Executive Compensation and Performance Goals

As part of an LA Times business section focused on executive compensation, business columnist David Lazarus wrote on Sunday about CEO bonuses.

Just as we’ve been advocating for 15 years, Lazarus believes that bonuses should be “…based only on the attainment of clear performance goals, such as increases in a company's net income or market share.” He also feels, as do we, that bonuses and incentives (such as stock options) should be available to all employees doing a good job, not just the CEO.

This topic seems to get media attention mostly when lots of money is at stake, like when CEOs receive 8 figure bonuses despite declining performance at their company. It is critically important every day, at every company. Do more good stuff, get paid more! Great idea! I’d like to see the issue of incentives tied to performance be front and center when economic and human capital experts discuss how to get the economy back on track!

Radical Talent Management

There has been very little written on a topic I’d like to call Radical Talent Management. Hiring and talent management continue to evolve at a much slower pace than other technologies that are critical to business success.

The word “radical” is derived from the Latin “radicalis” which means root, basis, or source. I would bet that most of us think of the word radical not by its first or second dictionary definition (of or relating to a root; growing from the base), but by its third or fourth definition: Marked by a considerable change from the usual or traditional; tending to make extreme changes.

In First Break All the Rules, Marcus Buckingham and Curt Coffman told us that one of the things great managers do differently is to define TALENT as “a recurring pattern of thought, feeling or behavior that can be productively applied.” The authors go on to differentiate talent from skills or knowledge, and advocate hiring based on talent, and in the book’s appendix, list the 12 Core Questions that correlate with success. My favorite is the first: “I know what is expected of me at work.”

I want to advocate combining these four ideas into a new way of managing talent:

• Radical talent management must start at the root, which is how we define the job.


• It must also be about considerable change from the usual and traditional.


• Employers must define what is expected of each current employee and new hire, in SMART terms (Specific, Measurable, Achievable, Relevant and Time-Bound), by producing a business plan with performance objectives.


• Deployment of current people, hiring of new people, performance evaluation – all aspects of talent management – must be done by evaluating TALENT in the context of Performance Objectives. Only then can talent be productively applied!

Sounds simple? It is hard to believe how FEW companies follow the above four principles. So few, I’m inclined to call the idea Radical Talent Management. Let’s see if it catches on.