157: Employee Incentives and Unintended Consequences

Today we discuss employee incentives and how they can actually work against our long-term goals.

Employee incentives gone rogue!

It’s very common for companies to incentivize goals like sales quotas, new customer acquisition, and more. Many companies tend to look at ways to regularly innovate new ways to implement this aspect of incentives – be it through buying bulk gift cards, or through non-monetary recognition and rewards such as an extra day of leave! It’s great to reward employees for reaching these goals, but the way we do it can create huge problems.

Take Wells Fargo, who is facing multiple lawsuits due to the creation of millions of fake accounts resulting from years of aggressive acquisition quotas. While this is an extreme case, the problems created by your incentive program can go unnoticed until there’s a huge problem.

The biggest problems we hear of stem from focusing on metrics rather than experience outcomes. For instance, your report shows a significantly reduced call time, but it doesn’t tell you how many calls were hastily and poorly executed. It doesn’t say how many customer service issues were ignored to keep those calls short, or how many customers were hung up on! Say these examples were from an accounting company, using a version of an accounting services marketing funnel, could highlight the problem areas within customer acquisition, as well as parts of the funnel that are being executed efficiently, allowing the company to focus on problem areas and improve.

Will your employees turn against each other to reach your new sales goal? Will your loyal customers suffer due to an emphasis on acquisition? From making undeliverable promises to creating deeply embedded culture issues, your long-term goals and reputation could be at stake.

Listen in to learn how the best companies think ahead by aligning employee incentives with experience outcomes.

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