Pay for the World Series

Every company sets their goals at the beginning of the year. Some want to see an improvement from the year before, some want to reach breakeven, some want to move past break even, some want to be among the best...and others have one goal in mind, being the best.

The same is true in baseball (where breakeven is a .500 record, past that is a winning season, and being among the best means making the playoffs). And in New York, for the New York Yankees, there is only one goal, especially under the rule of the Boss, George Steinbrenner: Win the World Series.

So why, then, do people criticize Joe Torre's latest contract offer which would have had a much lesser base salary but bonuses that would kick in depending of the performance of the team in the playoffs? Furthermore, why did people have a problem of his salary at all consider he was still going to be the highest paid among his peers? And, lastly why would people have a problem with the contract only being for one year, but renewable upon Torre's team meeting the goals of his Boss?

There are different views on this. Ryan Johnson from World At Work writes that the media coverage of this and the reaction of Torre has dealt a blow to pay-for-performance. Charles Green's (co-author of "The Trusted Advisor" with David Maister), writes that the pay-for-performance model doesn't work and actually is the reason Joe Torre, a dedicated, team-oriented player left.

I happen to fall on the side of Green (which side do you fall on?). Torre's problem wasn't a need for extra incentive to win nor was it, as we discussed yesterday, that his team wasn't successful (and the argument can be made that he was very successful and just fell victim the past couple of years to the crapshoot that is the playoffs). Pay-for-performance is a great model if you need to create incentive for a person, but when they already have their beliefs in the right place, it can just serve as the "perfect" underhanded insult in contract negotiations and is why, in Torre's press conference afterwards, that he claims he left.