Who said, “Pay for performance plans can’t work in every
industry.”

For decades, people have said that certain professions
could not be paid based on performance.  The basis of the
argument against pay for performance was that you can’t
measure individual performance.  I have not found this to
be true, but many people continue to argue this point.

However, at the very least, you can measure the impact of
collective performance.  And Kent State University has
proposed such a program in its latest collective
bargaining agreement for its faculty.

Kent State has created a “Success Bonus Pool” that will be
divided among faculty if the University (1) improves
retention rates for first year students, (2) increases the
research dollars it generates, and (3) increases the
amount of private money it raises through its foundation.

HR CONTRARIAN POINTER: My hat is off to Kent State. 
Rather than creating a pay for performance program that
pits one professor against another or one department
against another, it has created a program that is in
essence saying, “If the University wins, you will win
because we will be sharing the rewards.”

My final comment on the book, “What Got You Here Won’t Get
You There,” by Marshall Goldsmith is about the use of
monetary fines as a method for getting managers to change
certain character flaws.

If there is one thing that senior managers understand, it
is money.  Dollars tend to be a universal measuring stick. 
As such, Goldsmith advocates the use of financial fines
each time a manager exhibits a behavior that the manager
wants to correct.

An example would be a manager who wants to reduce or
eliminate the behavior of “making destructive comments.” 
This manager would elicit the help of peers and
subordinates who would keep a daily tally of the manager’s
transgressions of this behavior.  The manager would then
be required to place $20 per incident into a fund to be
used for some purpose such as an office lunch.

HR CONTRARIAN POINTER: With senior managers, monetary
fines can be very effective at getting the person to pay
attention to the number of times that he/she exhibits a
flaw. 

A key to this tactic is the full agreement and cooperation
of the manager and his/her subordinates and peers.  The
last thing you want to do is to have the manager begin a
new bad habit such as “killing the messenger” every time
someone charges the manager $20 for catching the executive
“making destructive comments.”