The Challenge of Linking Performance and Incentives

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Any incentive system requires a great deal of conscious thought and “scenario testing” before it is put into place, and should be subject to close review during and at the closing of the measurement period (e.g. fiscal year end). Unintended outcomes must be quickly identified and management must be prepared to go back to the drawing board to correct design errors. My bottom line on this: management will get the results for which it plans and controls.

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