April 23, 2021

Indexed performance measurement is the heart of Obermatt's history

In this German interview, Carola Repky and Hermann Stern from Obermatt reconstruct the origin of indexed performance measurement and its later integration into executive compensation. Obermatt started indexed performance measurement in 2001 and implemented relative performance measurement in compensation systems for the first time in 2009, which was new in Switzerland at the time. Relative performance measurement is a more reliable way to motivate executives in any economic environment. The first Obermatt customers are still satisfied customers today.

Consulting is important when introducing indexed performance measurement, as mistakes may later cause unnecessary costs for the company.

The coupling of compensation and planning is especially problematic, because this leads to realistic, therefore average, goals. Companies should avoid the coupling of remuneration and budgeting. With the Corona pandemic, this has also become practically impossible, because now it is hardly feasible to make reliable plans for the future. It makes more sense to use so-called rolling forecasts which give the company the flexibility it needs. Such flexible planning systems are supported by indexed compensation, which does not require any agreed compensation targets at all.

Even in a crisis it is important to know how well you are coping with the crisis because even if the figures look bad, it may be that you have done better than comparable companies. If you know where you stand in relation to the market as a whole, you also know better what tactical priorities to set.

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