Rewarding A While Hoping for B: The Reward-System Trap Every Sales Leader Falls Into

In 1975, Steven Kerr published a paper whose title is also its entire thesis: organizations suffer from "the folly of rewarding A, while hoping for B" (Kerr, 1975). Half a century later it remains the most useful single idea in management — and nowhere does it bite harder than in sales, where teams are wired directly to their compensation plans.

The key insight: you do not get the behavior you want, or the behavior you ask for. You get the behavior you reward.

The core folly

Kerr's argument is that organizations routinely set up reward systems that pay off for behavior A while management hopes to encourage behavior B — and then express bafflement when B fails to materialize (Kerr, 1975). The problem isn't the people; people are responding rationally to the incentives in front of them. The problem is a reward system pointed at the wrong target.

Why smart organizations keep doing it

If the folly is so obvious, why is it everywhere? Kerr identified structural pressures that push organizations into it (Kerr, 1975):

• Fascination with the objective and measurable. Quantifiable metrics are seductive, so organizations reward what's easy to count over what actually matters.
• Overemphasis on highly visible behaviors. Conspicuous activity gets rewarded; quiet, important work doesn't.
• Emphasis on morality or equity over efficiency. Systems get designed to look fair rather than to produce the desired result.

Each pressure nudges leaders toward rewarding a convenient proxy for the goal instead of the goal itself.

The sales-leadership version

Sales is the purest laboratory for Kerr's folly because the link between reward and behavior is so tight. Pay purely on new bookings while hoping for durable customer relationships, and you'll get aggressive closing and post-sale neglect. Reward activity volume (calls, demos) while hoping for quality pipeline, and you'll get a flood of low-quality activity. Comp on individual quota while hoping for collaborative, team-based selling, and watch reps hoard accounts. In every case the team is behaving rationally — the plan is the problem.

How to design rewards that work

The corrective follows directly from the diagnosis: reward B if you want B.

• Name the real outcome first, then ask whether your metric actually proxies it — or just happens to be measurable.
• Beware the visible-behavior trap. If the reward favors what's conspicuous, expect theater.
• Test for the gap between what you're paying for and what you're hoping for — that gap is your future problem.

Reward design is also a prime source of organizational iatrogenesis: a "fix" to a comp plan can disrupt the whole system.

Where this fits in the SalesEvolution system

Aligning incentives with the behaviors that actually build pipeline and protect customer lifetime value is a leadership design problem, not a spreadsheet exercise. It's central to how we think about AI-assisted sales management and to the leadership judgment built through our business development training and coaching.

Every claim above links to its peer-reviewed source; browse the full research & sources.