Incentive Compensation: Don’t Go Overboard

August 19, 2020

Bonuses: They’re not just for senior executives anymore. Many companies now offer performance-based incentives to rank-and-file personnel, too. But serious problems can occur when these incentives are too strong, poorly designed or insufficiently monitored.

For example, in one case, a large national bank set aggressive sales goals that came with financial rewards. To meet their goals, bank employees opened new credit card accounts in customers’ names without their knowledge or consent. The resulting fallout was a major embarrassment for the employer.

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