Thursday, September 18, 2008

Rewards between the Lines

The newspapers often carry vivid reminders of the management rule: "That which is rewarded gets done."
  • Measure success by the number of mortgages created and you'll get a lot of questionable loans.
  • Measure success by how much the stock rises and you see an emphasis on short-term efforts to drive up the stock.
  • Measure nondiscrimination by hiring results instead of genuine opportunity and you'll get numbers and discrimination.
  • Stress the bottom line and you'll inadvertently reward "the end justifies the means" reasoning.
  • Reward pre-crisis denial and you'll get crisis.

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