Henry Mintzberg one of my favourite business thinkers lets rip in the WSJ: No More Executive Bonuses! Conventional wisdom seems to take it for granted that finanical incentives are the only way to ensure high performance. It’s based on assumptions that seem to go unquestioned but where there’s a lot of evidence they are false. Mintzberg gives a few examples:
• A company’s health is represented by its financial measures alone—even better by just the price of its stock.
• Performance measures, whether short or long term, represent the true strength of the company.
• The CEO, with a few other senior executives, is primarily responsible for the company’s performance.
He challenges them forcefully – highly recommended reading.
Hat tip: Bob Sutton