Rewarding A While Hoping for B: The Folly of Misaligned Incentives

Companies often trip themselves up by saying one thing and rewarding another, frequently without noticing the contradiction. Leaders talk earnestly about the future. They say they want long-term growth, teamwork, and fresh ideas from their people (Kerr, 1975). In meetings and mission statements they praise exactly the behavior that would carry the company toward lasting success, and they truly believe they are encouraging it.

The key insight: companies get the behavior they pay for, not the behavior they wish for — and no amount of fine talk overcomes the steady pull of the pay system.

The reward systems tell a different story. Despite all the lofty talk, companies keep paying people only for short-term earnings, easy-to-count individual output, and playing it safe (Kerr, 1975). The numbers that decide raises, bonuses, and promotions measure none of the long-term, team-minded, creative behavior leaders claim to want. What gets praised in speeches and what gets paid in practice point in opposite directions.

The result follows with grim predictability, because people respond to what is rewarded, not to what is preached. Workers sensibly shape their behavior around the measures that actually decide their pay, not around the mission their leaders talk about (Kerr, 1975). An employee told to think long-term but paid for this quarter's numbers will, reasonably, chase this quarter's numbers. The company then acts surprised and disappointed at the very behavior its own reward system was set up to produce.

This problem is self-inflicted, which means only the company that created it can cure it. Because the gap lies between the stated goals and the actual rewards, the fix is for leaders to take a hard look at their pay and review systems and rebuild them so that the behavior they reward is the behavior they actually want (Kerr, 1975). This is hard work, since long-term and team contributions are tough to measure, but the difficulty of measuring something is no excuse for rewarding its opposite. Lining things up takes deliberate redesign, not good intentions.

The lasting lesson is as simple as it is widely ignored. If you want a certain behavior, reward that behavior, because no amount of fine talk will overcome the steady pull of the pay system. Companies get the behavior they pay for, not the behavior they wish for. Closing the gap between what leaders hope for and what they reward is not a minor paperwork chore. It is the very heart of turning strategy into reality.

Where this fits in the SalesEvolution system

Nowhere is this folly more visible than in sales compensation (we go deeper in rewarding A while hoping for B). Pay on new bookings while hoping for customer retention, on activity volume while hoping for pipeline quality, on individual quota while hoping for teamwork — and you'll reliably get the first of each pair. It connects directly to the incentives-versus-innovation problem: the reward must match the behavior you actually want. Designing comp that drives the right behavior is a core leadership task in our AI-assisted sales management work and our training.

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