Ownership Thinking: How to End Entitlement and Create a Culture of Accountability, Purpose, and Profit

Elements of Poorly Designed Incentive Plans

Prior to starting my consulting practice, I noticed that most incentive plans I’d seen did not work, and (as I pointed out in the Introduction) many actually caused damage to the organization. So when I started Ownership Thinking in the mid-nineties, I did some research on what mistakes companies make when designing their incentive plans. I found the following to be common flaws:

■ The plan creates separate fiefdoms.

■ The plan is discretionary.

■ Employees think that (true or not) the goals are unrealistic or unattainable.

■ The payout opportunity is too small—there is no perceived value.

■ The goals of the plan are not communicated, so employees cannot see the connection between the work that they ...