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Pay for Performance Includes Dough for Decisions

As HR practitioners, we all encounter people in positions of power that are apprehensive about making decisions. There is a counterintuitive element to this, as one of the founding principles of our economic system is that people’s salaries reflect their level of responsibility. As a rule, greater responsibility means a bigger pay cheque.

It makes perfect sense: the higher you climb on the corporate ladder, the greater the impact of your decisions – or indecisiveness – on the organization. If a President, CEO, Executive Director or General Manager can’t come to a decision, an entire organization goes into waiting mode. As a result, companies lose agility, speed and their competitive edge. Your best and most-driven people will get frustrated and leave, while it becomes harder to attract and retain new talent.

There are various reasons why people in higher positions don’t exercise their decision-making authority. Some are procrastinators, some don’t like making decisions and some don’t like choosing sides. Others are afraid to make a bad decision and suffer the consequences, or they want to have all the facts first – and no one will ever have all the facts. A phenomenon we know quite well is executives who bring in consultants to do the heavy lifting and propose decisions they don’t wish to own. In that case, companies end up paying both the executive and the consultants.

U.S. General H. Norman Schwarzkopf, Jr., implored: “When in charge, take command. Leaders are often called on to make decisions without adequate information. As a result, they may put off deciding to do anything at all. The best policy is to decide, monitor the results, and change course if necessary”. According to Schwarzkopf, “a bad decision is better than no decision at all. And if you have competent people in your organization, a bad decision will be corrected at the lower levels”.

Some executives govern based on polling data and surveys – they do whatever they think is popular and that often depends on whomever they saw last. If they’re at a conference and a speaker sings the praises of the 360 degree review, boom, they instruct HR to introduce it right away. If they hear on the car radio that the latest trend in employee wellness is flu shots, wham, the company needs a clinic this week. If they’re at a birthday party and one of the guests had a colonoscopy, alright, the entire executive team needs a colonoscopy. Think I’m exaggerating? I know an executive who emailed colour pictures of his colonoscopy to his team.

If leaders don’t want to make decisions or they’re in over their heads, why do they covet a position where they are expected to make decisions, some far-reaching, on a daily basis? At least a number of them must recognize the disconnect between the position’s requirements and what they bring to the table. These tend to be people who aspire to titles, status, company cars, dinner invitations and complimentary country club memberships, but shudder at the thought of making a decision and dealing with the fall-out. Because of their lack of fit, they’re miserable and spread their misery to the entire organization through their direct reports.

One of the problems is that people are being promoted because they’ve been around for a number of years and ‘it’s their turn’. I once heard a senior manager justify two proposed promotions by saying ‘I want to give them something’ (even though there was a record of sub-par performance). This goes on in many organizations and represents a massive misallocation of resources and opportunity cost.

Let’s take a bank branch, for example. The Branch Manager has a salary of $100,000, part of which is for making decisions based on experience and skills. There is also an Assistant Manager who makes $70,000, as that position comes with lesser responsibility. If the Branch Manager is unwilling or unable to make major decisions, I would say that he or she is overpaid.

From my own practice, I knew a manager who kept complaining about a certain employee but, at review time, consistently refused to go on record with these complaints. The reason? She wanted to be liked by her staff and figured that holding people accountable and initiating corrective action was HR’s job, not hers. The result was that incompetent people stayed in their positions and continued to receive bonuses they didn’t earn, while the manager was getting paid for decisions she didn’t make.

In terms of solutions, a simple first step is to record indecisiveness on performance reviews. This way, you hold people accountable for not delivering on a good chunk of their obligations, which are ideally listed in detailed, up-to-date job descriptions and signed off on by the incumbent. If someone consistently avoids making decisions and this issue is recorded year over year, the employer builds an excellent case for holding off on salary increases and performance bonuses, and for not promoting this person to a position of even greater responsibility.

The stated intent of many organizations is to nurture talent and build a leadership culture. However, just stating it is not enough. Ronald Heifetz, Founding Director of the Center for Public Leadership at Harvard’s John F. Kennedy School of Government, stated that “leadership is what you do, not what you are”. A president I worked for said that ‘strategy is 90 % implementation’.

It’s not about good intentions, great plans and lofty goals – what matters is what you do to realize your goals. We need to promote people that have a consistent record of stepping up to the plate and doing what’s right for the organization. When it comes to documenting and developing these skills, or the lack thereof, HR has a key role. The organization as a whole can benefit greatly.

Evert Akkerman is a Newmarket, Ontario-based HR professional who has worked extensively in the private and non-profit sectors and freelances in PR and communications. He founded XNL HR in 2012 and can be reached at and 289-338-4001.


  1. Great post Evert. You make some great points and I’m sure most of us have seen this happen. I remember being on the operations side of businesses and thinking to myself “Why isn’t my boss making the necessary decisions. It’s affecting us all.”

    Thanks for sharing!

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