Ever thought why CEOs are so much concerned about the stock market and its value. It is because they are evaluated and judged on the basis of stock price. CEO’s pay scale and their compensation plan depends on their five years successful strategy. It has been assumed that incentives alone in the form of money motivates than. They can even get motivated through recognition and praise. Then why are they judged on the basis of stock value? CEOs have enough money they need. CEO’s are more concerned about stock value because this is how we measure them.
Psychologists say that human beings are measured on the basis of their profession and field. When you measure someone on the basis of certain merits it compares them to master in that field. For example teachers or professors are measured on the basis of their student performance. Even if teachers find interest in experimenting and playing with students they need to focus on curriculum to prove themselves. They get points and scrutinize for their academics. Even if they are not striving for wealth, they should not think about making more money. Still they need to perform because they are measured on that terms. Same goes with students too. In countries like India China students are measured on the basis of their number they get in personal assessment rather on what they know. However, US numbers hardly play any role. They are more concerned towards what practical knowledge a child possesses.
7 Ways To Measure True Success.
- Profitability.
- Number of Customers:
- Satisfaction Level of Those Customers.
- Employee Satisfaction.
- Your Satisfaction.
- Level of Learning and Knowledge.
- How You Spend Your Time.
Conclusion
These are the reasons why every day CEO’s try their hard to improve the company’s stock price because everyone around them or whom they meet judge them on the basis of these parameters only. Everyday they are hiring and removing someone, meeting a high profile to get ideas is part of strategy to improve numbers. Everyone watches them and praises them if the number increases and criticizes them if it goes down. If we want to change CEO’s behaviour and working we need to change our perception measure. As these numbers are highly dynamic. They vary according to demand, economic condition, situation, goal, industry type and choice. These parameters are difficult to analyze accurately and tough to measure. But if we focus on things that are easy to analyze we can improve.
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