• 8th July 2009 - By proteman

    Did you read the article in the New York Times about the jailor who made a fortune by letting his prisoners go hungry? Apparently in Alabama, there was a law allowing sheriffs to pocket any money left over after they’ve paid for prisoners’ meals. Over a few years, he’d pocketed almost a quarter million dollars.

    Of course he gave them corn dogs, peanut butter and scraps. That’s what he was incented to do.

    It seems obvious, but there’s a good lesson here for business. You get what you reward.

    In our performance management practice we often see leaders incenting one desired behavior (like cutting costs or growing revenue), while inadvertantly encouraging a bad behavior at the same time.

    Here’s an example. A salesperson’s performance goals are tied soley to revenue growth. Of course that’s the key measure…but be careful what you wish for. Do you just want sales growth — at any cost? What if the salesperson cuts “bad deals” to make monthly goals?

    Lesson Learned:

    Metrics and incentives are a form of communication. They tell people in your organization what is valued. You get what you incent, so choose carefully to avoid unintended results.

    © 2009. Phyllis Roteman of The Loyalty Group, Inc. Sherman Oaks, CA.

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