Library Research Metrics and incentives
Rewarding A While Hoping for B
In 1975 Steven Kerr collected examples of reward systems that pay for one thing while hoping for another, from war and medicine to universities and business. Read it today and it sounds a lot like a sales comp review.
Steven Kerr, 1975 (updated 1995)
What he was looking at
Have you ever paid people for one thing and then wondered why you didn’t get another? Steven Kerr, a management professor, kept seeing that pattern in politics, war, medicine, universities, sports, government and business. These were reward systems that “pay off” for one behavior “even though the rewarder hopes dearly for another,” in the words of his 1975 abstract.
What he found
Are people confused about what gets rewarded? Kerr didn’t think so. They go looking for it:
“most organisms seek information concerning what activities are rewarded, and then seek to do (or at least pretend to do) those things” Kerr, 1995 reprint, p. 7
One of his examples is an insurance company whose rules, as he tells it, ended up paying people for showing up instead of for doing the work well:
“the firm was hoping for performance, while rewarding attendance. What it got, of course, was attendance.” p. 11
Kerr named four reasons organizations end up here:
- A fascination with “objective” criteria, which are easy to count.
- Too much weight on behaviors that are highly visible.
- Hypocrisy, where the stated goal and the real one differ.
- Putting morality or equity ahead of efficiency.
The paper almost didn’t make it. In the 1995 reprint Kerr recalls that it was turned down for presentation at the Eastern Academy of Management, and that it only got into the Academy of Management Journal because the editor “broke a tie between two reviewers.” Twenty years later the Academy reprinted it, with Kerr’s update.
What it means
If what you reward and what you hope for point in different directions, the reward wins. Are the people you’re paying doing something wrong? No, they’re reading the plan correctly.
The fix starts with an honest look at what the plan actually pays for, which isn’t what the slide says it’s for.
Where it shows up in a revenue team
- Pay per appointment and you get appointments. The same goes for units, or any other volume-based KPI you put in the plan.
- “Objective” is code for “easy to count”. Meetings booked, MQLs and logos closed are easy to count. Value is harder, and that’s exactly why it goes unrewarded.
- Read your own comp plan the way a rep would. What’s the fastest way to hit it? If the answer isn’t “bring in the customers we want most,” your plan is rewarding A.