On the Folly of Rewarding A, While Hoping for BQuality of the Reports
...rformance. The five percent is only given for the outstanding category, the four or three just to the average and two and one for the underperformers. Since the difference is so small and the possibility to obtain a five is so difficult most of the employees just prefer to be average. Additionally, the reporters receive a monthly bonus. Each reporter is tracked taking into consideration quality and quantities measures. This rewarding system is in fact leading the reporters to only perform until the point where they can get the more money with the less effort. At the end it is discouraging an outstanding performance. (See Exhibit A) ABC analysis: Antecedents Consequences P I C N F U The Problem Performance: Reports are done careless Incentives Reward Mostly Volume Reporters meet objectives with less effort. P I C Solution: • Redesign of the monthly bonus plan rewarding the best quality of the reports within the time frames: (Exhibit B) o Changes in bonus weight measures as follows: production would drop from 45% to 20%; inclusion of 3 balance sheets to be increase from 15% to 30%, last financial statement increase from 20% to 30%, trade references will stay in the same 20% . o Minimal quality goals will be raised: inclusion of 3 balance sheets would be increased from 5% to 30%, last financial statement to be increase from 8% to 30%, trade references from 5% to 20%. • Director will personally thank the team and to provide lunch for the group. . • Acknowledge and thank the group both in meetings and by email. • Underperformers should be identified and assisted with instruction; if results are still not delivered the person will receive a negative call from Director. Exhibit A Monthly Bonus Plan Result...