CEO and Senior Executive Pay: Performance Management and Key Targets

摘要

Performance Management is always the 'Elephant in the Room' when it comes to pay. We find it easy to talk about market pay, pay structures, incentive pay and the like, but as with any role in paid employment the issue that is often avoided is the performance of the individual in the role. Getting this front and centre is not the problem, most employers and employees understand the importance of it, rather it is approaching it in the correct, respectful and timely manner that we find most challenging. So how do we get performance management processes working well? At the simplest level we suggest three areas for managers to focus on: 1. Understand what your role is in performance management and have the necessary training to do it well 2. Have the targets set and agreed ahead of time 3. Set the performance management meetings for the year ahead and allow time (both parties again) for both preparation and actual meetings. If this was easy and we all did it, I wouldn't be writing this. All of these steps require work to get it right for your individual circumstances. Understanding the role of meetings, so that they supplement information gathering and recording, is critical. Many of the online systems that are on the market today have worked well to solve the administrative issues of information gathering, storage and milestone reminders, but their role is not to replace the human interface which remains the key part of ensuring performance management is a effective tool for any organisation. The chart below from our recently released 2014 CEO Remuneration Report shows the other tools which respondents use and also form part of the performance management equation. All in our view are critical but not necessarily used at the same time.