Harry Cassin
Publisher and Editor
Andy Spalding
Senior Editor
Jessica Tillipman
Senior Editor
Bill Steinman
Senior Editor
Richard L. Cassin
Editor at Large
Elizabeth K. Spahn
Editor Emeritus
Cody Worthington
Contributing Editor
Julie DiMauro
Contributing Editor
Thomas Fox
Contributing Editor
Marc Alain Bohn
Contributing Editor
Bill Waite
Contributing Editor
Russell A. Stamets
Contributing Editor
Richard Bistrong
Contributing Editor
Eric Carlson
Contributing Editor
Searching for perverse incentives that can become compliance land mines means messing with people’s pay.
You are not just looking to eliminate potentially dangerous design elements, but also identifying changes to variable plans that preserve as much of the positive power of your incentives as possible, while addressing the risks.… Continue Reading
Consider a salesperson who has reached his bonus cap three months before fiscal year-end. Any achievement after that is not only unrewarded, but is actually penalized in the sense of creating higher future performance expectations and targets.… Continue Reading
The root causes of perverse incentives often hide (in plain sight) in the most common variable compensation structures, which include payout floors, thresholds, payout caps, and stretch goals.
The seeds of the Epipen scandal, for example, were planted when Mylan’s management became eligible for millions of dollars of a one-time bonus payout if they hit 90 percent of their cumulative earnings target.… Continue Reading
In the prior post, we talked about reasonable goal setting that can turn into perverse incentives, leading to compliance and reputational disasters like Wells Fargo. In this post, we look at whether companies can contain the excesses of their incentive programs with controls.… Continue Reading
When Wells Fargo imposed a target of eight accounts per customer on its branches, the bank created an aspirational goal. Cross-selling is a proven method of encouraging growth and maximizing upside, with little incremental expense.… Continue Reading
