Executive Incentives and Turnabout Being Fair Play

 

What if, instead of having a "compensation committee" reporting to the board of major corporations develop the reward packages for executives, we let the employees design them?

I'm curious what would happen at a couple of levels...

What would the goals be?

What would the rewards be?

I'm going to go out on a limb here and say the goals will be 180 degrees from the compensation committee's goals.

I'm not going to far out on a limb to say the value of the awards would be much, much less than the compensation committee.

If you're an executive - could you handle that?  Would you ever ask your team to set your goals for you?

I think it would be a humbling experience.

 

Comments

[Scott Crandall]

Paul --- What (in general terms) do you think the differences would be? And why? Especially the differences in goals.
Are you saying (I'm shocked! Shocked!!) that employees feel that executives are less valuable than the committee (execs themselves) thinks they are? What a revolutionary concept.
I'd still like you to explore (related to this) what we discussed the other day: many (most?) people who reach exec levels are lacking the very people-oriented qualities they most need to be effective leaders. It seems the very qualities that get them noticed and promoted are contradictory or even subversive to what they need higher up.
Are exec leadership failures and poor corporate performance endemic to the way hierarchies are built and maintained? I don't know, but I suspect so, based on over 30 years of very close observation. Your thoughts? Others' thoughts?

[Paul Hebert]

The reason I left it open was I wasn't really sure - just somewhat sure and I was hoping for some input. My gut tells me the goals would be more communications and connection based versus purely financial.

I would think things like: Communicate with staff more frequently, communicate strategy more clearly, remove non-performing people more quickly, - basically the "people" stuff we talked about and less about how well they manipulate a financial report.

I think most employees want the company they work at to be successful - just not at the expense of its humanity. While the board is typically focused on the return on the stock (for public companies) employees are probably more interested in the "return on the experience of being an employee" - very different things.

In addition, many board members don't have to work at the company so their motivations don't take into account the human side of the equation.