Page 208 - The Power to Change Anything

Design Rewards and Demand Accountability 197

And it’s not just token awards that can go amiss. You could
fill volumes with stories of how carefully considered incentive
schemes have run amok. One hospital, for example, found that
anesthesiologists who were paid based on personal production
were less willing to jump in and help one another when some-
one else’s patient was reacting badly.
Consider a couple of the former Soviet Union’s attempts to
dabble in incentive schemes. In the energy sector, rubles were
literally being thrown away in the search for oil reserves because
Soviet workers received bonuses according to the number of feet
they drilled. It turns out that it’s far easier to drill many shallow
holes than to drill a few deeper ones—which is exactly what
happened. Instead of following the geological advisories to drill
deep to find existing reserves, workers were happy merely pok-
ing the surface over and over—turning up very little oil. After
all, it’s what they were rewarded for doing. Similarly, in a Soviet
nail factory, leaders who paid bonuses based on the total weight
of nails produced did see weight production shoot up. Un-
fortunately, it climbed as workers produced exactly the same
number of nails as they had before—the nails were just bigger.
Not pleased with the increase in the size of the nails, leaders
began offering rewards based on the number of nails produced.
Once again, the incentive worked and production shot up, but
the factory produced only very small nails.
One woman we worked with—a manager at an inter-
nationally renowned company—decided that her employees
weren’t as innovative as they needed to be, so she instituted a
simple suggestion program. What could be more innocent? To
encourage creativity, she asked each work group to meet for at
least a half hour per week to brainstorm new work methods,
solutions to long-standing problems, and possible new prod-
ucts. To put teeth into the new program, she put together a
committee that reviewed submissions and then awarded cash
prizes to employees who came up with ideas that were judged
as “real moneymakers.”