Richard Denny – Thoughts on sales and marketing

Bonuses paid to bankers have attracted hysterical abuse not only by an aggrieved public but also by journalistic comments.

Now let’s get real. . Big bonuses paid to directors and departmental heads should be forgone. The chiefs are at fault not the Indians as they are paid to carry out orders and deliver. They are incentivised to perform and over-perform and they of course should be rewarded. When I educate directors and managers on the subject of incentives and performance enhancement I start by laying the foundation “you will get more of whatever you reward and recognise” so be careful in what you do recognise and reward. If you reward or recognise long hours of work you will get people doing just that but not necessarily enhanced performance.

A few years ago I was asked to sort out a problem with a major parcel carrier. They were experiencing a high level of customer complaint of non-delivery with too many parcels returned to the depots. A bright young executive put in an incentive programme for the drivers. If the parcels were not returned to the depot – the drivers earned more money. You can guess what happened – a good incentive but rewarding the wrong result

This is exactly what has happened to the chiefs in the banking fraternity. The right incentive but for the wrong result. The vast majority of the Indians who have performed well and who have had little or no impact on the mess that the banks are now in should be getting their bonuses.

This entry was posted on Thursday, February 26th, 2009 at 10:36 am and is filed under Richard Rants. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.