waiting with a well researched article on the controversial pairing of goal setting and bonuses today published magazine managerSeminare. "A station wagon with dynamite," the headline of the author Andrea Meyer Bittel.
She tells of the Kobra effect from the period of British colonial rule in India. At that time was a bonus for each dead snake awarded with the result that the Indians bred snakes to collect premiums. As the premium was deleted but less successful, the Indians from the still ungetöteten snakes and caused a huge snake infestation.
I have added their contribution to other examples from the recent past, which was the effect of variable compensation entirely in the wrong direction. But I've made my position clear:
variable remuneration is a highly effective and potent management tool. Improper design or reckless use of the instrument, the blame falls short. When a person intentionally to another with a knife or negligent violation, sentenced to finally not the knife.
variable remuneration is to be understood as a management tool. Both the designer and the user is responsible for ensuring that this instrument brings advantages for all concerned: for management, shareholders, officers and employees. [...]
the full article "goal setting and variable remuneration" read