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Competition, Bonuses, Wasted Resources and Cheating

Yesterday I was at TopConf Linz, and one of our speakers, Louise Elliott, wanted that everyone in the room gets a card with a red and a green side. She needed us to have those cards because she did some experiments where we could vote by showing either the red or the green side. But to me, what happened before the actual experiments was even more interesting...

Louise gave me and another person a deck of cards, and we should distribute them to the people in the room. I was to distribute them to the right side, the other person to the left side. And the side where everyone would have their cards first would win.

We started to distribute the cards. I started quite slowly, and I don't know if my colleague / competitor started faster. But then Louise said: "You do know that you are in a competition here, right?"

I realized that I had much more cards than I needed, so I started to hand out large decks of cards to every row. Like, 15-20 cards for a row with 8-10 people. After the last row, I shouted "done!", we counted, and everybody had a card, so we were declared winner. The other side finished at just about the same time...

We were the winners, but I wasted just about half of my "resources" (cards) by giving each row more than they needed. Also, we maybe cheated a little: I'm not sure if everyone already had a card when I shouted "done" - I guess not. But I was confident that everyone could show a card when asked to, which would, of course, be a little later than my shouting "done". So yes, we won. But only by a very little margin, and we wasted a lot of resources and cheated a little...

This reminded me of the bonus schemes I saw implemented at some of my customers. They created a system of metrics, reward and competition in which cheating and/or wasting company resources was a possibility to win. And if something is possible, somebody will do it sooner or later.

Now, you could say, we obviously hat the wrong metric. Or not enough different metrics. If Louise would have better nailed down the winning conditions, my cheat would not have been possible... In one of my next blog posts, I want to write about why this won't work either: Stay tuned! Subscribe to my Newsletter so you'll never miss one of my articles...

Update: Part two is here: Bonuses and Wasted Resources: The Right Set of KPIs. But you can, of course, still subscribe to my newsletter ;)

My name is David Tanzer and I have been working as an independent software consultant since 2006. I help my clients to develop software right and to develop the right software by providing training, coaching and consultanting for teams and individuals.

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