Our choices and actions send messages to others about our values. Consider a manager who communicates to her employees in a call center that “customer care is the most important thing for our company.”
(A)
In many cases, performance is multidimensional, but compensation is only given to one aspect of performance, typically the one that is easiest to measure. Simple “one-aspect” compensation sends a clear message to the workers: concentrate on what we’re paying you for and ignore everything else.
(B)
That’s a signal to others regarding values. Now, imagine that the manager sets the incentives such that employees are paid by the number of calls they answer. This incentive sends a very different signal about what the manager is looking for: it’s about being fast, which comes at the expense of quality of care.
(C)
Such mixed signals leave the employees confused about the manager’s values and expectations. This mixed signals problem is channeled into a simple question: what should be rewarded?
