CHAPTER
6
UNITED TECHNOLOGIES
The Dangers of Fixed Incentives
“People do what you pay them to do” is a guiding principle of management. How much and toward what end an organization incentivizes its employees has a profound impact on how the business performs. The history of United Technologies (UTC) is a story of amazing success and failure with an incentive structure built around a simple goal, “Grow earnings 10 percent per year,” at the center of the company’s rise and fall.
UTC is one of the great industrial mega-conglomerates. For much of the 1900s, the company was known as United Aircraft and focused on the aviation ...
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