The reason is that staff performance stimulation based on the KPI system became an undoubted dogma and a Zen zone for business. This idea is met with incomprehension, rejection, and even a storm of protest by many executives and business owners.
When managing a business using only performance incentives and metrics, it reminds the situation when you choose a remedy with a side effect exceeding its treatment benefits. As soon as we start to use it as a management tool to link employees’ income with performance indicators, we are on shaky ground. But analytics are good only for decision-making.
There is nothing worse than the executive making the decision blind without using analytics. Many business speakers talk about company digitization. Unfortunately, this approach appeared to be more disappointing than helping. I wanted to link the employee’s salary with individual performance, using their KPI results. I have expended great efforts on creating management tools, which would quickly and conveniently give any needed numbers, whether the inventory turnover or the dynamic of profit margin in a concrete sales channel and the productivity of each company branch.īut then, being an inexperienced executive, I have made a classic mistake - I have decided to make a KPI grade based on the data I got from invented management tools. Even a quick glance at company records was enough to understand - I was not controlling a lot. in philosophy and director at MIT, said, «If you don’t measure something, you cannot manage it.» Many years ago, when I was a young green CEO, this saying inspired me.
Hope that managers for bonuses will make your company more successful is like hoping that your child learns to play violin on their own for the sake of a new iPhone.
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