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The Slippery Slope of Goals and Incentives: Incentive to perform is often indistinguishable from incentive to cheat.

June 14, 2016 12:20 PM | Theresa Boyce (Administrator)

by Tim Askew at Inc.


CREDIT: Getty Images

Management savant Peter Drucker supposedly said, "If you can't measure it, you can't manage it."  The only problem with this frequently cited quote is that Drucker never said it.  In fact, he actually said things quite the opposite.  Like "Culture eats strategy for breakfast."

Last week I attended a fascinating all-day seminar at NYU's Stern School of Business titled "Ethics by Design:  How to Use Nudges, Norms and Laws to Improve Business Ethics," sponsored by Ethical Systems.org, the Behavioral Science & Policy Association and CEO Trust.  There were over 150 attendees, mostly top-drawer academics with a sprinkling of executives and entrepreneurs.  I found it thought-provoking, useful, and even startling.

The day covered many topics, but the general trope was cautionary concerning our ubiquitous business emphasis on quantification, measurement, and goals.  While acknowledging that goals can encourage persistence and performance, almost all seminar participants emphasized the caveat that rigid goals will have deleterious effects on corporate culture and long-term corporate health.  While historic studies point to the positive impact of goals on increasing business performance, more recent research, including by many of the attendees and presenters, pointed to the the fact that overemphasis  on goals encourages unethical behavior.  The symptoms of this include increased moral disengagement, decreased individual self-regulation, and hazardous risk-taking.

for complete article: http://www.inc.com/tim-askew/the-slippery-slope-of-goals-and-incentives.html

Included in the article are quotes by Lisa Ordonez, Vice Dean at the Eller College of Management at the University of Arizona and by Marc Hodak, Managing Director of Hodak Value Advisors and professor at the NYU Stern School.