- Here is one more illustration of the power
of performance evaluation numbers.
I like this one,
because it shows how you can use accounting in the home.
In 1995 my family and I moved to Hong Kong.
One of the complications of moving to Hong Kong
was that my sons, who were 13 and 11 years old at the time,
need to travel to a private school.
I went with them to the orientation
before the first day of school.
We sat there in the orientation
and heard lots of beautiful things,
but I have to confess, that one thing stuck out in my mind
more than anything else.
The school principle announced that my sons
would have to pay 50 Hong Kong dollars a piece
to ride the school bus to and from school every day.
50 Hong Kong dollars is about seven US dollars,
so I'll use my illustrations in US dollars.
That's seven US dollars a day each.
Mm.
So I thought about that during the orientation.
I guess I should've been focused
on the orientation material,
but I thought about this $7.
I knew that my sons, as students,
could use the Hong Kong public transportation system
to get to and from school each day for just $1.
So I figured the Stice family savings
from public transportation for each of my sons
was $6 a day, each.
So that's what I was thinking about, bad guy that I am,
during the school orientation.
They were only mildly interested in my computations.
But I got their attention when I said the following,
here's what I propose, it will save our family $6
if you will ride public transportation
instead of take the school bus,
I'll split the savings with you.
I will give each of you $3 a day
if you take public transportation to school.
In that instant the deal was done.
Right then and there they agreed to it.
Did I ever again have to remind them
to take public transportation?
No, I did not.
We never had to discuss it again.
Each Friday they came to me after school
and I paid them $15 each.
Their $3 per day share of the savings
multiplied by five days.
Now there was one problem the first time
that there was a school vacation,
they had Monday and Tuesday off.
They came to me on Friday and stuck out their hands
and I gave them $9 each,
their $3 per day share of the savings
multiplied by the three days of school that week.
Well, they bitterly criticized their school
for having these holidays,
these holidays were costing them money.
They hated holidays after that.
The long Christmas break was the worst.
Cost them a fortune.
Now they were never sick to stay home from school,
they never missed school,
because we had this performance evaluation system in place
that caused them to do exactly what I wanted them to do.
That's the power of accounting.
If I can find the right thing to measure
I don't ever have to remind my employees again.
Or in this case, I didn't have to remind my sons again.
We lived in Hong Kong for three years
and I never had another conversation with them
about getting to and from school.
We had a performance evaluation system in place.
Accounting in the home, that's the power of measurement.