The CEO directly created the perverse incentive: actually hitting your goals only meant more work.
> How you apply it matters.
The CEO applied KPIs in a way that disincentived hitting your targets, and the team responded accordingly.
You say this as if employees are absolved of any responsibility to the performance of the company. You're not clever for saying, "Oh, 100% means we weren't ambitious? Then we'll work 80% as hard." In fact, I think you'd have to be pretty dense to not understand the intention of the KPI: set lofty goals and try to get there.
If you don't think it's working, why not go back with ideas to improve it, rather than doing less work? I mean, this company literally failed (from the sounds of it) and people here are blaming the CEOs KPIs versus the employees who intentionally work less to game the system. Strange.
I do care about my professional reputation. I'm highly skilled and understand how to improve social dynamics on a team, making me very valuable to have around. Clever leadership will figure out a way to align my skills with their own goals. But, if they don't, that's their problem.
That's the bottom line, isn't it? If the CEO wants to align employees' behavior and motivation with his own, he needs to structure the employees' compensation to be like his own compensation. If my compensation is just a "competitive" salary and a few token stonks, then I'm going to do a 9-5 job and hit the required 80% of my KPIs before I go home for the day. If my compensation consists of life-changing equity? I'll work days, nights, weekends, and holidays.
You think most 200+ Employee companies are unicorns?
As I said, I care about my professional reputation. When/if the company dies I want every single one of my former coworkers fighting to get me hired at wherever they land. You don't get former coworkers clamoring to get you in at their new shop by being a bad worker.
Companies want me to work for them, and former coworkers want me to work with them. I am just not emotionally invested in the companies who pay me a wage, I'm going to set reasonable boundaries on my time, and I'm generally going to respond rationally to incentives. Responding rationally to incentives includes considering if the extra work required to achieve a particular bonus is worth the effort, often it is not.
If you create a system which is abused by 100% of employees, that's on you. Everyone who works at a company does so for their own personal benefit. You can moralize about it if you want, but I doubt you would work for a company if it didn't provide an incentive structure of some kind.
> why not go back with ideas to improve it
I was a junior developer working for a 1500 person company. What should I do, demand an audience with the CEO, who lived in a different country?
Most people willingly turn their brain off when it comes to evaluating their daily/quarterly performance against that simple truth.
Doesn't sound like "less work", it sounds like they did the amount of work management wanted them to do. Just like working 40 hours a week is "less work" than 60 hours a week, but I'm not going to work 60 hour weeks just because of some sentimentality around the company being successful.
the description give didn't make me think it's the kind of workplace where the CEO is going around asking people, "what can I fundamentally change about our goal setting process?"
in any case, goals should be achievable, so if you punish someone for achieving them, you messed up
Tracking and measuring KPI is good, without it the company won't know it's current performance and how to fix / improve it (though beware on burnout). However when it's become target with financial incentive, it ceases to be good measure, because everyone will try to optimize things to reach the target.
Velocity (work complete / planned * 100%) should always be a measurement, because it can help to identify errors in workflow / team member, and prevent demotivation when they need to perform task outside their goal.
It boils down to that ridiculous "stretch goals shouldn't be achievable because you should be shooting for the unattainable". If you want to have that mindset, don't beat the exployees for achieving everything. Beat yourself for not curating their goals.
So, hypothetically if I busted my ass for three months straight to hit 100%, just to be told "Oh, your goals were set too low, so here's more work", what incentive at that point do I have to work even harder? The new target's 80% was my last target's 100%, which I struggled to hit (because as you said, these goals are lofty). So if I bust my ass even more, do even more overtime, what do I get then? "Your goals were set too low, so here's more work." Do I just continue this until I burn out? Or do I hit 80 of my target so my workload doesn't spiral out of control, and I get exactly the same bonus?
> I mean, this company literally failed (from the sounds of it) and people here are blaming the CEOs KPIs versus the employees who intentionally work less to game the system. Strange.
Employees gaming their KPIs is a reaction to and a direct result of the CEO's "if you hit 100%, you didn't work hard enough" policy. CEOs using constantly moving targets and increasingly unrealistic expectations to extract every last drop of productivity out of their employees is met with an equally maximizing reaction: employees find a maximum amount of time and energy they can spend such that the status quo is preserved and the bar doesn't move as high next time.
I would bet KPIs were not the main reason that company went under. Obviously we don't have specifics, and companies rarely fail for one reason. I didn't blame the CEO for the company going under either - I simply pointed out the perverse incentive.
If you are hitting your goals every quarter, that is a great thing - but I tend to agree, at the other end of the spectrum you have people setting easily achieved goals to check a box.
The real issue is weeding out people just there to check a box when you're small, and when you're large, it's designing a system that internalizes a lot of your employees are there to check a box.
More that you have to have realistic expectations when you structure an org, that people doing the work are going to pad and sandbag in successive tiers up, and people in charge of outcomes are going to push for bigger and more down.
Of course, we first would need to agree that this is desirable and that's probably the point where it breaks down.
Well the paycheck ends when the company folds. "Doing good work" is in the best interest of all parties.
So, you get another job. With great odds of increasing your salary more than you could at your current position. There's really few downsides for workers in having this attitude.
Additionally, at such a large company (1500 people), my individual efforts have little to no effect on whether or not a multinational corporation goes under.
Option A is being an average worker, not trying especially hard, not thinking about work outside of work hours, and having absolutely no emotional investment whatsoever in the wellbeing of the company - and potentially having to get a new job in a few years time, often with a pay increase
Option B is "doing good work", "going the extra mile", "being a rock star", putting in lots extra time and effort and emotional energy (for years!) - just on the tiny chance that your particular efforts will be the difference between the company folding vs. being successful
Option A sounds a hell of a lot better to me than option B.
You know what happened?
1. I got even more work. So much more that I no longer had the freedom to explore and think.
2. The carrot on the stick would be re-attached to a longer stick. It was never enough. I was performing "exceptionally" but my yearly review would never move me closer to my goal.
3. I would end up getting tied down in a bunch of stuff from (1) that ended up leading to burnout because I was no longer working in a place where I felt useful and needed.
4. I still got laid off.
Now, I just go to work and come home. I am pissed I even have to do pagerduty because 9/10 times the problem is someone wasn't given enough time, creating a bug, which was then subsequently never addressed because aGiLe methodology says you only move forward.
"High power" CEOs and PMP-certified project morons are the reason why people's care for your product ends with their paycheck. No amount of "demo days", "email updates", or metrics will fix it. I, and everyone who is like me, will game your metrics until they stop being useful. It's not malicious. It's an optimization. If you want me to do exactly what your metrics ask I will. Nothing more, nothing less. You pay me for 80 hours a check, you get 80 hours. Nothing more, nothing less. If you don't want me to think I won't. Afterall, I'd rather save my brain cycles for things I enjoy. You're paying me to squander my talent. That's YOUR problem. Not mine.