How Do You Measure Results?
I was recently having a conversation about “best practices” over an ice-cold beer. We were discussing incentive plans, and my friend asked what I thought was a pretty simple question: “How do you measure results?”
I started blathering about metrics and goals, hockey-stick shaped graphs, targets, and thresholds. When I took a breath from my passionate and excited dissertation (I can be a bit of a comp geek), he said: “No, no, no. How do you measure whether or not you have done a good job?”
And that’s where the conversation got interesting.
I had to admit that most people in my industry are kind of terrible at quantifying results. Even when results are qualified, the evidentiary trail is pretty lame.
Your company’s compensation philosophy defines your high-level performance metrics. Attract, engage, motivate and retain. We all know the mantra, but how many of us truly measure, set specific goals, and hold ourselves monetarily accountable for these metrics? More importantly, how many hold their high-priced compensation consultants to the same standards?
I regularly ask people if their total rewards programs are working as designed. I also regularly work with companies that have used other consultants for prior projects. I find that very few companies have defined how they would measure the long-term success of a consulting engagement. Those that do, seldom follow-through on the measurement and the communication of achievement or failure.
So, let’s start again. How do you measure YOUR results?
Have you built out a set of minimum, target, and maximum goals on which you would be comfortable paying yourself big annual incentives? Have you documented the expected impact your LTIP will have on company performance (however you define it)? Are you willing to trade-in your current incentive plan for one based on your projections? Have you identified specific improvements in retention and how much money that will save your company? And, don’t forget your long-lost stepchild, communications. Have you documented what you will communicate, how you will communicate it, how much it will cost, and the return you expect to get?
If you have done any or all of the above, please share in the comments. If you haven’t done this, share what’s holding you back. It’s about time we all start measuring results. Only then can we expect to get paid for attaining them.
So that’s it, folks. I went out for a casual conversation over beers and was reminded that we may have a long way to go before we can prove that we are doing a good job. I hope your next evening out stays more fun than mine!