Here’s an unusual step a CEO took to make his company more entrepreneurial: Ban annual performance reviews. Sam Inman, CEO of Comarco, a small 32-person outfit which makes universal charge adapters, stopped giving out annual raises and holding the annual review session after noticing the process seemed to build a sense of entitlement. Says Inman:
“Someone would get a $20,000 bonus or a $5,000 bonus, and from no specific criteria. Everyone expected it. It became a little mind numbing.”
Wanting to make employees more responsive to customers, he decided the culture needed changing. So instead, he does what he calls “lightening strikes” rewards, where employees are given random awards and raises immediately after achieving a set goal or reaching a new level of performance. “I don’t believe companies of any size make milestones off a calendar basis,” he says. “We’re breaking that system up.”
As a result, he’s handed out gift certificates to a shopping mall, a plane ticket to China for his head of manufacturing’s wife to visit while he was on an extended stay in Asia, and a four-day vacation for two for a particularly hard-working director of planning. “People don’t expect it,” he says, adding “we raise people’s salary when we think they should get it.”
At the same time, he changed senior management’s compensation, getting away from “management by objective” goals—the sort of things “you’re supposed to do in the first place,” Inman says, such as getting a sales contract completed on time or deadlines for new product development. He replaced such task-oriented goals with stock options for senior executives to help better align executives with shareholders.
While some might say too many stock options can lead to an unhealthy focus on stock price, Inman says the move was needed. He acknowledges that stock options “can get people dong unnatural things,” but says the balance of performance-based options should help make sure executives are focused on the long term. “This company, in this case, was so far removed from being focused at all on what the share price was.”
http://www.businessweek.com
0 komentar:
Posting Komentar