Two reports this week heavily underscore the need for businesses to keep a close watch on state tax issues.

Measures of the business-friendliness of U.S. jurisdictions usually focus on straight tax rates, but Forbes breaks from the pack with a look at state tax burdens based on a simple, rough-and-ready metric: the number of private-sector workers compared to the number of government workers and needy people in each state. more

For organizations with calendar year-ends, November is typically the month for finalizing next year’s performance plans. While these can feature a balance of measures, these incentive plans often focus heavily on tying bonus payouts to achieving budget targets. Many admonish the need to “pay for performance.” But I question, “What are you really doing?” Is it “pay for performance” or “pay for negotiated results”?

The process begins with managers submitting their proposed budgets. These often feature low goals (which could be called conservative but are more often known by their common name of “sandbagging”). Corporate must then reject them as too low and/or begin negotiating to leverage them up to a minimum acceptable level. The back-and-forth has several negative consequences.

1. It wastes valuable management time and costs money.

2. It strips local managers of their natural accountability as their plan is squeezed into corporate’s goal.

3. It causes managers to hoard information. No one wants to share information that could be used against you.

4. It can lead to unethical behavior.

5. It causes the organization to limit their potential by focusing on easy-to-achieve targets.

6. It rewards the best negotiators instead of the best operators.

7. In the words of Jack Welch, “this budgeting sucks … the energy and big ideas out of the organization.”

So, is tying incentives to budget targets “pay for performance”? No. At best, it is pay for negotiated results. It is a management process that can kill your organization and is part of the dumb stuff that finance should stop doing.

For more on what you should be doing instead, see my blog post on “Rewards & Incentives” at Adaptive Planning’s community site here.

Join us in the Beyond Beyond Budgeting Round Table here. ###

For the past two years, at least 85 percent of global companies report experiencing at least one instance of fraud within their organizations. During the same period, more than one-quarter of all companies report at least once incident of information theft.

These statistics, and many more, are available in the 2009/2010 edition of Kroll’s Global Fraud Report.

And, if you’re a fan of long-form narrative journalism, here’s an abstract of a captivating profile of Kroll and its founder. ###

A point that a GRC expert shared with me last month continues to echo in my mind.

The expert mentioned that each manager and employee possesses his or her own risk profile. If organizational tone and GRC processes are not strong enough, the risk health of a company relies much more heavily on dozens, hundreds, or thousands of these individual risk profiles.

It’s a troubling thought, but it’s also a reality of business – and human nature.

Even with sufficient GRC processes in place, these individual risk profiles still go a long way toward determining the quality of a company’s GRC culture. There are just too many GRC- and ethics-related judgment calls – organizational gray matter – for processes and technology to completely address the human element.

That’s why technology-skeptical ears perked up when another GRC expert mentioned the phrase “human process management” (HPM) this month. HPM focuses on bringing visibility and structure to the “unstructured, ad-hoc human-to-human interactions,” according to Jacob Ukelson, the chief technology officer of ActionBase.

I asked Ukelson to flesh out HPM and explain how it helps organizations to address their gray (risk) matters. ###

Managing and supporting a desktop computer costs several times more than buying it initially. The $300, $500, even $1,200 the organization pays for the computer will be a marginal expense compared to what the organization will pay to support it over the 3 to 5 years of its typical life.

The costs arise from configuring, patching, and supporting the machines. According to a 2008 Gartner report, “for a large company, the cost of purchasing a desktop PC may be only $1,200, but, kept for four years, the total cost of ownership (TCO) could be as much as $5,867 per year.” Most companies I talk with pay substantially less than $1,200 for a desktop system, but the 5x TCO doesn’t change.

There are a number of things companies can do to drive down desktop TCO. Some, such as desktop virtualization, have been noted here previously. Another approach uses various PC life-cycle management (PCLM) tools, according to Gartner. more