What executives could learn from classroom study

Opinion: performance incentives are needless and unfair

“Anyone with the gumption to reach the boardroom has a grotesquely inflated drive to succeed far more powerful than a factory full of Gucci watches.” Photograph: Chris Ratcliffe/Bloomberg

“Anyone with the gumption to reach the boardroom has a grotesquely inflated drive to succeed far more powerful than a factory full of Gucci watches.” Photograph: Chris Ratcliffe/Bloomberg

Mon, Jun 2, 2014, 01:00

Last week in the duty-free shop at Stansted airport, I was idly trying on sunglasses and wondering why so many had lenses the size of saucers when I overheard a conversation at the till behind me.

“He got 35 out of 35 in both English and mathematics,” a woman was saying to the shop assistant. “He knows that if he gains full marks, he gets a reward. It’s getting expensive – he’s so bright, he does it every year.”

“Wow, that’s a big reward,” the assistant said as she took the woman’s payment for a Gucci watch. The boy – who can’t have been more than 10 – gazed inscrutably at the watch, which looked enormous on his scrawny arm.

I watched with a curdling mixture of envy and disapproval. To get full marks in an exam is an alien experience in my household. Could the watch have caused it? I like to think it could not. To bribe children to perform in exams is not only vaguely distasteful, it is also, surely, pointless. Even if they aren’t motivated by the joy of the work itself, one hopes that they will try to do well either to keep up with Jones junior or because they realise it is in their interests to do so.

Using bribes

Not only needless, bribes are also unfair – to reward someone just because the two Shakespeare sonnets they happened to revise came up is not right.

And if you have several children, some of whom do well effortlessly while the others slog away to rather less effect, why should Gucci watches rain down only on the first group?

Yet the story of the boy, the watch and the beaming mother has made me have my doubts. My own motivational system is evidently not working terribly well: as I write this, my son is failing to settle down to revise for his maths GCSE despite a good deal of cajoling, raging and gnashing of teeth from me. It is a bit late in the day to change my system as he is my last child and his exams are – hallelujah – almost over. But the question is of broader interest, not just in schools but in offices.

Performance-related pay is no different to paying bribes for exam results: we bribe executives to maximise shareholder value in the same way that we pay children for A*s. And so if the system doesn’t work with kids, what chance of it working with more complex, ageing executives?

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