The Cobra Effect
Here's something you should think about whenever someone mentions performance targets, bonuses or commission payments. It’s something called the Cobra Effect, and it's an interesting story.
Back in colonial India, the city of Delhi had a snake problem.
It was infested with cobras, so the government thought they'd involve the people in solving the problem. They thought they'd give them an incentive to do it, so they started paying a bounty on dead snakes.
Surely that was the answer. They'd give people an incentive, they’d then work together and they’d solve the problem. What could go wrong? A lot in this case, as people started breeding snakes to get payments.
As soon as the government realised what was going on though, the payments stopped.
The people breeding the snakes obviously didn't have a social conscience, so they just released them. After all of this, the city of Delhi had an even bigger cobra problem.
Think about what happens when we give people incentives, particularly financial incentives. Think about what could happen to you if you don’t look at the big picture.
At work, you could be tempted to cross a line. At home, you could be influenced to do something that turns out pretty bad. Something that often involves handing over money. We need to be careful, and remember the Cobra Effect.