Saturday, June 15, 2013

Let's assume, for the sake of argument, that the allegations about B of A are true.

Here's a story about the allegations.  If those allegations are true, and I have no idea if they are, then what we have here is a classic case of creating incentives that trigger exactly the behavior that the bank got from its employees.  An example from the news story:
“We were regularly drilled that it was our job to maximize fees for the bank by fostering and extending delay of the HAMP modification process by any means we could,” Gordon said. Managers instructed staff to “delay modifications by telling homeowners who called in that their documents were ‘under review,’ when in fact, there had been no review,” she said. 
Any employee is likely to work to do more of what the employer rewards and less of what the employer ignores or punishes.  Want your employees to serve customers better?  Then the incentives can't include "how many customers can you serve in an hour?," or you'll get cursory responses to tens of customers an hour.  Want your employees to process documents quickly?  Make sure that "accurately" is also in the incentive equation.

Everyone responds to incentives.  Companies need to pay attention to what their incentives really ask their employees to do.

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