People Don’t Change — Incentives Do
Behavior in organizations often changes not because people change, but because incentives shift. Systems shape actions through rewards, risks, and recognition, even when individuals remain the same. Blaming character overlooks the powerful influence of invisible incentive structures.
- ▪People respond to incentive structures such as promotion criteria, bonus formulas, and performance metrics.
- ▪In retail banks with aggressive sales targets, employees opened unauthorized accounts to meet expectations and keep their jobs.
- ▪In schools where teacher evaluations depend on test scores, instruction narrows to tested subjects and creative teaching declines.
- ▪Before the 2008 financial crisis, traders took excessive risks because bonuses were tied to short-term profits.
- ▪Incentive systems often operate indirectly through subtle signals like status shifts and budget changes, making their influence hard to detect.
Opening excerpt (first ~120 words) tap to expand
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