More on The Tragedy of the Commons: Holding Managers Accountable for Good Stewardship

In yesterday's post, I shared a comparison between the challenge of making merit pay work and the classic dilemma The Tragedy of the Commons.  The tragedy is played out - and the prospect of performance based pay ultimately doomed - when individual managers put their short-term interests and those of their employees (i.e., everyone gets the maximum increase available) ahead of the longer-term interests of the overall group (the organization).  Addressing this particular version of the tragedy, I maintained, requires holding managers accountable for being good stewards of the organization's resources.

Andres Acosta, a reader and HR blogger in his own right posed some great questions in the comments to that post.  If I may paraphrase Andres:

1. How do we do it - hold managers accountable for their roles as stewards?
2. What are some processes, tools and practices that can help motivate managers to put company long-term success before the immediate compensation pressures of their team?

I know my readers will have some great thoughts on these questions.  Here are a couple of mine just to get the ball rolling:

1. I hold that accountability starts with consequences.  If, as a result of putting his/her immediate interests ahead of those of the organization, a manager encounters only positive consequences (I am a hero to my team!) and no negative ones, I would say that nobody is holding that manager accountable for doing otherwise.  Alternatively, if that manager's superior were to challenge and express concern about the action or if the manager were called to defend his/her action by/to a forum of peers or if the manager's performance were assessed as "needing improvement" directly as a result of the short-sighted and self-serving nature of the action, these negative consequences might cause the manager to rethink his/her approach.
2. One practice that I would suggest considering is incentives based on group performance (I'm a compensation consultant - what did you expect?).  Seriously, I wish I had a nickel for every senior management team (or even middle management team) I have encountered who are incented largely or entirely on individual performance, but whose CEO (or Board or HR Manager/Director) complains loudly about silos and a lack of cooperation.  Want them to act like organizational stewards?  Then pay them like organizational stewards - not individual contributors!

Let's hear what you think! 

Comments

[Andres]

Not sure how to make the trackback link work, but I posted a response on my blog. Here's part of it: "One practice that my current employer has put in place is the goal of informing, training and talking about key financial measures more regularly with front-line leadership, also known as open book management.Though not a new idea ... implementation can be problematic for those companies whose managers do not come into leadership positions already familiar with financial measures. For a corporation that truly wants empowered front-line leadership, the kind of folks that make decisions based on big-picture results, teaching key metrics and a basic understanding of core financial measures would be a crucial skill to address in New Manager Orientations.

[Wally Bock]

Before I begin, let me drive some stakes in the ground. There are no perfect systems. There are no systems that are fair to everyone in every situation. There are no systems that cannot be gamed. Now …

I think the core is in your second point: compensate for group performance. It seems like the