Whether dealing with monkeys, rats, or human beings, it is hardly controversial to state that most organisms seek information concerning what activities are rewarded, and then seek to do (or at least pretend to do) those wings, often to the virtual exclusion of activities not rewarded. The extent to which this occurs of course will depend on the perceived attractiveness of the rediscovered, but neither operant nor expectancy theorists would quarrel with the essence of this notion.
Nevertheless, numerous examples exist of reward systems that are fouled up in that behaviors which are rewarded are those which the rewarded is trying to discourage, while the behavior he desires is not being rewarded at all. In an effort to understand and explain this phenomenon, this paper presents examples from society, from organizations in general, and from profit making rims in particular.
Data from a manufacturingcompany and information from an insurance firm are examined to demonstrate the consequences of such reward systems for the organizations involved, and possible reasons why such reward systems continue to exist are considered. SOCIETAL EXAMPLES Poetics Official goals are “purposelessly and general and do not indicate the host of decisions that must be made among alternativeness of achieving official goals and the priority of multiple goals (8, p. 66). They Steven Kerr (Ph. D. -City university of New York) is Associate Professor of
Organizational Behavior, College of Administrative Science, The Ohio State University, Columbus, Ohio. 769 This content downloaded from 129. 210. 6. 137 on Fri., 16 Jan 2015 PM All use subject to ASTOR Terms and Conditions 770 Academy of Nongovernmental December usually may be relied on to offend absolutely no one, and in this sense can be considered high acceptance, low quality goals. An example might be “build better schools. ” Operative goals are higher in quality but lower in acceptance, since they specify where the money will come from, what alternativeness will be ignored, etc.
The American citizenry supposedly wants its candidates for public office to set forth operative goals, making their proposed programs “perfectly clear,” specifying sources and uses of funds, etc. However, since operative goals are lower in acceptance, and since aspirants to public office need acceptance (from at least 50. 1 percent of the people), most politicians prefer to speak only of official goals, at least until after the election. They of course would agree to speak at the operative level if “punished”for not doing so. The electorate could do this by refusing to support candidates who do not speak t the operative level.
Instead, however, the American voter typically punishes (withholds support from) candidates who Fran sly discuss where the money will come from, rewards politicians who speak only of official goals, but hopes that candidates (despite the reward system) will discuss the issues operatively. It is academic whether it was moral for Nixon, for example, to refuse to discuss his 1968 “secret plan” to end the Vietnam war, his 1 972 operative goals concerning the lifting of price controls, the reshuffling of his cabinet, etc. The point is that the reward system made such refusal rational.
It seems worth mentioning that no manuscript can adequately define what is “moral”and what is not. However, examination of costs and benefits, combined with knowledge of what motivates a particular individual, Often will suffice to determine what for him is “rational. “‘ If the reward system is so designed that it is irrational be moral, this does not necessarily mean that immortality’s result But is this not asking for trouble? War If some oversimplification may be permitted, let it be assumed that the primary’ goal of the organization (Pentagon, Luftwaffe, or whatever) is to win.
Let it be assumed further that the primary goal of most individuals on the front lines is to get home alive. Then there appears to be an important conflict in goals-personally rational behavior by those at the bottom will endanger goal attainment by those at the top. But not necessarily! It depends on how the reward system is set up. The Vietnam war was indeed a study of disobedience and rebellion, with terms such as “frigging”(killing one’s own commanding officer) and “search and evade” becoming part of the military vocabulary.
The difference in subordinates’ acceptance of authority between World War II and Vietnam is ported to be considerable, and veterans of the Second World War often 1 In Simony’s (10, up. 76-77) terms, a decision is “spectrographically” if it maximizes an individual’s valued outcomes so far as his knowledge permits. A decision is “personally rational”if it is oriented toward the individualism’s. This content downloaded from 129. 210. 6. 137 on Fri., 16 Jan 2015 14:07:43 PM 1 975 Volume 18, Number 4 771 have been quoted as being outraged at the mutinous actions of many American soldiers in Vietnam.
Consider, however, some critical differences in the reward system in use during the two conflicts. What did the GIG in World War II want? To go home. And when did he get to go home? When the war was won! If he disobeyed the orders to clean out the trenches and take the hills, the war would not be won and he would not go home. Furthermore, what were his chances of attaining his goal (getting home alive) if he obeyed the orders compared to his chances if he did not? What is being suggested is that the rational soldier in World War II, whether patriotic or not, probably found it expedient to obey.
Consider the reward system in use in Vietnam. What did the man at the bottom want? To go home. And when did he get to go home? When his tour of duty was over! This was the case whether or not the war was won. Furthermore, concerning the relative chance Of getting home alive by obeying orders compared to the chance if they were disobeyed, it is worth noting that a mutineer in Vietnam was far more likely to be assigned rest and rehabilitation (on the assumption that fatigue was the cause) than he was to suffer any negative consequence.
In his description of the “zone of indifference,” Bernard stated that “a person can and will accept a communication as authoritatively when .. . At the mime of his decision, he believes it to be compatible with his personal interests as a whole” (1, p. 165). In light of the reward system used in Vietnam, would it not have been personally irrational for some orders to have been obeyed? Was not the military implementing a system which rewarded disobedience, while hoping that soldiers (despite the reward system) would obey orders?
Medicine Theoretically, a physician can make either of two types of error, and intuitively one seems as bad as the other. A doctor can pronounce a patient sick when he is actually well, thus causing him needless anxiety and expense, ordainment of enjoyable foods and activities, and even physical danger by subjecting him to needless medication and surgery. Alternately, a doctor can label a sick person well, and thus avoid treating what may be a serious, even fatal ailment. It might be natural to conclude that physicians seek to minimize both types of error. Such a conclusion would be wrong. At is estimated that numerous Americans are presently afflictive iatrogenic (physician caused) illnesses (9). This occurs when the doctor is approached someone complaining of a few stray symptoms. The doctor classifies and organizes these symptoms, gives them a name, and obligingly tells the patient what further symptoms may be 2 In one study (4) of 14,867 films for signs of tuberculosis, 1 , 21 6 positive readings turned out to be clinically negative; only 24 negative readings proved clinically active, a ratio of 50 to 1. This content downloaded from 129. 210. 6. 137 on Fri., Jan 2015 PM 772 Academy of Management renal expected.
This information often acts as a self-fulfilling prophecy, with the result that from that day on the patient for all practical purposes is sick. Why does this happen? Why are physicians so reluctant to sustain a type error 2 pronouncing a sick person well) that they will tolerate many type 1 errors? Again, a look at the reward system is needed. The punishments for a type 2 error are real: guilt, embarrassment,and the threat of lawsuit and scandal. On the other hand, a type 1 error (labeling a well person sick) “is sometimes seen as sound clinical practice, indicating a healthy conservative approach to medicine” (9, p. 9). Type 1 errors also are likely to generate increased income and a stream of steady customers who, being well in a limited physiological sense, will not embarrassed doctor by dying abruptly. Fellow physicians and he general public therefore are really rewarding type 1 errors and at the same time hoping fervently that doctors will try not to make them. GENERAL ARGUMENTATIVENESS’S Rehabilitationcentersand Orphanages In terms of the prime beneficiary classification (2, p. 42) organizations such as these are supposed to exist for the “public-in-contact,” that is, clients.
The orphanage therefore theoretically is interested in placing as many children as possible in good homes. However, often orphanages surround themselves with so many rules concerning adoption that it is nearly impossible to pry a child out of the place. Orphanages may deny adoption unless the applicants are a married couple, both of the same religion as the child, without history of emotional or vocational instability, with a specified minimum income and a private room for the child, etc.
If the primary’ goal is to place children in good homes, then the rules ought to constitute means toward that goal. Goal displacement results when these “means become ends-in-themselves that displace the original goals” (2, p. 229). To some extent these rules are required by law. But the influence of the reward system on the orphanage’s management should not be ignored. Consider, for example, that the: 1. Number of children enrolled often is the most important determinant of the size of the allocated budget. 2. Number Of children under the director’s care also will affect the size Of his staff. . Total organizational size will determine largely the director’s prestige at the annual conventions, in the community, etc. Therefore, to the extent that staff size, total budget, and personal prestige are valued by the orphanage’s executive personnel, it becomes rational for them to make it difficulties children to be adopted. After all, who wants to be the director of the smallest orphanage in the state? 1975 773 If the reward system errs in the opposite direction, paying off only for placements, extensive goal displacement again is likely to result.
A common example of vocational rehabilitation many states, for example, consists of placing someone in a job for which he has little interest and few qualifications, for two months or so, and then “rehabilitating”him again in another position. Such behavior is quite consistent with the prevailing reattempted, which pays off for the number of individuals placed in any position for 60 days or more. Rehabilitation counselors also confess to omitting with one another to place relatively skilled clients, sometimes ignoring persons with few skills who would be harder to place.
Extensively disabled clients find that counselors often prefer to work with those whose disabilities are less severe. 3 universities Society hopes that teachers will not neglect their teaching responsibilities but rewarded almost entirely for research and publications. This is most true at the large and prestigious universities. Cliches such as “good research and good teaching go together” notwithstanding, professors often find that they must choose between teaching and research oriented activities when allocating their time.
Rewards for good teaching usually are limited to outstanding teacher awards, which are given to only a small percentage of good teachers and which usually bestow little money and fleeting prestige. Punishments for poor teaching also are rare. Rewards for research and publications, on the other hand, and punishments for failure to accomplish these, are commonly administered by universities at which teachers are employed. Furthermore, publication oriented resumes usually will be well received at other universities, whereas teaching credentials, harder to comment and quantify, are much less transferable.
Consequently it is rational for university teachers to concentrate on research, even if to the detriment of teaching and at the expense of their students. By the same token, it is rational for students to act based upon the goal displacement which has occurred within universities concerning what they are rewarded for. If it is assumed that a primary goal of a university is to transference’s from teacher to student, then grades become identifiable as a means toward that goal, serving as motivational, control, and feedback devices to expedite the knowledge transfer.
Instead, however, the grades themselves have become much more important for entrance to graduate school, successful employment, tuition refunds, parental respect, etc. , than the knowledge or lack of knowledge they are supposed to signify. It therefore should come as no surprise that information has surfaced in recent years concerning fraternity files for examinations, term paper writing services, organized cheating at the service academies, and the like. Such 3 Personal interviewsconductedduring 1972-1973. 74 activities constitute a personally rational response to a reward system which says off for grandfather’s knowledge. BUSINESS RELATED EXAMPLES Ecology Assume that the president Of EX. Corporation is confronted with the following alternatives: 1 . Spend $11 million for antipollution equipment to keep from poisoning fish in the river adjacent to the plant; or 2. Do nothing, in violation of the law, and assume a one in ten chance of being caught, with a resultant $1 million fine plus the necessity of buying the equipment. Ender this not unrealistic set of choices it requires no linear program to determine that EX. Corporation can maximize its probabilities by flouting the away. Add the fact that Ex.’s president is probably being rewarded (by creditors, stockholders, and other salient parts of his task environment) according to characteristically unrelated the number fish poisoned, and his probable course of action becomes clear. Evaluation of Training It is axiomatic that those who care about a firm ‘swell-being should insist that the organization get fair value for its expenditures.
Yet it is commonly known that firms seldom bother to evaluate a new GRID, MOB, job enrichment program, or whatever, to see if the company is getting its money’s worth. Why? Certainly it is not because people have not pointed out that this situation exists; numerous predetermination’s articles are written each year to just this point. The individuals (whether in personnel, nonproliferation, or wherever) who normally would be responsible for conducting such evaluations are the same ones often charged with introducing the change effort in the first place.
Having convinced top management to spend the money, they usually are quite animated afterwards in collecting rigorous vignettes and anecdotes about how successful the program was. The last thing many desire is a aroma, systematic, and revealing evaluation. Although members of top management may actually hope for such systematic evaluation, their reward systems continue to reward ignorance in this area. And if the personnel departmentabdicatesits responsibility,who is to step into the breach? The change agent himself? Hardly!
He is likely to be too busy collecting anecdotal “evidence” of his own, for use with his next client. Miscellaneous Many additional examples could be cited of systems which in fact are radiotherapists other than those supposedly desired by the rewarded. A few of these are described briefly below. This content downloaded from 129. 210. 6. 137 on Fri., Jan 2015 14107:43 PM 775 Most coaches disdain to discuss individual accomplishments, preferring to speak of teamwork, proper attitude, and a one-for-all spirit. Usually, however, rewards are distributed according to individual performance.
The college basketball player who feeds his teammates instead of shooting will not compile impressive scoring statistics and is less likely to be drafted by the pros. The ballplayer who hits to right field to advance the runners will win neither the batting nor home run titles, and will be offered smaller raises. It therefore is rational for players to think Of themselves first, and the team second. In business organizations where rewards are dispensed for unit performance or for individual goals achieved, without regard for overall effectiveness, similar attitudes often are observed.
Under most Management by Objectives (MOB) systems, goals in areas where quantification is difficult often go unspecified. The organization therefore often is in a position where it hopes for employee effort in the areas of team building, internationalization, creativity, etc. , but it formally rewarding of these. In cases where remissions and raises are formally tied to MOB, the system itself contains a paradox in that it “asks employees to set challenging risky goals, only to face smaller paychecks and possibly damaged careers if these goals are not accomplished” (5, p. 40).
It is hoped that administrator’s pay attention to long run costs and opportunities and will institute programs which will bear fruit later on. However, many organizational reward systems pay off for short run sales and earnings only. Under such circumstances it is personally rational for officials to sacrifice long term growth and profit (by selling off equipment and repertory, or by stifling research and development) for short term advantages. This probably is most pertinent in the public sector, with the result that many public officials are unwilling to implement programs which will not show benefits by election time.
As a final, clear-cut example of a fouled-up reward system, consider the cost- plus contract or its next of kin, the allocation of next year’s budget as a direct function of this year’s expenditures. It probably is conceivable that those who award such budgets and contracts really hope for economy and prudence in spending. It is obvious, however, that adopting the proverb “to him who spends shall more be given,” rewards not economy, but spending itself.