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For the past two decades – as the "pay for performance" mantra has dominated – companies have concentrated on designing performance yardsticks to justify soaring pay levels.
The errors should include both the statistical errors (due to finite sampling) and the estimated systematic errors (for example, due to the use of incomplete performance yardsticks).
Most of Mr. Moynihan's pay — $6.1 million — was in the form of stock grants that vest only if the company meets performance yardsticks over the next three years.
How do you counsel a young executive who, schooled during the prosperous 90's, never expected to have to fire people or cut costs, and then looks up to see senior management pigging out and demanding excessive compensation, free from performance yardsticks?
Forbes.com looks at several performance yardsticks and identifies bosses who do the most for the least reward.
In this case, other performance yardsticks should be considered, among which the system throughput is the most common[43 47].
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Playing in the pit or dancing onstage, I was part of something bigger than me, but there was nothing to measure in my performance and no yardsticks to hit.
Hard-bitten executives may consider it absurdly indulgent and financially untenable to concern themselves with such theories in a world where bottom-line performance is the yardstick of success.
Two years ago, then transport minister Norman Baker infuriated some train operators by trying to make the so-called "right-time" – punctuality as it appears on commuters' watches, expectations and real-life plans – the default measure of lateness, rather than the 5- or 10-minute relaxed "public performance measure", the yardstick on which reputation and commercial franchises are judged.
For the present study the yardstick is performance in the MRCGP and MRCP UK) examinations, and the yardstick of the Annual Review of Competence Progression is analysed in a separate report by a different team.
Many, if not most, enterprises rely on faulty yardsticks of performance, favoring financial measures that do not truly capture their businesses.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com