What Goes Around * Stop Incenting Bad Behavior

As a blogger, you meet many interesting people and make several acquaintances through the blogosphere that you might not otherwise. One such relationship for me is with Doug Shaw, founder of What Goes Around Limited. Note the link when you visit his site – Stop doing dumb things to customers. That’s Doug’s attitude. We all know what we SHOULD be doing… so just step up and do it already! I like that attitude. It reminds me of a word I learned from an American colleague recently – it shows some “moxie.”

In a post last week, Doug went on a tear after hearing about a plan to restore short term financial incentives (bonuses) after all the mess they caused in this recession. Doug says it better than I can:

“OK, so having seen first-hand the value destroying, anti-collaborative behaviour that short term financial incentives drive, we’re gonna do it all over again. With a twist. We’ll let these sweet bonus carrots dangle a little further away. That way folks will have to focus even harder on the carrot, and from there I put it to you a stronger focus on the value destroying behaviour necessary to bag the carrot will emerge. Not happy? Furious more like!

“The case to ban financial incentives was one I first became really active on back in December 2008. We ran a workshop with some bright enthusiastic minds in and around BT. The purpose of coming together was to uncover the most effective ideas needed to improve customer service. Banning financial incentives was an idea agreed on by all in attendance. There were other exciting ideas around clearer dialogue and communication but it was the “don’t incentivise me, just pay me” discussion that flared. Since then I’ve looked in all kinds of corners (University of Miami, Harvard, the studies of Dan Pink to name a few), and discussed with all kinds of folk. And I find lots of useful practical examples of why these bonuses don’t work. I’ve pulled this journey together into a white paper (not a white riot) which you are welcome to take, read, argue with, whatever you like. As well as examples, it cites behavioural references which you may find useful.

“So how the hell am I gonna calm down now? Well I kept on reading and looking and I found two further interesting conversations. The first, called “You’re Getting a Bonus so Why Aren’t You Motivated?” was started on the Harvard Business Review by Eric Mosley, CEO and co-founder of Globoforce.”

Doug’s white paper is an excellent collection of examples on how poorly structured incentive programs simply drive bad behavior. I suggest giving it a read along with Eric’s Harvard Business Review article. Then come back and tell me: Are cash incentives worthwhile?