A post luca Baiguini
Dan Ariely presents often ideas that provoke reflection.
This time, in an article for Harvard Business Review, if it is taken with the fact that often the managers are evaluated based on the results of their decisions, rather than on the quality of decision making, without taking into account the fact that a number of facts accidental and unpredictable may be the cause of poor performance.
What should be assessed, however, is the quality of decision making that led to those results.
Ariely admits that it is not possible to completely avoid the assessment based on the result, but recommended to create a system to not rely too heavily on probabilistic outcomes.
Here is his recipe, in four points:
- Changing the mind-set
For companies working in complex and unpredictable, the first step is to recognize that rewarding results is not a great idea. - Documenting assumptions
If the assumptions are valid, but the circumstances have changed, a manager should not be punished (but not awarded) - Create a standard for effective decision-making
- reward good decisions in the moment they are taken
Our focus on results is understandable. [...] reward results is relatively easy, the more complex a system that rewards the decision-making. But, as I said, the fact that something is "difficult to achieve" is a bad reason not to do it. Especially when that thing can help reward and retain the people most of all can help you grow your business.
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