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Monday, November 12, 2007

A Lesson from Baseball for Business

If you’re a business owner looking for some tips on managing employees, then don’t look to the New York Yankees for guidance. Specifically, in the matter of manager Joe Torre, the Yankees provided a case study on how not to manage employees.

In a November 5 article in Newsday (which can be read in full at here), I noted that, based on his record with the Yankees over the past dozen years, Torre “was an employee with the best performance in his field.” But the Yankees – namely, owner George Steinbrenner and his two sons, Hank and Hal – treated Torre with little respect. The team “hemmed and hawed about bringing him back, offered a pay cut and presented an incentive package correctly viewed by Torre as insulting… So now Torre is headed to Los Angeles to manage the Dodgers.”

The Torre case comes down to setting goals and measuring job performance. Here’s my rundown from the Newsday article:

“So what exactly is expected of a Yankees manager? Well, it would be difficult to decipher based on what Hank Steinbrenner said last month: ‘The objective of the Yankees since the '20s has been to win the World Series every year, just as the objective of Lombardi with the Packers was or Belichick and the Patriots. None of us think we can win the World Series every year, but that's the goal.’ Huh? Naturally, every baseball player, coach, manager and owner wants to win the World Series. But most also possess the common sense to understand that it's ridiculous to set a goal of winning a championship every season. And what about executives who make that the standard of performance, while acknowledging it will not happen? Sounds like you're setting people up to fail. (Got that, Joe Girardi?) I just finished teaching a class in the MBA program at Dowling College. In the ‘Small Business Management’ textbook used in the course, three key points were made regarding performance-based compensation: set attainable goals, include employees in planning performance measures and work systems, and keep updating goals. The authors noted: ’Performance-based compensation plans work best when workers believe they can meet the targets.’ Most of the students in the class did well. But if Steinbrenner & Co. had been enrolled, it's hard to see how they could have passed.”


Anonymous said...

You are right on the mark Mr. Keating!

Anonymous said...

A good lesson indeed. Home Run!