Managers’ rich rewards for poor performance

http://www.theguardian.com/business/2015/jun/03/managers-rich-rewards-for-poor-performance

Version 0 of 1.

Nils Pratley’s comment on the £1m payout to Morrisons’ erstwhile boss Dalton Philips (Sacked with a bonus, 3 June) exposes the grim truth that management underperformance is being richly rewarded. The Chartered Management Institute’s national management salary survey, published today, reveals that this problem is endemic at all levels of management, not just at the top. Nearly a third (30%) of all managers ranked as underperforming were handed a bonus in 2014. This rises to 45% of all senior managers. The average bonus paid to underperforming senior managers stood at £8,873.

Unfortunately, it seems to be a lot easier to reward poor performance than to face the awkwardness of having difficult conversations with underperforming staff. Change must start at the top with CEOs’ pay, as there’s plenty of scope at that level to bring pay and performance more in line. To improve performance, managers must be prepared to have honest conversations with their staff and provide regular feedback and coaching. Managers should also have clear targets and be measured against them. Organisations and their employees will only benefit from a culture in which pay closely reflects performance.Petra WiltonDirector of strategy and external affairs, Chartered Management Institute