Last Updated Apr 11, 2011 8:11 AM EDT
Here are two examples:
- A Fortune 500 company names a new CEO tasked with growing revenues. He goes on an acquisition binge, revenues go up, he gets his bonus. In time, net income falls dramatically and a number of the acquisitions are later sold or closed.
- I create an incentive for identifying quality problems before a job is produced and shipped. The program is a hit as employees start to scrutinize everything. Shipped errors are almost eliminated, total number of errors goes down a little because employees only focus on what someone else might have done wrong, not on their own work. But productivity nosedives because running presses and production lines isn't nearly as fun as trying to win a daggone t-shirt.
Is it possible to create an incentive program that disproves the Law of Incentives?
Give this a shot:
I have a number of signed, limited edition books (300 copies or less, special binding, etc.) sitting on a shelf: Stephen King, Tom Clancy, Dean Koontz, Kurt Vonnegut, James Michener, Tom Wolfe, Isaac Asimov, O. J. Simpson (don't ask), bunch of others.
Each is fairly valuable, especially to the author's fans, but the books are just sitting there. So I decide to run a little contest and give one away to a BNET reader.
- I could ask a question, let readers respond in the comments, pick the best response or just a random response. Wait -- I want lots of people to read the post. Competition limits an individual's chances to win, so readers are less likely to email or tweet or Facebook-like the article. Hmm... doesn't really work.
- I know: I could ask for responses in the comments section and also let people vote for the best response. Then readers would have an incentive to share the article with their friends. Still, that creates a competitive atmosphere, reducing the likelihood of people sharing the article. Plus, democracy may not work so well in this case: A little Tammany Hall here, a little Mayor Richard J. Daley there, and the best response could lose to the "popular" response.
- Wait: I could stipulate something along the lines of, "No winner unless are at least 40 entries are posted." Ugh. Sounds desperate. Plus, one person could decide to enter forty times, and I really don't want to create a massive list of rules to eliminate the potential of contest-rigging.
- Hey: I could give a book to the reader who brings in the most "outside" readers. Nah. Difficult to measure and just, well, silly.
What would you do? My goal is to have lots of people read the article so the plan must support that goal, but I didn't come up with anything workable. Best response will not only be admired (and envied) by thousands for his or her brilliance, but also gets a signed, limited edition book.
By the way: Feel free to critique other responses. As often happens in a 360-degree evaluation process, criticizing others could make your own performance seem better by comparison.