MBO: the trap of measurement without value | Report

On 10 April, a new appointment of Alveria Talksthe webinar series dedicated to the evolution of HR systems and performance management. l webinar, "MBO: the trap of measurement without value"., was attended by Filippo Cannavò and Francesco Angelinowhich explored the criticalities and opportunities of incentive systems based on MBO (Management by Objectives)combining a consultative approach and application demonstration of the platform HCMS ,.

Incentive philosophy and MBO system design

The focus of the webinar was on the design of incentive systems and the risks associated with the misuse of MBOs. Filippo Cannavò highlighted how many systems fail because they are limited to the performance measurementlosing the connection with the real value generated for the organisation.

La incentive philosophy is therefore a central element, as it defines:

• consistency with corporate culture
• alignment with the strategy
• orientation towards organisational behaviour

An effective system must guide behaviour without forcing it, maintaining a balance between simplicity, clarity and impact.

Involvement of top management

In this context, a truly effective MBO system requires the active involvement of top management, indispensable element to ensure consistency and sustainability over time.

In particular, it is crucial:

• establish a cross-functional remuneration committee
• aligning strategic and operational objectives
• avoid designs isolated from corporate governance

Only through a shared and transversal supervision is it possible to build incentive systems that are truly integrated into the business strategy.

The 'Four Cs' framework and MBO tools

To support this approach, the framework of the Four Cs (Company, Customer, Contribution, Capabilities)used to design coherent, value-driven incentive systems.

This model makes it possible to define objectives that are:

• strategically relevant
• measurable
• really additional to the expected results

Within this framework are the main operational instruments of MBOs:

• GateBonus access thresholds
• KPIperformance indicators
• Multipliersbehavioural levers
• Cut-offEconomic and sustainability constraints

These elements do not only perform a technical function, but also contribute decisively to the clarity and communicative effectiveness of the incentive systemreinforcing its understanding and adoption within the organisation.

The HCMS MBO module: flexibility and management autonomy

In continuity with the illustrated methodological approach, Francesco Angelino presented the main functionalities of the HCMS MBO modulehighlighting its ability to support the management of incentive systems in a flexible and scalable way. The solution is characterised by a high level of operational autonomyallowing HR functions and managers to govern processes directly, reducing dependence on IT and ensuring faster adaptation to organisational needs.

Multi-campaign management and configurable workflows

In this context, the platform allows even complex scenarios to be managed in a structured manner, offering the possibility of

• managing multiple MBO campaigns in parallel
• configure customised approval workflows
• trace each step of the process in a timely manner

Autonomous configuration of objectives

Consistent with a flexibility-oriented approach, HR and managers can work autonomously to:

• defining different types of targets (standards, gates, triggers, skills, multipliers)
• managing weightless targets, particularly useful in contexts such as the sales force
• quickly adapt the system to organisational specificities

Incentive curves and calculation models

The platform also allows the construction of highly customisable incentive models, through:

• linear curves
• step curves
• qualitative or on-off models
• flexible and configurable calculation logics

Skills and integrated assessment

A further distinguishing feature is the integration between MBO systems and competence evaluation. In fact, the platform supports:

• self-assessment
• manager assessment
• 360° feedback

with automatic calculation of ratings and full integration into incentive systems.

Digital signature and audit trail

Finally, from a governance and compliance perspective, the system guarantees high standards of traceability and control, thanks to

• electronic signature with system log tracking
• integration with digital signature tools such as DocuSign
• complete traceability and preservation of documentation

Beyond measurement, towards value

The webinar highlighted how the true value of MBO systems does not lie in performance measurement alone, but in the ability to build systems consistent with strategy, corporate culture and organisational behaviour. Through an integrated approach between consulting and technology, Alveria confirms itself as a benchmark in the HR tech Italiansupporting companies in transforming their performance management models.

Upcoming Alveria Talks

The next webinar, scheduled for 21 April, will be devoted to the topic of variable remuneration splitting for supervised entities. The meeting, entitled "From theory to practice: LTIs that really work", will delve into regulatory and application aspects for banks and insurance companies, with the participation of BCA Legalboutique law firm specialising in labour law and human resources management.

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The full presentation of the event