By May 31, 2010 0 Comments Read More →

Rewards and Penalties can lead to Bad Behavior

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Sign Asking for High Score on Survey

I've talked about it before - how KPI's and other measurements with rewards and penalties attached can lead to behavior you didn't expect.

While this example isn't from Facilities or Property Management, it does illustrate the issue quite nicely and has relevance to anyone who is measuring customer or service satisfaction in their property or facilities.I didn't think that bad behavior would be as blatant as this or would completely invalidate otherwise valuable customer satisfaction information the company could have used to analyze their performance and make decisions that improve results.

Prompting people to give a high rating in a customer satisfaction survey regardless of the actual service is counter productive to success. Consider how measures you use may have the same negative consequences.

I'd guess at Kmart, a high score on the Customer Service survey means some kind of reward for the employees, which is why this sign was at a cash. Clearly, it's not just the cashiers who thought this up. The store manager is in on it too. The wording suggests two things. First, it actually implies you need to rate their customer service as a 9 or 10 for a chance to win a $2,500 Gift Card. Second, it says the store doesn't really care what you think of the service - they just want you to give them a high mark.

I'm sure Kmart senior management didn't think this would be the kind of behavior they'd get. Are there things you measure that drive similar bad behavior?

It's why every time you implement Key Performance Indicators (KPI's), Service Level Agreements (SLA) and other forms of measurements, you need to consider what the reward or penalty will drive people to do, whether they are your staff or the staff of your subcontractor or outsourced service provider.

Ask yourself what the result may be and either counteract the tendency or re-design your KPI's and the direct impact they have on the people and companies who are being measured.

KPI's, Service Levels and other performance measurements should be a valuable source of information you can act on and manage behavior and results,  not a carrot and stick to force behavior. The carrot and stick is a passive, low effort way to manage and ultimately will fail to deliver the results you want. A proactive approach to managing behavior (and ultimately results) will serve you better in the long run.

For more articled on performance management, visit my website, www.strategicadvisor.ca


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