Value trees — aligning performance and pay

By Ming Young
|Canadian HR Reporter|Last Updated: 06/18/2002

Many organizations can’t successfully execute business strategy because executives don’t have a clear sense of how they affect it individually. The problem often stems from ineffective goal setting systems.

In selecting performance metrics for use in goal setting and incentive plans, businesses tend to rely on bottom-line financial measures such as return on equity or cashflow per share.

These measures are generally not well-suited for individual employee goals because they are not under the direct control of employees nor is it easy to provide useful individual feedback based on organizational performance.