The Problem of Compensating Solely on Performance

Author and MDV Venture Partner Geoffrey Moore describes the trap of compensating employees based solely on performance metrics. Developing new initiatives or ideas creates the “power” for a company’s long-term growth, so employees should also be compensated on this measure. According to Moore, “power fuels performance, and performance consumes power,” so why will employees help create new power if they are not held accountable for consuming it, nor rewarded for creating it.