“That is not what I expected.”

This post is about incentives, and more accurately, unintended incentives.  Have you ever set a plan in motion and the results were 180 degrees out from what you expected?  I bet if you looked hard enough, your plans include unintended incentives.

Plans with incentives involve people and we all know that humans are completely rational.  These “rational” humans can nearly always find the unintended incentive.

Need an example?

(Note: “S” asked that the next blog be about his brother since he didn’t like all the attention from the last one.)

“J” is my other teenage son.  He is at the age that he can shop for himself, and mom and dad see an opportunity to teach him about money matters.  Money matters like giving, saving and spending.  

He has job responsibilities around the house and, for his efforts, he receives weekly compensation.  We also decided to provide him with a small monthly clothing budget.  With this additional monthly income, he would now be responsible for buying his own clothing.  Sounds like a logical approach with obvious incentives.  Incentives like looking for sales, getting only what you need, and learning to budget monthly.

Recently “J” has developed the learned behavior of leaving his wallet at home.  What?  

Me - “How are you going to pay for your stuff?”

“J” -   “You can pay for it, and I will pay you back when we get home.” (which rarely happens)

or

Me - “Don’t forget your wallet”

“J” - “It’s ok.  There won’t be anything I want to buy.”  (repeat conversation above)

We had actually provided an incentive for him to “forget” his wallet.  The incentive was more money in his bank account.

Home is not the only place to watch out for unintended incentives.  How about an example from the workplace?

A couple of weeks ago at work, I helped conduct a large scale data collection effort in an attempt to track the outputs from our organization.  We built a spreadsheet to capture the information and we ended up with over 30 elements of data per line of entry.  We pushed out the instructions and the form with a short turn around time (as always).  The organization responded and the data started to flow in.  Lots of data.  Way more than expected.  We thought this was great support from across the entire organization.  What more can you ask for?  

Next step was data analysis.  We quickly realized that we unintentionally baked incentives into our data collection.  The category titles and selection choices provided enough indicators to drive the responders to a “preferred” choice.  

The results indicated that not one of our outputs was generated from a self-initiated project.  This is highly unlikely for my type of organization.  I suspect this is the same for others organizations.

Was this gaming the system?  Was the problem related to self reporting?  Maybe.  I think it had more to do with unintended incentives.  

It really doesn’t matter if you are dealing with a teenage boy or some other “rational” human, look for the possibility of unintended incentives in all the plans you set in motion.

Proverbs 16:3  “Commit to the LORD whatever you do, and he will establish your plans.”

- What is your plan? -