Monday, 29 November 2010

Do you Fear the End-Of-Year - like Judgment Day?

Targets - Selling targets, purchase targets, license targets, billable hours targets, call-close targets: if you work for a large company, you probably have some. Sometimes also called Key Performance Indicators (KPI's).
But did you choose them, or were they forced on to you - whose are they? Yours? Your company's? Or theirs?
And what is their goal - really?

If you're a salesperson, you get sales targets. If a marketing person, there are marketing targets. When you work for a systems integrator (SI), you'll probably have billable hour targets.

Some targets are soft ("contribute to a better brand image"), others are hard ("generate 500K sales revenue"), some are in between ("publish 3 articles or 10 blog posts on your expertise area" - what if you do 1 article and 7 posts?)

Do you have a fixed salary, and are your targets an extra, leading to a true bonus (more money) if you do well? Or do you have a variable salary, of which your targets are an inherent part, leading to a possible malus (less money) if you don't hit the baseline?

How are they measured, purely quantitatively? Is every billable hour a billable hour, or do internal hours not count, or for less? Do bookings count toward Sales, or has the deal to be closed - or do only paid bills account towards your sales target? Is all of that fixed and clearly regulated via written-down company policies, or does most depend on your manager's opinion - or, let's say, mood?

How much of these targets are in your control - or rather, what percentage?
If you don't make enough billable hours, can your account manager be made to pay for the difference because he did a lousy job attracting customers to you and vice versa? Or will that be considered your fault?
If you made enough billable hours but generated less revenue than expected, will your manager complain about that?
On the other hand, if you made less billable hours than targeted, but generated substantially more revenue than expected, will that be considered compensation?

The most interesting question is, what do these targets do to you?

Will you hesitate to take on an opportunity, because it might damage your targets? Will you take on an opportunity you really don't like, because otherwise your targets might get endangered? Worse, will an existing opportunity turn out to become unattractive because halfway through the agreements get changed, thus hurting -again- your targets?

Do you ever have targets that are fully in your control, or is that at most 50% or even less? Do you remain in uncertainty during the year, about how you will get rewarded at the end-of-year?
Worst, will achieving targets actually damage your reward at the end-of-year, because your manager will use that against you? Will he or she say "Well, you really did great this year with all your targets and bonuses, you so have been really rewarded already. Given the fact that the company hasn't been doing very well this year, we can't give you much of a pay raise - there are others that need to be rewarded as well"

Most of the so-called reward systems aren't about reward - they're more about punishment. At the end-of-year, you get punished one way or another because all these KPI's do is just add more variables to the equation - and there are always a few of them that aren't in your advantage.
You never asked for these targets, they've become part of your working life. If your salary increases, so does your "bonus" - making you even more dependent.
You can't separate the "bonus system" from your normal salary, they're inseparable. Yet the combined result is used by the company to indicate your total salary.
You can influence them a bit, but it's always the company raising the bar a few times more each year - regardless of how bad the economy is doing. If the economy is doing well, you get higher targets; if the economy is doing bad, they stay high because you have to make up for the bad economy.
You can never tell how well you did, really. It's always others who seem to decide and have the last word about that, sometimes waiving with an end calculation, but never how they exactly got there.

It reminds me of another system like that: people calling you a sinner and telling that you have to redeem yourself - by doing what they tell, of course.
And in the end, the best way to get you motivated for this seems to be:

"you'll be rewarded on Judgment Day"

Silly? Oh yeah, way silly. But it's worked for thousands of years...

I wonder how long KPI's and performance appraisal at EOY will work for you - don't you?

3 reacties:

Anonymous said...

Thanks for taking time to write about my pain. Hope the dinosaur gets extinct along with the parasites .....

These parasites live on the money I make, sucking my life and end of year tells me I did not work harder for their undeserving bonus. And in that process denying me even a very small cut from my hard earned billing rate. Somehow this is ethical.

Victim of Parasites

Ric said...

Research indicates that for anything beyond purely mechanistic tasks, bonuses are actually a de-motivator: see Dan Pink on this idea (short version) or longer version at

Martijn Linssen said...

Thank you, Anonymous - looks like I hit a nerve there. I hope (and trust) you will find reward and recognition in the end, and leave the parasites to self-devour - it's a big world out there, with endless possibilities

Ric, thank you, interesting and great vid! Can recommend it for everyone. Indeed, at some point, employees will perform a task their manager can't (understand) - to me that's the break-even point where systems like these will converge from success to failure

Implementing them nonetheless simply is an overt sign of lacking the ability to judge, and the unwillingness to trust - and the employee gets that message, and handles accordingly. But it will take a good (actually, bad) while before he starts to revolt, and disagree

And by that time, more than a few victims have fallen - if that ever gets out, that is...

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