Reggie looked at me sideways. “Do you mean that this whole complicated issue regarding incentive compensation, that we hired expensive consultants to help us with, may be a guided misadventure?”
“You tell me,” I replied. “What type of environment do you create when you tell people that you are holding back part of their compensation because you don’t trust them to do their best?”
“You just said it, it creates an environment of distrust,” Reggie declared.
“And what kind of behavior does this distrust create?”
“Whooo! It’s all over the board. Some people work really hard, appear very dedicated and some people try to figure out how to manipulate the system to their advantage. I don’t know. Come to think of it, the people who seem committed, who perform the best, are the kind of people who would work very diligently even without the bonus.”
“And would you describe those people as stupid for working so hard without having a bonus as a carrot?”
Reggie shook his head. “No. I would have to say that is just who those people are. The words are -dependable-integrity-earnest.”
“So, what do you think this incentive plan is accomplishing?”