| It works everywhere in the private sector. Having a base salary plus incentive pay for meeting objective goals is commonplace. Companies wouldn't do that if it didn't work. In my own company, Zortech, the staff was paid a base rate plus a cut of the gross sales for the month. > it would almost certainly result in teachers focusing all of their efforts on the best students and none of it on those who are struggling Actually the reverse would happen. The best students would automatically attain grade level performance, and likely exceed it. They'll already get the bonus for those students without any effort. The gold is in getting the underachievers to achieve. |
Sales is a great example.
In companies where bonuses are based on, say, revenue booked per quarter, salesmen play all kinds of games to jack that number up as far as it can go, regardless of the collateral damage. Piss off the engineers by promising the impossible? Who cares, I closed that McScully deal. Sold a customer a product that won't actually solve their problem? Cha-ching, bonus time!
Now, when you figure out how to tie sales bonuses to positive outcomes... that's a different story. Then the incentives match the actual goals.
But that's really hard to do. Outcomes can take years to measure, if they are measurable at all.
Hence why you end up with all kinds of really screwed-up corporate behavior. It's not because people or corporations are evil -- they just take the shortest path to the win, even if that's not really the road you wanted them on.