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It's Not Just Wells Fargo - How Sales Targets Can Encourage Wrongdoing (bloomberg.com)
The revelation of Wells Fargo employees opening more than two million unauthorized customers accounts to hit the sales target might have come as a shock to many, but they are just the tip of a very old problem the industry has been facing. Bloomberg has an article today in which documents several similar incidents when employees went a little inventive to keep their jobs afloat. Marc Hodak, an adjunct professor of business ethics at NYU's Stern School of Business and managing director of Hodak Value Advisors says, "Companies tend to forget that an incentive to perform is identical to an incentive to cheat." In the early '90s, Sears "switched the compensation system in its auto centers from an hourly wage to a system that had more upside potential based on commissions and sales quotas." In the wake of this program, Sears customers were reported to keep running to the store for cheap brake jobs. The Bausch & Lomb scandal was also similar, with the employees were found manipulating earnings to reach financial goals using a trick called "channel stuffing" (in which someone ships goods and then book them as sales without having actually sold them. There are several similar examples in the story. From the artic;e:"Every large organization in the world has got these land mines of perverse incentives," said Hodak. "It's just a matter of degree to which of these things are allowed to run amok" because of those three factors. Barry Schwartz, an emeritus professor of psychology at Swarthmore College, goes farther: "Incentives poison people's will to do the right thing. It's the worst way to get people to do the things you want to do."
In my personal experience, these boneheaded metrics and goals are the sign of an manager, organization or company seriously lacking in competency and even self-awareness of their intended goals.
And software development, alas, isn't free of managers and companies pushing such boneheaded stupid goals that get the contrary of what they intend to.
My default response to a manager pushing you to pursue a stupid/easily gamed goal is to leave ASAP.
There will be more of this happening, as desperate people make bad decisions in order to keep their jobs.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
you ain't trying, and Patriots are 'trying hard' http://blog.masslive.com/patri...
I've had multiple run-ins with multiple big telecoms. If you are a lawyer specializing in suing slimy companies over "ghost upgrades" and other billing games, the telecoms are prime pickins'
Please, sue the living #!@&* out of em!
Table-ized A.I.
Apt Dilbert cartoon illustrating your point nicely. Any metric that's simple enough for management to come up with is simple enough to be gamed heavily by the workers.
Comment removed based on user account deletion
Isn't stress regarded as a silent killer? It makes people do things way out of context especially if it is protracted, long term, and necessary for survival.
This is common in any environment, including Dilbert. Reward or punish a behavior without any common sense and you get what you ask for. On the other hand, if you do like Nordstrom's did in their five word employee handbook then you just might get what you want: Use good judgement in all situations. Then of course that requires the same of management. The other side is zero tolerance, as in we have zero tolerance for bugs leads to a situation where nothing is ever label as a bug.
Is there a good/simple summary on how that works and why one should move over, which one is best, etc?
As a non-american I found this: http://www.mycreditunion.gov/a... but it doesn't really answer all questions.
I feel like that's a missing link, otherwise most people would be using unions now, no?
I worked a retail job that was all sorts of f'd up (pay wise) fresh out of high school.
It was commission draw, which means you're guaranteed minimum wage, but once your commissions exceed that any time you were performing below was taken out of your earnings to repay it.
E.g assuming a $10/hr minimum wage (easy math):
you worked a sloooooow day for 8 hours and sold only $40 worth of commission; you're paid $80 ($40 commission + $40 draw)
next day was a lot better and you sold $120 worth of commission in 8 hours; you're paid $80 ($120 commission - $40 draw from yesterday).
While in theory this was okay, the problem was that when you were working and the store was closed you effectively were not paid.
Add to that some of the products had negative commissions...
So, the game that was used: on a slow day buy a product for cash that was on incentive (high commission for short time) that was due to be off before 30 days were up.
Wait between two weeks and 30 days for it to clear your paycheck *and* the spiff to go away, return for cash under generic ring number.
Naturally this resulted in arrests for fraud, which resulted in countersuits for unfair pay. All in all a total F* fest.
Old way of straight pay (above min wage) for hours worked and *stores* getting a bonus for good performance worked a lot better.
-nb
whois gawk date unzip strip find touch finger mount join nice man top fsck grep eject more yes exit umount sleep dump
What's a more valuable statistic: How many people managed to pull the network plug before it downloaded.
Have gnu, will travel.
What came as a shock was that it took so long to see such a visible high profile example of this. Of course this would happen when rigorous quotas are introduced and a job is on the line.
Twinstiq, game news
"The more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor."
https://en.wikipedia.org/wiki/...
it has impacts in a great many areas, including the test-based teacher and school evaluations.
"But remember, most lynch mobs aren't this nice." (H.Simpson)
-- Joe
Any organization is a bunch of people trying to keep their jobs. Government employees do it by expanding their departments powers and budgets, justified by sticking their noses into affairs which really should have nothing to do with them. Corporate employees do it by shit like this. Dragging work out, inventing projects they don't need and exploiting evaluation systems is how they do it. Smaller companies won't tolerate it because it because eventually hits their balance sheet and can send them under, but it "Too big to fail" companies like banks have so little competition they can afford the waste. No one will shun Wells Fargo over this. How pathetic is that?
They said "Sign this NDA or McDonalds is hiring". The same as the Sears scandal but much much worse. Too bad Ford cut ties with them over Exploders.
How many of these things are actually incentives and how many are just outright coercion re-labeled incentives?
I tend to think of an incentive as a motivation to get X+N if I do some extra thing. If I don't do the extra thing, I just get X. But if I say "do the extra thing or you're fired", that seems like coercion. I don't get X+N, I don't even get X if I don't do the extra thing, I get fired.
Holding a gun to someone's head and demanding their wallet and then claiming that staying alive is an incentive to hand over your wallet seems like a perversion of the concept of incentives.
I think most of these companies where Wells Fargo style fraud happens aren't actually operating on incentives, they're operating coercively. People will do all kinds of unethical things if they think the outcome from not doing them will be termination and subsequent financial peril. Wells was probably holding a gun to their head and claiming that continued employment was an incentive.
There is probably also a threshold where the incentive on offer is so lucrative that people are willing to risk unethical activity to achieve it, but then again there should be sufficient checks to make the unethical achievement either impossible or with a penalty that outweighs the value of the incentive. Robbing a bank has a potentially lucrative incentive, but it also carries a penalty that makes a haul of low five figures in cash not work the risk of a 20 year prison sentence.
That's crazy -- so if you had an awful day, and sold zero for 8 hours you got $80. The next day you sold $80 worth of commission, your net pay for two days is zero?
In many ways that seems worse than straight commission where you make zero unless you sell something. What you described sounds like a way to basically cut the effective commission rate to half or worse.
My default response to a manager pushing you to pursue a stupid/easily gamed goal is to leave ASAP.
Yeah, by that point it's usually too late. By the time they notice their algorithm is being gamed they've already been rating employees on it for a while, so now they'be got the dishonest employees who happily gamed the system and never cared about the company, the formerly honest ones who started gaming the system to keep their jobs (and now resent the company), and the rest have been laid off or, like you, left for a better job.
Even ditching the rating system won't get the good employees back. Welcome to Dilbertland. Well, for a while at least, before they ditch the whole underperforming department and replace them all with H-1Bs.
How can I believe you when you tell me what I don't want to hear?
I worked for a hardware distributor many years ago. At year end my goal was to reduce the warehouse stock for my brand by £400K. The easiest way to do this was to sell it to a friendly customer, load it into a lorry and send it off round the M25 on Friday evening. Then, on the Monday, we bought it all back and booked it back into the warehouse. Job done. I presume we were effectively double-counting revenue as well. The company new full well what was happening but it looked good on the books. I was told specifically I wasn't allowed to leave the stock in the warehouse and sell it as consignment stock (so it would be in our warehouse but belong to somebody else); I actually had to physically get it shipped out. Apart from that they really didn't care.
From my experience, "most" people don't use them for three reasons:
- Lack of resources (the credit unions). For example, the largest credit union in the U.S., Navy Federal FCU has around $74 million in assets and just South of 6.5 million members/customers. Wells Fargo has $1.9 trillion in assets and 70+ million customers. They are the third largest financial institution in the U.S. by the way. Banks have the resources to bury any kind of serious competition, but it seems that as technology continues to make banking more of a virtual event, a lot of the sticking points bank use to advertise become less true (e.g. physical locations, online technology, etc.)
- Gap in services offered. This seems to be an offshoot of the above. I would say up until the late 90s, a credit union was pretty advanced if it offered debit cards. Now, it seems even your toothbrush has online bill pay capabilities. Most of these bells and whistles are given, and they can be provided to any financial institution easily. It's a matter of the financial institution having resources to develop/purchase what everyone wants.
- Regulation. Banks can open accounts for anyone. Credit unions cannot. The rules/regulations of what makes a credit union a credit union restricts who can join. This isn't because credit unions want to be exclusive. Rather, credit unions have developed through regulations and government rules to be not-for-profit "clubs" essentially who are bound to certain restrictions (Have a define group of people it serves, cannot be publicly traded, privately owned by the members). This is something banks in general are very grateful for.
The first two seem to be less and less of an impediment. The last will take time and effort to change.
The upselling and fraud are due to employee incentives and internal competitions. Anyone can have incentives or competitions, non-profit-making has nothing to do with that. Credit unions are not immune to this.
Credit union users, please stop thinking of credit unions as some type of magic entity. They're groups of people, same as everything else.
Or belonging to a group or class of the population no conveniently located credit union wants to deal with.
"People will always do what they perceive to be in their best interest." Being a sales guy and going through a variety of "comp plans", we all learn really quickly how to maximize our commissions. Oh - if we can sell more shit, great! But the first goal is to maximize commission-able revenue.
More to the point, I've always said: "It's not that you measure metrics that matter - it's what metrics you measure that matter." Case in point: I was meeting with a call center manager pitching a new system and we were swapping war stories and he told me about taking over at another company's call center and was reviewing reports, only to see what seemed a really high number of complaints about reps hanging up on customers in the middle of a call. Interviewing some of the worst-offending reps, they told him the situation. "We get paid based on the number of calls per hour that we take! If some bitty starts yakking about her grandkids, I hang up on them to get in the queue for the next call. That way, I maximize my pay. What would you do?" And there you have it....
no, worse than that. on a 'draw' system that guarantees $80 a day.... if you sold nothing over 8 hours one day and got your $80 anyway, you're "in the hole" for that $80, if you earn $80 in commissions over 8 hours the next day and got another $80, you're still down that $80 from the day before which still needs to come out of your commissions > $80 in a day. if you have too many days without making your quota (i.e. fall too far 'behind') you usually get shitcanned pretty fast in these types of situations.
many real estate agents work under similar principle... they "draw", say, $2500 a month out of future commissions, which gets paid back to the agency out of the agent's cut of commissions on sales before they see any of it themselves.
Historically, credit unions served a specific and narrow part of the population. It could be limited to the employees of a single company. Many people were simply not eligible to join a credit union.
An example of the historically narrow membership criteria is the UNCLE credit union in Livermore, which was founded to serve the employees at Lawrence Livermore National Labs.
Today, almost everyone can find a credit union that will serve them. Credit unions have opened up their membership criteria dramatically.
The real "Libtards" are the Libertarians!
To state that they are not attempting to make a profit is incorrect, it's just that the profit they do make goes to their members (who are considered owners of the credit union) rather than some smaller group of individuals. You could conceivably get the same kind of employee misbehavior if a credit union were to implement that kind of incentive system for its employees, but they're unlikely to since there's no impetus from shareholders to drive up the stock price for the next quarter.
Credit unions are typically organized as a non-profit or treated as such for tax purposes, but to imply that they're against making a profit doesn't make any sense as it would suggest they don't care about how they manage their members money or would just give out a loan to anyone for no interest at all. If my credit union weren't making a profit, it wouldn't be able to pay interest on the money I have on deposit with them.
I've asked lots of cops about ticket quotas - and every one of them says they don't have quotas, but their chief wants them to meet or exceed "performance metrics" similar to other districts.
So yeah - that cop isn't "required" to write you that ticket, but if he wants his promotion - he will.
I made that observation years ago.
If you reward workers for collecting red jellybeans and punish them for getting blue ones, the first thing they'll do is bring in a can of red paint.
The Bausch & Lomb scandal was also similar, with the employees were found manipulating earnings to reach financial goals using a trick called "channel stuffing" (in which someone ships goods and then book them as sales without having actually sold them.
Car companies do this all the time. They sell the cars to themselves and then count them as sales in order to increase their sales numbers. Then they either scrap them, part them, or sell them at a significant rebate as used cars (though with no miles on them beyond a few for transport) because they are no longer new. This also lets them skip out on the full warranty, which is important because the cars sit around in the open air in a lot until they're sold, degrading all the while. A car is not a horse, but it still goes bad just sitting around.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Originally, credit unions had limited charters. These days almost anyone can join any credit union.
In my experience, the economies of scale that are supposed to be coming from the big banks are illusory. Some of the worst penalties and service fees I've seen were from the largest banks. All the money they save on doing business in bulk seems to disappear into the maws of overpriced consultants, questionable investments, and other stuff like super-expensive fad IT systems that often make industry headlines by failing.
I'm not really sure I want "one-stop shopping" for all my financial matters, a la the Wells Fargo "Gr8" initiative. It sounds too much like putting all my eggs in one basket and it's one of the things that made abusive institutions "too big to fail".
For quite some time now the rule I've heard quoted is that if you're a business, get a bank account. For personal finances, you're better off with a credit union. At a minimum, the big banks don't really care about the little people anyway, and if you believe their ad campaigns about how VERY important you are to them, believe ME when I tell you I've got a great deal on a bridge in downtown NYC!
I once worked for a publicly traded company that was in the PBX business, but generally in the "communications" business since they adopted the PBX gear to work as a nurse-call system in hospitals.
To make their quarterly numbers look good, the upper-management had the nasty habit of borrowing from future sales to make THIS quarter's numbers look good. Once a contract was signed, they would ship the equipment even if the equipment wasn't needed until a year or more later, for example, a new hospital is being built but ground-breaking won't happen for another six to nine months at least. The equipment would get shipped, it would get placed in a shipping container on-site and the sale would get put into the books for THIS quarter.
Of course, it may have started small and somewhat innocently. Maybe the first one was scheduled to ship a month later in the next quarter. Putting that sale into THIS quarter would look good for the investors and the stock price would do well. But now three months later with that sale missing from THIS quarter because it was placed in LAST quarter's sales, somebody has to come up with way to fill that gap, short of actually making real sales THIS quarter. So they borrow yet again from a future sale. And so on and so on.
It got to the point that we would get service support calls from the techs installing the equipment in new hospitals and they couldn't get things to work with the current software we were shipping. It turned out they had firmware that was two or three years old and it wasn't compatible with the new software. It cost a lot to get current firmware out into the field. No, things were dial-up modems back then, so you couldn't just "push" the updated firmware over the Internet.
A new CEO eventually came in and when he found out about this little book-keeping scam, he proclaimed with very loud voice and a lot of table pounding "THIS SHIT ENDS NOW!" The company doesn't really exist anymore at this point. Each of the divisions were sold off to other companies.
I'm member of two credit unions and 3 other banks, there are credit unions that are actively in the business of ripping their customers off, as soon as the account ceases it's use, I'll be closing it with that credit union.
I've seen 10 day delays for bank transfers when the account nears it's due date, no notifications of due payments until the day before (which is strictly speaking legal, but the mail takes 3 days to deliver), turning off automatic transfers whenever there is 'late' payment. I get my money back every time I yell at them, but it's a hassle.
When I was younger, I had an account at a coop bank. I got a credit card through them, was promised 0% rate and went traveling, the next month they found me not 'credit worthy' enough and had converted my credit card into a debit card, debiting my account for the $3000 charges I racked up. Instantly closed my account although I now had a 'huge debt' without credit, couldn't get a loan anywhere.
Then I have big bank credit card, the best credit card I've ever had, instant single-time CC numbers, instant online dispute, proactively calling me, holding a transaction when two subsequent payments are geographically too far separated. Even allows me to pay a month in advance so I can later turn it off and 'skip' a month.
Custom electronics and digital signage for your business: www.evcircuits.com
I used to work in retail. The sales goals had both positive and negative reinforcement; [meager] commissions for selling extended warranties, and stiff reprimands for not meeting 'accessory sales' goals. One store in the district custom created their own signs for all of their furniture, marking the prices up by $20 or so, and selling everyone extended warranties with every piece sold, without ever asking the customer. I noticed this while visiting the store, and reported it to my manager.
Guess who got in trouble (Hint: it wasn't them.)
Not directly in sales, but I have a personal anecdote on point about how such bad "targets" destroyed an entire department (and ultimately the company).
Years ago I took a summer job working at a collections department for a small cell phone company (back in the days when there were more independent companies around). Horrible job, but paid better than some other options I had at the time. You had the folks working the 30-day delinquent files, the 60-day delinquents, and then the 90-days and 120-days+ files.
Anyhow, when I first arrived there, they had an bonus incentives for two goals: (1) covering the most accounts, and (2) bringing in the most collections money. What did this system do? Well, it made the 30-day and 60-day delinquent account folks do a sort of "triage" to find the accounts that were most advantageous or easiest to take care of. So, they'd try the easiest and quickest methods to contact each account and then move on as fast as possible.
(The dirty secret was that something like 25% of accounts were set up incorrectly in the first place, usually by haphazard handling during the sales process -- a product of bad incentives in that department too. The collectors avoided these "problem accounts" like the plague.)
After my training was over, I optimized my computer for handling accounts as fast as possible, creating various computer shortcuts that could allow me to handle about 3 times the average number of accounts per day. My boss was so shocked when she saw how I was doing things that she insisted I show her how to implement my shortcuts and tools for everyone else in the department (roughly 30 people, as I recall).
Because I was doing so well, I got put on the 90-day/120-day+ accounts then, since they were supposed to be "harder." I soon found out what made them "harder" -- roughly 75% of them were disasters left over because the 30-day and 60-day people didn't have the time to figure out what was wrong. There were loads of accounts with all sorts of things screwed up... so over half of these weren't just simple cases of people not paying a bill for a few months. They were cases where accounts were shut down incorrectly, cases where account had been incorrectly set up by sales people and weren't billing correctly, cases where customers had phones still active 6 months after they should have been shut off, cases where customers had shifted to a different account (usually by someone in sales) but no one had fixed the old one, cases with VIPs who were basically given unlimited phone usage and never were supposed to receive bills but were flagged wrong in the system, even outright cases of fraud, etc. I even uncovered a complex fraud ring in my few months there, which likely saved the company many times what the other collectors earned in collections.
Anyhow, despite the complexity of cleaning up these "messes" with most accounts, rather than just doing the normal collections job, my numbers for account handling were still pretty good. But I wasn't bringing in a lot of money, because... well, mostly I was cleaning up messes left by the way the incentive system was set up. And let's face it, people whose bills are WAY overdue and likely had their phone service shut down for at least a month were unlikely to pay.
So, even though I had been highly praised by my boss (and even the boss's boss) for all of the great work in optimizing the entire department's computers (not my job description), tracking down fraud and other weird cases that required a bunch of detective work to "correct" the many account errors, my "numbers" didn't look good on the spreadsheets for the higher levels of management.
The last straw came when they instituted a system where we had to "log into our phones" when at our desks, supposedly to prevent people from taking long breaks or something. Well, obviously a lot of folks just didn't even bother to log out then for breaks. But I did, because I was a "good" person who obeyed the rules.
About a week af
It's a tough situation. If you incentivize fixing "problem accounts", then you create the perverse incentive for people to create problems so that they can fix them and earn more.
Any incentive program needs oversight to watch for the most common abuses, which means that it needs to be simple enough to spot, and managed by people smart enough to maintain it.
I manage the incentive program for my department where I work, and I can tell you that it falls into what I feel is the 3-leg stool equation.
1. It has to benefit the customers
2. It has to benefit the employees
3. It has to benefit the company
If you can pull this off, you're good, but a BIG PART of this is human understanding.
Example. Last month one of my teams spent the entire month dealing with a messy bunch of clients from an acquisition. As such, their productivity (by the raw numbers) were way below the minimum thresholds for participation in the incentive program.
Their supervisor brought this concern to me. I'm not about to punish one of the best teams I have because they busted their asses to provide good service to clients we just gained from another company we purchased (and want to retain!!!).
So I said fine, those techs get an average of the 3 previous months' performance for bonus payouts for the month of August.
The techs were very happy with this (and continue to not shy away from work just because it's "difficult" or may detract from the raw numbers everyone is bonused on), their supervisor is the hero because he looked out for his troops, and I'm the understanding manager because I understand that no numbers for any incentive program can exist in a vacuum.
Productivity continues so the company benefits, the customers benefited and will continue to do so, and the employees benefited -- but only because human understanding made for reasonable exceptions.
If you don't run an incentive program with these kinds of approaches, you deserve the mess you inevitably get.
And the circle of life continues to spin, occasionally wobbling on its axis thanks to the weighty presence of dumb.
They need constant growth.
I saw the same behavior with my company's upper management. They'd do anything to make the quarterly report look "good" so they could pocket their bonuses at the expense of the company's health.
"You get the behavior you measure".
It's not a unique practice. It's commonplace.
Holding plebes responsible at Wells Fargo is like putting lipstick on a pig. These directives come from top down.
after 20-30 years of stagnant wages it's built into our economy. It's not how lucrative the incentive is. It's whether the spiff gives you enough to make rent, car payment _and_ eat this week. It's whether you can hang on to your meager standard of living (such as it is)...
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This reminds me of the "will that be on your [store] mastercard" crap. Pushing customers like that is just BS
It's not as crazy as it sounds. The basic idea is that you're paid $4/hr as a base rate plus commissions, but minimum wage is $8/hr. So if you worked 80 hours over the past two weeks, you can't be paid less than $640.
You could think of that like your first $320 of commissions don't count, but your employer will think of it like they're giving you your first $320 of commission whether you earned it or not.
dom
A non-profit is just that, non-profit. It means their revenues and expenses at the end of the year balance, hence no net profit.
That doesn't mean they can't make a profit, it's just that profit is spent before the fiscal year ends so it's back to zero. Now, some non-profits are arranged so they make very little profit on what they do - thus giving lower prices to everyone, and the profit is then used to pay salaries and all that. But it doesn't have to be that - it can be making ridiculous amounts of profit and they then spend it on something else.
For an example of this, look at the College Board - they are the makers of many of the academic tests out there, and they charge an arm and a leg (ask any student who has to take the SATs). But any other standardized test is probably administered by them as well. They rake in the money, both in the tests, the study guides they sell, and many other things. So much so they spend their profit on luxury hotels and other things - as a non-profit they have to spend it all to even it out.
Of course, most credit unions are less evil and spread any profits as dividends to the members.
Anything Union needs to be burned to the ground. Resurrected, then tortured, in front of their families and then placed in stasis watching traffic jams for the rest of eternity.
Wow, that's exactly what has happened to me some 10 years ago, only I was the developer that had to deal with this mess!
The whole housing market bubble that had crashed the economy has been created this way - mortgage providers were incentivized to hand out mortgages to anyone (no income no assets) then funnel them to securities providers making them someone else's problem.
Brilliant comment.
Shows some endemic problems with corporate culture. Namely that most wage slaves are doing it for their paychecks and nothing else matters. The question should be - why? If there is no incentive for a worker to improve his company then he won't. Workers who are made to partially own or at least to feel like they partially own their company tend to be more invested.
At my workplace, we had savings goals set by management.
All it achieved was things known to be costly being added into the product, so they could be removed later and claimed as a cost-saving to meet those goals.
All the saving goals managed to do was make us spend more, as we'd pay the inflated price for a while..
What an (expensive) waste of time!
Good thing our entire tax system is pretty much entirely based on 'incentives' to get people to do the "right thing".
Sleep your way to a whiter smile...date a dentist!
I would switch to a credit union in a heartbeat, IF I could find one that was open on Saturday. There are plenty of credit unions in my area, but not one of them is open on Saturday.
I worked for a consulting firm that tracked your billability or percent of time you could bill a customer vs doing other admin overhead. The stupid thing was if you did non billable work like writing proposals on top of billing you 40 hours a week, it still messed up you billability targets. Once i got a message about my billability being too low after working over 40 hours billable and doing proposal work then your manager would need to explain it to his higher up manager. They later fixed the policy, but i couldnt understand how such a stupid policy was in place, especially since winning work through proposals was there bread and butter.
In economics this phenomena in general is called perverce incentive. That is, someone tries to put in place an incentive to reward for productive behaviour but in the end a "workaround" is found to comply with the incentive criteria by doing something very counter-productive.
Doing coding? One organization decided to start giving bonuses to coders by lines of code written. Suddenly all this extra whitespace appears out of nowhere and when looking into your favourite VCS you'll see same lines having a lot of small cosmetic changes changes all over. What an increase in productivity!
Want to make company more profitable? Why don't you give the new CEO incentives that are bound to short-term profits. No way (s)he will do cuts that rise profits momentarily but neglecting long-term viability of the company and by the time the damage is seen in the company profits the CEO is elsewhere continuing on solid path of "success". Pump and dump schemes are another related story (where the company holders have the incentives as well).
Have extra employees in organization and want to do some lay-offs to increase profits? You are likely to keep employees who are best at securing their positions with schemes such as refusing to share relevant information to keep yourself irreplaceable rather than those that are actually valuable to the company. Just imagine what your organization looks like after couple of rounds of these (unfortunately, I've witnessed some horrors like this - the most incompentent "developer" I've seen came from organization that did this, besides lacking relevant coding skills was also very unhelpful to collaborate with neighbor organization that our success was bound with. But he surely made sure it looked like it was the other ones fault.).
I'd say in general the problem is neglecting abuse schemes of incentives and quite often underestimation of intelligence is involved as well. Arrogance to say. Think about mushroom management of R&D organization. No way that employees (with higher average IQ than management) will be able to predict how management is trying to piss on them and no way they will find a strategic behaviour scheme to defend themselves from that which might be not that productive for the whole company...
I'd probably could think of couple of other examples as well but let's talk about law enforcement instead! Arrest quotas, anyone?
For best results, start a sentence and hit the "hang up" button right during the middle of a word.
That way, it doesn't piss off the biddy and you still get to end the call.
Good customer service!
total agreement. I remember, years ago, talking to the head of the I.T. department (I'm a sysadmin). A critical piece of software was on an old release, which was soon to be unsupported. His basic reply was: "I don't care. We don't have problems with the software now, so support isn't important. The new version costs more, which would up my budget numbers, which would decrease my bonus. You just keep the current stuff running without problems!"
Has everyone forgotten so quickly the 2008 recession was in large part due to this kind of sales activity?
People were getting bonuses for the numbers of mortgages they sold that could be repackaged into securities, making money on both ends.
They wanted more more more, until the economy simply collapsed from the weight of all the subprime and toxic mortgages.
The guy who said the election was rigged won the presidency with the second-most votes.
Anytime you tie compensation into performance metrics, you will ALWAYS have a cheating problem. It starts with the one, or a few then spreads as others see someone else making big pay and bonuses because of their ( bogus ) performance numbers.
Pretty soon everyone is doing it because, if you're not, management wants to know why you're such a slacker in comparison to everyone else.
See any professional sport, standardized testing, entrance exams, etc. The list of exames are nearly endless.
no qa cycle.... as usual...
found the corporate shill.
you like having weekends off?
you like that your kids can go to school instead of working 12 hours a day?
you like the 8 hour workday, giving you 8 hours to yourself and 8 for sleep?
you like workplace safety, an environment that wont kill you?
you like having any rights at all as an employee?
then THANK A UNION
and I can make this list bigger if I need to.
Labor Day is the most or second important holiday observance we have in a year, and most people don't even understand its importance anymore.
they don't understand that thousands of workers died for the right to be treated with dignity, the right to a life that was more than just scrounging away for someone else in return for a pittance barely above slave labor. there were hundreds of massacres of striking workers. labor organizers were summarily executed by the authorities controlled by corporate bosses. it took decades to win public support for these essential public rights. but the result is the possibility to live the life you live now.
The guy who said the election was rigged won the presidency with the second-most votes.
Come on! The company who's total abandonment of truth in accounting brought up Sarbanes-Oxley!
It's kind of like the idea of timing traffic signals to 30 mph: it also means they're timed for 70 mph. You have to be careful how you structure incentives and be aware of the assumptions you are making. If I was in your position I would just never sell anything and collect my $80. To me that's far better than having to "pay" the store back for my draw in the event that I work harder and sell stuff.
If you make the mistake of trying California Teachers Credit Union you would be forgiven for going back to Wells Fargo or Bank of America. I have USAA, but back in the day I actually tried to use CTCU and service was worse than the DMV. The employees actually acted irritated that I was bothering them when I called to ask about setting up an account.
The yerkes Dodson law as well as how people perform might be a big part of what drives this kind of thing. People perform best when there is uncertainty in when they will receive a reward, plus Thai need a certain arousal state to do something well.
If your performance and profit is all that we are going to measure keeping one's job by, then this thing will continue to happen for ever. We need to recognize that profits should not be everything
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Hah. My father was fired from the Colorado State Police for not fulfilling the ticket quota they weren't legal supposed to have. Had enough evidence to get it overturned in court, too. Mind you, he quit right after he got reinstated, but don't ever believe the cops are above doing things they're not allowed to.
Have you emailed them and told them this? Also, why do you need them open on Saturday? The ones I use I can do just about everything online.
Velociraptor = Distiraptor / Timeraptor
... every one of them says they don't have quotas, ...
I asked a cousin, deputy sheriff, about quotas, he said there are none. He then said there are days where he gets one call after another, no time to stop and give someone a ticket (unless it is a gross violation) because he has to respond to calls. Then there are slow days with not much happening, supervisor will look at activity logs of long periods of no calls and might question lack of patrol activity. Cousin said it's real easy to rack up lots of tickets (lots of drivers committing violations).
mfwright@batnet.com
I had to file for bankruptcy in 2011. My attorney advised me to switch my accounts away from Wells Fargo Bank as they would freeze my accounts once they get the bankruptcy notification. Just so happened that a credit union opened next door to the branch I went to as WFB started this product upselling campaign. Switching to a credit union was the best financial move I ever made.
Why are only workers to blame here?
Companies themselves are driven by sales and profit targets, nearly every one. And nearly every one is potentially pushing the envelope of acceptance in making their numbers. This is why for-profit education and healthcare, tobacco, fast food, sugar, oil, GMOs, and nearly everything else driven by profit is suspect: because people will do what it takes to sell potentially bad stuff to you in the name of making their numbers.
It also happens to be illegal in California.
Primarily because when you're working for the company in a non sales role (i.e. closing books and count for the night) you're incapable of earning commission, and thus are drawing. It screws the employee.
If the person is *only* sales and you have someone else doing the ring up/booking.etc. then I believe this is legal, but that is because the salesperson's only job is selling, so they are never "forced" to draw.
I was one of the highest performers in the store I worked in, and my store was the highest performing store (adjusted for staff and inventory level) in the district. Why? Because I merchandised the store such that *anything* with a low commission was effectively unseen by customers (but if they asked for it we could sell it) and I outright hid the items with zero or negative commission. "Sorry, we're out of stock on that."
-nb
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I used to work for a company where the managers got bonuses based on P and L numbers so what they would essentially do is halfway through the quarter fire half the employees and then force exempt employees to work unpaid overtime in order to get bonuses and deny overtime to non-exempt employees and hope they didn't get caught when the employee misses it on their paycheck. So at the end of the day the manager got a raise and a bonus and all of the employees were SOL, and apparently - it isn't unheard of to do that, it is considered 'good business'
I worked at a credit union in NC. They have 20% less overhead because they don't pay taxes.
So everyone works 20% less hard because of an unfair exemption they have. Rewarding their laziness.
Just a part of the crony capitalism narrative as far as I can tell.
Well, no, that would be Henry Ford who gave us weekends, 8-hour workdays, and 40-hour work weeks. He had horrible turnover and training costs were through the roof, so he doubled wages and implemented an 8-hour, 5-day work week because his research (and still holds true) that after 40 hours of working, we're much less productive.
His workers could now afford to purchase the cars they were building, and they had time on the weekends to go out and enjoy driving them. And his turnover rate fell to less than 10% annually. So it wasn't labor unions. It was profit motive.
shhh
By default Quickbooks can track sales by rep but doesn't track credits by rep.
"buy em both and return the one you don't use...."
Incentivization is often an evil, whereby those at the top levels use those beneath them to exploit the underlings - who are the customers and citizenry. Beware of the middlemen.
This bullshit "metrics" and "targets" mentality which has it's roots in game theory doesn't just apply to sales. Healthcare (at least in Canada) is often measured based on metrics like wait times. This results in hospitals trying various schemes to make sure a doctor "sees someone" very soon after they arrive in the ER. Thus they can say the patient experienced a very short wait time. Instead, they should make decisions based on patient satisfaction and outcomes. Education also suffers. Standardized tests, GPAs and other nonsense metrics replace the desire to provide a useful education to students. Instead, it's about getting them to fill in the right bubbles on the test. Policing. While most police departments will swear up and down that they have no quotas, the fact is that they still exist. There are no other "metrics" that they can go by to measure policing effectiveness. Even when they try to use numbers like YoY violent crime numbers -- the police still manipulate that by reclassifying violent crimes as misdemeanors. Sadly, as a programmer -- I have to say that we really need to find a way to stop measuring these things with numbers. The numbers may seem to get better, but that which they measure just continue to suffer.
A non-profit is just that, non-profit. It means their revenues and expenses at the end of the year balance, hence no net profit.
That doesn't mean they can't make a profit, it's just that profit is spent before the fiscal year ends so it's back to zero. Now, some non-profits are arranged so they make very little profit on what they do - thus giving lower prices to everyone, and the profit is then used to pay salaries and all that. But it doesn't have to be that - it can be making ridiculous amounts of profit and they then spend it on something else.
For an example of this, look at the College Board - they are the makers of many of the academic tests out there, and they charge an arm and a leg (ask any student who has to take the SATs). But any other standardized test is probably administered by them as well. They rake in the money, both in the tests, the study guides they sell, and many other things. So much so they spend their profit on luxury hotels and other things - as a non-profit they have to spend it all to even it out.
Of course, most credit unions are less evil and spread any profits as dividends to the members.
But when most people say non-profit, they actually just mean tax-exempt. The organization may make a net profit, but due to its nature is not taxed.
Stop! Dremel time!
And software development, alas, isn't free of managers and companies pushing such boneheaded stupid goals that get the contrary of what they intend to.
http://dilbert.com/strip/1995-...
Accidentally Moderated you Flamebait, my apologies.
Posting to clear, please ignore.
APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?