Perverse Incentives

Another item checked off the bucket list. . .I’ve used the word perverse – not just in a blog post, but in a title.  We take victories, small or large, where we can get them.

We’re coming off a week in which North Korea cut hotlines, restarted reactors and made a credible threat that affects all of Japan, half of China and. . .Guam.   Worse yet, Rutgers’ basketball coach got fired for trying to what made Bobby Knight famous.  Actually, his mistake wasn’t an overdone and offensive impersonation.  It was failing to understand the implications of smartphones that take video, coupled with the CNNization of America the world.

Also this week, two cases were reported of incentives gone wrong.  In Atlanta, 35 teachers and school district officials were indicted for changing students’ answers on standardized tests.  The superintendent reportedly received $500,000 in bonuses as a result of the artificially achieved “improvement” in education results.  And DLA Piper, the world’s largest law firm, offered a stunning non-apology for getting caught with its pants down.  It couldn’t pull them up because both of its hands were deep in the pockets of one its clients – a giant overbilling scandal beautifully documented in emails that said things like “churn that bill!”   The client, by the way, engaged DLA to help it with a bankruptcy filing.

One of my earliest posts was about the consequences of measuring schools purely through standardized tests.  After all, it’s not like the English system, where those tests directly affect the future of each student.  Here, they just affect the school.  I have a soft spot for that post, mostly because it contains what I think is my second best joke ever.  If you’re tempted, you can find it here.  My objection wasn’t to the idea of accountability, which I’m all for.  It was that the testing system drives even successful schools to teach to the test, rather than to the student.

I’ve never really contemplated law firm overbilling, but I’m not exactly surprised to read that it’s rampant.  I used to fill out time sheets as a member of a consulting firm.  Mine were sloppy but not unfair, which I think was generally true.   And we charged our clients fixed fees.  We abused them, to be sure, but the abuse occurred more in the work than in the bill.

What I thought about, though, when I read these stories, was research reported by author Daniel Pink in his book Drive, which discusses what really motivates people.  You can skip the book and get the gist in this terrific, short, animated video.  (That long list of adjectives is there to get you to watch the video.  You really should watch it.  No one ever clicks through to the links in these posts, but you should. . .)

According to Pink, in anything beyond purely manual labor, money serves as a motivator only until you have “enough,” which for most Americans is about $75,000 a year.  After that, he says, money actually de-motivates.  People are much more strongly motivated by a purpose larger than themselves, a sense that by doing their work well, they are making the world a better place.

Well Mr. Pink, DLA and the Atlanta Public Schools beg to differ.  Money does appear to motivate.  It motivated 35 teachers in Atlanta to line their pockets rather than build their students’ brains (the tip of an iceberg according to the news reports).  And it clearly motivated a bunch of lawyers to rob a client blind.  Again, both the reporting and logic suggest that this is the tip of another iceberg.  And then there was that Wall Street thing. . .

Perhaps money just motivates wrong people to wrong things?  If only we had a test for purpose.