Micheal Hammers article written in Spring 2007 MIT SLOAN MANAGEMENT REVIEW is simply brilliant I rated in my top 10 articles I have ever read.
Open this link and print it today.Please read it asap.
PBSs should be ‘road tested’ on the last complete business cycle
When you think you have a good scheme test it on the results of the last full business cycle, the period between the last two recessions. View the extent of the bonus on the net profit.
You need to appraise the PBS as you would a […]
PBSs should avoid any linkage to share price movements
No bonus should be pegged to the stock market price as the stock market price does not reflect the contribution staff, management and CEO has made.
Only a fool believes that the current share price reflects the long term value of an organisation. Just because a buyer, often […]
(extract from “The leading-edge Manager’s guide to success – strategies and better practices”. The book is available Amazon, see link on www.davidparmenter.com
By David Parmenter
Performance bonuses give away billions of dollars each year based on methodologies where little thought has been applied. Who are the performance bonus experts? What qualifications do they possess to work […]
The balanced scorecard (BSC) was one of the major breakthroughs in the nineties. The groundbreaking work of Kaplan and Norton brought to management’s attention the fact that strategy had to be balanced, needed to be implemented and performance should be measured using a more holistic approach.
Unfortunately many performance-related initiatives have failed and the BSC has […]
An extract from my “Implementing Winning KPIs whitepaper” which can be acquired from http://davidparmenter.com/how-to-guides)
Nobody has done more than Kaplan & Norton (K&N) to ensure that strategy is balanced, well thought through and is implementation is monitored and managed.
The Harvard business school paper was a master piece and the follow on book “Translating strategy into action […]
Myth 16: Indicators Are Either Lead (Performance Driver) or Lag (Outcome) Indicators
I have lost count the number of times I read Kaplan and Norton’s original masterpiece “The Balanced Scorecard: Translating Strategy into Action” to try and understand the lead lag indicators argument until I realized my difficulty in understanding lead lag indicators was a result […]
Myth #13: Monitoring Monthly Performance Measures Will Improve Performance
Show me a monthly performance measure and I will show you a result indicator, a key result indicator or a performance indicator. It will never be a KPI! How can it be key to your business when you are looking at the measure well after the damage […]
Truly great companies know their critical success factors (CSFs) and communicate these to their staff (Drucker called these key performance areas). Yet many organizations have not distinguished their critical success factors from the myriad success factors. Teams are thus often travelling in a direction very different from the intended path.
As Exhibit 1 shows even though […]
Myth 10: There Are Only Four Balanced Scorecard Perspectives
For almost 20 years the four perspectives listed in Kaplan and Norton’s The Balanced Scorecard: Translating Strategy into Action (Financial, Customer, Internal Process, and Learning and Growth) has been consistently reiterated by them.
I recommend that these four perspectives be increased by the inclusion of two more perspectives […]