Nation of Beancounters

The culture of firms: goal setting, positive attitudes and R&D

Posted in Culture of Firms by Navin Kumar on March 10, 2012

From The Atlantic, no longer available for some reason (gee, I wonder why?):

one former company of mine decided that they would implement a new salary incentive plan. Here’s how it worked: your base salary was cut 20%. Ah, but you could earn your way back to what you used to make by meeting the goals on your yearly Research Goals Statement. And, as the folks from HR kept pointing out to everyone, if you exceeded those goals, why, you could make even more! You may be able to picture how this went over – your favorite image from the list of vividly vulgar similes will be fine. Everyone in R&D was appalled, because we knew just what those goal statements were worth. Most years, they were dead letters by April, because. . .well, because it was research. Things had changed. Things always changed.

I remember trying to get this across to representatives of the managerial group pushing this new system. We kept hearing about how better goal alignment, “coaching for success”, and a good dose of positive attitude would make this whole thing a success, and I couldn’t take it any more. “Look”, I said, “I can’t ‘just put down what I’m going to be working on for the year’, because I don’t know. I can’t ‘just focus on the projects that are most likely to succeed’, because I don’t know what those are. I don’t care what it says on the org chart. I’m in research, and my real bosses are a bunch of cells in a dish and a bunch of rats in cages. They determine what I’m going to work on next. And they can’t be coached for success, and they don’t care how much team spirit I have, because they don’t listen to me.”

This didn’t go over well. My audience from HR seemed to think that I was either lying, trying to be funny, misinformed, or (most likely) just not enough of a team player. But the argument illustrated two different ways of looking at the world. The new salary plan was from the power-of-positive-thinking side, the “You can do anything if you want it enough” side. (The non-falsifiable flip side is, naturally, that if you didn’t make it, you must not have wanted it enough). But one of the things I actually like about science is that it doesn’t care what I think. The physical world is what it is. If you ask it the right questions, it’ll give you answers. And if you ask it the same question in the same way, it will always give you the same answer back, and that will work for anyone in the world who does it the same way. If the system looks like it’s not doing that, there’s some other variable you haven’t considered. The physical universe is always ready to play. It never fails, but it also never fails to be utterly indifferent to human concerns.

There was no meeting of the minds that time. I went back to the lab and got more assay data, and smiled/cursed/slapped my forehead as appropriate. The HR team soldiered on and applied this new plan to the folks in the clinical research department first, as a test case. Whereupon several of their best people left, within the first couple of months, citing this idiotic pay system as their reason for walking out the door. At that point, just before this wonderful new system was to come to us in the drug discovery labs, it was frantically abandoned. This was made known by a sudden and nearly incoherent memo to the remaining clinicians which read as if the CEO had been standing behind its author with an upraised ax handle. No one, though, was foolish enough to thing that it would be the last brainstorm we’d see.

There are many stories here: HR is dumb is the most obvious but one could simply interpret this as “incentives are hard to get right”.

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