Goals And Their Unintended Consequences

I have just finished reading a Harvard Business School Working paper written by a group of Professors on the Unintended Consequences of setting Goals in Organizations and the bad side effects that these have on the behavior, ethical attitudes and psychological and mental make up of those who are subject to achieving the goals - http://hbswk.hbs.edu/item/6114.html

It makes a fascinating reading with examples from the real world like Sears Roebuck and Company, Enron and Ford Motor and Company. And it is a persuasive article on why companies should be careful in insisting upon and rewarding employees based on the achievements of these goals.

I remember when I was the Head of HR of a large US MNC when during a mid year Operations Review the World Wide Head of  Sales and Marketing looked at his goal sheet and realized that 10% of his Management Incentive Payout was linked to Employee Satisfaction Scores. His immediate question was, "How do we ensure that all of us earn this 10% of our Incentive Payout without spending too much energy and effort on our people?"

The examples given by the professors and my own experience tells me that as long as we have Leaders and Managers who believe in manipulating a system no matter what we design and dish out, they will always be misused. It is a good concept to do what the Professors ask us to do - dish these out with lots of caveats - but as they say, "rules are made to be broken" and those who are short on ethical ways of managing and leading will always find a way to beat the system.

But nevertheless a good read !