When I started my authorship venture several years ago, I stumbled across a concept which I eventually typecast as “Silent Problems.” In my book Without Warning, I identify 5-key areas where silent problems exist in an organization. They are:
- Compensation
- Communication
- People
- Systems
- ISMs (race, gender, age…)
So it’s of little surprise that much of this blog reinforces and expands on the ideas offered in the book Without Warning. As an avid reader and silent problem scout I come across articles that expand and further refine the concepts. For instance, I received my S + B (Strategy & Business) newsletter today and two articles of interest were included.
Getting Rid of Grades to Boost Performance
Most companies grade their employees’ jobs using some kind of ranking or rating system based on job evaluation. The grades assigned are intended to assess fair pay for people doing the same work, and are usually public, like the letter grades of schools. In theory, these systems are supposed to help people manage their careers, by providing a comparison of jobs and individuals’ competence across a large organization. But in practice, they have a terrible side effect (a silent problem): They end up adding to the costs of bureaucracy, frustrating employees, and undermining leadership development…
The second article relates to compensation. It is a working paper over at the Harvard Business School. Here is the intro over at S + B titled Incentives and Unintended Consequences.
What if the current financial crisis were a result of poorly conceived goals? By paying mortgage brokers and loan originators on commission and then encouraging them to meet unrealistic sales goals, could banks have unwittingly precipitated their own demise? The authors of this paper believe this may be the case, and suggest that the tendency to focus too much on setting and attaining goals may be more common, and more dangerous, than we realize. Whether it’s quarterly revenue targets for sales executives or publishing quotas for tenure-seeking professors, performance goals are one of the most widely used tools for motivating employees. Citing examples such as the Enron Corporation scandal — which was set in motion when traders were remunerated for manipulating the energy markets to increase revenues for the firm — the authors argue compellingly that placing too much emphasis on performance goals may encourage unethical or unnecessarily risky behavior. They show that unattainable stretch goals can demoralize employees or encourage them to focus on one narrow part of their business at the expense of others. Although the authors agree that setting goals is an effective method to track achievement, they suggest that it be used in moderation.
Here is the full working article over at Harvard Business School titled Goals Gone Wild.
As history has illustrated and the future will continuously demonstrate, silent problems are a challenge inside every organization and are a primary factor behind economic failures around the globe. The sooner mankind accepts that silent problems are a normal part of our economic landscape and then put into action tools to ferret out and fix them the better.
Note: I identify several tools in the book Without Warning which is available at Amazon here to help achieve this desired outcome.
