211: Rewards/Incentives Issue
Definition/Typical Issues
Were workers rewarded for improper performance? Were incentives inconsistent with the goals of the company and facility? Did the reward system encourage workers to take shortcuts or waste resources?
Examples
Example 1
- Performance of customer service representatives was measured by the number of calls they handled each day. As a result, they tried to diagnose the problem as quickly as possible and provide a recommended solution. Because the representatives were trying to diagnose the problem quickly, they often misdiagnosed the problem. About 40% of the phone calls handled by the center were repeat calls from customers whose problems were misdiagnosed the first time.
Example 2
- One of the metrics for the maintenance organization was the percentage of utilization for a certain lathe. This was measured by the percentage of time the lathe was operating. As a result, the operators turned on the lathe in the morning when they came in and let it run until they went home. They never used the lathe for work because it would decrease the amount of time the machine ran.
Typical Recommendations
- Develop rewards that are consistent with company goals and objectives.
- Ensure that metrics and other measurements for performance are consistent with facility goals and objectives.
- Ensure that rewards systems do not encourage undesirable behaviors.
- Hold workers accountable for their performance.
- Reward workers for good performance.
Cross-References
| Version 10 Element(s) | |
|---|---|
| Node ID | Node Name |
| 65 | Rewards/Incentives LTA |
| Maritime Element(s) | |
|---|---|
| Node ID | Node Name |
| 248 | Rewards/Incentives Issue |