I recall one of the discussions we had years back was about the law of unintended consequences and how people behave when incentivised to do so and how, if these behaviours are not thoroughly thought through and tested then there are problems.
The Cobra problem in British controlled India was a case in point. These snakes were seen as a problem and a bounty was placed on the head of each snake delivered to the authorities. It was proposed that this would incentivise the population to assist in getting rid of these snakes. What happened was that there were a lot more snakes than the British realised but in fact the bottom lie was that the locals were breeding them so as to make income from the snake bounty. It happens in industry quite often as well as in local and big government too.
When a target is placed on a service a KPI it prioritises that service to deal with the target and perhaps not something else in the system. I complained to my boss many times that every quarter (for we were a US based company) that they'd change the goalposts, they'd tell us to do something different. Go for Revenue, Go for Profit, Go for Cash Flow, go for Sales and so on. You probably get the picture. My complaint was that I'd got my 120 strong staff to concentrate on one thing and it takes a while to turn a ship, communicate the changes, advise the customers and put training in place and 3 months and the next quarter came and I'd have to do it all again but for some other metric. The hideous costs involved in changing these directives came at the cost of productivity and no one really knowing what they were meant to be doing.
There was, I complained, a lot of change for changes sake and then there would be the disappointing quarterly figures to deal with. You know, Revenue is down we need to concentrate on revenue, Oh now profits are down so we need to concentrate on profits and around we went. Linked to these goals were behaviours and targets and everyone wanted to get their bonus and so they did these targeted things. Often the targets were at odds with the outcomes but we incentivised people to achieve these and once they did, we would be obliged to pay them no matter what internal or external damage these had caused.
I was amused to see that it happens today in a strange round about way. The government of the day cannot fathom why despite saying they are going for growth that it isn't happening. The PM states that the measures are working and we are seeing the green shoots of a turn around. Absolutely delusional along with his feckless Deputy and Chancellor. There's no incentive to work any harder because you get taxed more, people aren't stupid and why should they do anything when there is no incentive to better oneself. I looked at the Tax on dividends and Capital Gains and the limits on these have shrunk to limits where you are going to get taxed for having just a few hundred pounds coming in.
It's not worth working extra time for, it's not worth making more money than the Tax thresholds because the system is unfair and fully garnered against you. If you run a business, the corporation tax is up, business rates are up and if your employ someone you are walking into a new minefield of regulation and higher employment taxes. You can't sustain any of it and if you want to change behaviour you must make it worthwhile. People are fed up of their money being wasted, given away and being handled by incompetent ideologues who don't care and cannot see that their actions are causing great anxiety and stress as well as impoverishing the very people they say that they are elected to represent.
At the moment they seem to think that all is well in their world and despite people yelling at them to change course and to wake up and smell the coffee (well it's brown and doesn't smell like any coffee I've tasted) they are happily full steam into the Iceberg of economic ruin. How any of them have kept their jobs I don't know. Time will tell I suppose but they've certainly chosen poorly and made people very wary about spending money and many are concerned for their jobs and welfare.
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