In safety, we typically hope for safe behavior — and reward unsafe behavior. Our formal and informal organizational systems — peer pressure, how we measure worker safety performance (usually we don’t), and how we reward safe behaviors (as compared to productivity or quality) — usually are excellent examples of how we reinforce unsafe behavior.

Safety isn’t alone in having problems with rewards that miss their mark. Many fields suffer unintended consequences through their performance recognition efforts:

  • In medicine, a doctor can pronounce a patient sick when he is actually well. Alternatively, a doctor can label a sick person well. It’s estimated that numerous Americans are afflicted with iatrogenic (physician-caused) illnesses. How? A physician classifies and organizes a patient’s symptoms, gives them a name, and obligingly tells the patient what further symptoms may be expected. This information often acts as self-fulfilling. From that day on, the patient, for all practical purposes, is sick.

    Why are physicians so reluctant to sustain a type 2 error (pronouncing a sick person well) that they will tolerate many type 1 errors (labeling a healthy person sick)?

    Look at the reward system. Punishments for a type 2 error are serious: guilt, embarrassment, and the threat of lawsuit and scandal. But a type 1 error is sometimes seen as sound clinical practice, indicating a healthy approach to medicine.

    Type 1 errors also are likely to generate increased income and a stream of steady customers.

  • In academia, society hopes that university educators will not neglect their teaching responsibilities but rewards them almost entirely for research and publications. Rewards for good teaching usually are limited to outstanding teacher awards, which usually bestow little money and fleeting prestige.

    Rewards for research and publications, on the other hand, and punishments for failure to accomplish these, are commonly administered by universities. Plus, publication-heavy résumés usually will be received at other universities, whereas teaching credentials, harder to document and qualify, are much less transferable. Consequently, it’s rational for university teachers to concentrate on research, even to the detriment of teaching and at the expense of their students.

  • In business, assume that the president of XYZ Corporation is confronted with the following alternatives:

    1) Spend $11 million for anti-pollution equipment to keep from poisoning fish in the river adjacent to the plant; or

    2) Do nothing, in violation of the law, and assume a one in ten chance of being caught, with a resultant $1 million fine plus the necessity of buying the equipment.

    Under this not-unrealistic set of choices, it requires no linear program to determine that XYZ Corporation can maximize its probabilities by flouting the law. Add the fact that XYZ’s president is probably rewarded (by creditors, stockholders, and so on) according to criteria totally unrelated to the number of fish poisoned, and his probable course of action becomes clear.

  • In sports, most coaches disdain to discuss individual accomplishments, preferring to speak to teamwork, proper attitude, and a one-for-all spirit. Usually, however, rewards are distributed according to individual performance. The college basketball player who feeds his teammates instead of shooting will not compile impressive scoring statistics and is less likely to be drafted by the pros. The ballplayer who hits to right field to advance the runners will win neither the batting nor home run titles, and will be offered a smaller raise. No wonder rational players think of themselves first, and the team second.

    Back to the workplace, where we typically have crisp measures of performance for productivity and fuzzy ones for safety. Rewards are high for productivity (getting to keep our job) and low for safe performance (some incentive program we created). Thus we reward productivity to the exclusion of safety.(1)

    (1) Kerr, S., “On the Folly of Reading A, While Hoping for B,” Academy of Management Journal.