A Reminder on the Unseen Consequences of Incentives


Robert Fulghum was on to something.  Maybe not everything can be learned in kindergarten, but a ton can.  I got a reminder about the unintended consequences of incentives tonight from my 3.5 year old.  He’s been lazy about potty training but is eminently bribable– so we set out to bribe him.  We offered him M&Ms to use the potty; one M&M for #1 and two M&Ms for #2.  You know- a simple and scalable sales plan.

Tonight he mastered the incentive structure by successfully breaking his bathroom habit into 5 separate but equal trips to the bathroom across the full spectrum of his capabilities resulting in a massive haul of 9 M&Ms.  We had a deal- you can’t change in mid-stream or your credibility is shot with your team and your staff.  So, we dutifully doled out his commission (again and again).

Even carefully crafted plans can have unforeseen implications and good sales people will push hard to maximize the payoff for themselves.  That’s why quarterly or monthly plans are best; they give both sides a chance to reset and make sure they are achieving the desired goals for both parties.  Even the best laid plans…

[Update: I was reminded by a friend that I have inadvertently added more empirical data to the Freakonomics cannon that addresses this exact experiment]

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