay people some extra money. But, this has a dark and difficult downside. If leaders aren’t paying close attention they can be lulled into thinking people are doing a great job, even when the results average, or worse. As your staff celebrates, the competitor down the street is striving for slightly higher goals each measurement cycle.
Before long you will be asking how the other company got ahead. You will look back and claim that you always hit your goals. You may be explaining this as you interview for your next job. If your company is to grow, your people have to grow as well.
One quick note: None of the above implies that targets should only be achieved occasionally. A perfectly designed incentive plan (good luck with that) will require people to stretch, while being 100% achievable, with a bit of effort and great execution. Model every possible scenario and fight hard for the plan you know will be difficult, yet possible. The celebrations will be that much sweeter and the payouts will that much more appreciated by those paying and receiving them.