Re: MBO, Perf Reviews, Incent Pay & Quality

Kellie T Wardman (pegasus)
Thu, 22 Dec 1994 07:59:11 -0500 (EST)

As I am watching this debate about performance reviews and compensation
in a learning organization, I just thought I would share where we are at
with this issue at Pegasus Communications.

About two and a half years ago, under the vision of Daniel Kim (one of
Pegasus' co-founders), we started a performance review process that is
actually not a performance review by any standards, really.

We call them Personal Development Reviews (PDRs) and each individual in
the company has one every four months. This PDR usually lasts about two
hours, and in addition to the individual and the president of the
company, the individual can invite one other person to be part of the
process. Granted we are a very small company (10 people) so the just
about everyone reports directly to the president, but in a larger company
you could use the same framework but just with whomever the individual
reports to.

Before the PDR, the individual fills out three charts--one for their
four-month objectives, one for their one-year plan, and one for their
five-year vision. Essentially the person works through what they see as
their main roles, projects, responsibilities, and visions are for each of
these time frames. This is a good time to test new ideas, to get
feedback from leadership, and to vision and create a path of development
(a career track!) for the individual.

We have talked about issues of receiving feedback for performance in the
PDRs and have concluded that really feedback should be occurring
continually on a daily basis. And while it is a part of the PDRs,and
maybe the PDRs are a good place to summarize that feedback from both
sides, it is certainly not a main focus.

In terms of compensation, we have a long ways to go. We do have a
profit-sharing plan for all associates, and we have discussed ways of
using Peter Block's work in Stewardship to design compensation programs.
But we still have a lot to do. We have talked about individuals putting
together a contract for their work in the next year and then proposing
what kind of salary they need to be making, and then having discussion
about whether the salary is consistent with their level of
responsibility. I think this sounds great and based on what I have heard
about innovative compensation systems (people determining their own
salaries, etc) it just may work! But as I said, we are very early in this

Kellie Wardman
Publications Director
Pegasus Communications Inc
PO Box 120 Kendall Square
Cambridge, MA 02142-0001