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June 25, 2014

Pugilistic Manner or Performance Management?

 
“It’s hard to believe that in today’s business environment, many organizations are still employing practices that not only don’t work but can also harm people. In these organizations, it’s typical for leaders to set the numbers and then monitor results to determine if people are reaching them. What they fail to understand is that results alone are not enough,” commented Dr. Aubrey Daniels, who coined the term “performance management.
 
The same can be said about government. Sadly, in government “leadership” too many opt for force rather than persuasion, which recalls our very founding as a nation, when people were being limited by their government rather than allowed to seek their own destiny.
 
So what does any of this have to do with tax? 
 
In reaction to a handful of companies that merged with a foreign company and opted for the new company to be headquartered in the lower-tax jurisdiction, some in the Senate demand that tax laws should be changed retroactively so that such companies would have to pay more tax. They argue that the “rules of the game,” which they created, should be changed because the rules are not working in their favor. Of course, the companies were playing by the rules, acting perfectly legally, and wise to save money where they can.
 
Performance management points to a better approach than throwing tantrums and suddenly imposing liabilities for past legal behavior. Relying on management skills and problem solving rather than brute force, Dr. Daniels might suggest:
  • “Change rather than blame. The role of leaders is not to find fault or place the blame, but to figure out why people behave the way they do.
  • Reinforce positive reinforcement. Everyone needs positive reinforcement to work effectively and improve.
  • Manage the consequences of change so people won’t resist it. More positive reinforcement up front, as the change is occurring, will yield more positive behavior toward the change.”
Comprehensive tax reform is the fix, with Congress producing a globally competitive tax code. Instead, Congress seems insistent on blame, negative reinforcement and abdicating responsibility, once again taking its lead from the authoritarian management handbook and now suggesting that each company proposing these legal mergers be grilled by the Senate.
 
While a rewrite may take longer than Congress would like, members only have themselves to blame. The time is long past for their self-serving pugilistic attitude to end and for good management to take its place.

 

  • TaxBytes-New

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