skip to navigation
skip to content

Financial Outsourcing Solutions

Professional Group of HR People

FOS Blog

28 Sep

Could Your Sales Goals Be Responsible For Risky Behavior?

Could Your Sales Goals Be Responsible For Risky Behavior?

Research by Duke professor Dan Ariely and his colleagues has shown that pay can substantially enhance a person’s performance – the higher the reward, the more productive.  However, could this theory be contributing to internal fraud?

According to a publication in the Academy of Management Journal, Goal Setting as a Motivator of Unethical Behavior, people with unmet goals were more likely to engage in unethical behavior than people attempting to do their best.  Additionally, it was noted that unethical behavior was strong when people fell just short of reaching the goal.

Recently we have seen fraud related to goal setting in two major industries, banking with Wells Fargo and the auto industry with Volkswagen.  These results cause not only record fines but lost customer loyalty.

Let’s face it, to grow a business there must be goals.  However, setting goals that are not too low and not too high is a challenge.  More importantly, many believe that incentives drive goals.  Therefore, if incentive based selling is offered to front line employees establishing a risk based monitoring approach to identify potential actions an employee may take to fool the system, preventing and detecting actions that may develop and maintaining an action plan in the event of findings is paramount.

Researchers tend towards straying from corrective actions that are harsh such as termination when goals aren’t obtained.   Additionally, managment may consider employing the following:

  • Include employee incentives in the risk management framework of the business.
  • Include goal setting/incentives as part of the risk analysis of product/service development.
  • Set attainable goals, provide proper training and tools to support goal success, and educate employees on the detection and consequences of fraudulent behavior.
  • Use fraud analytic or identity verification software that looks for altered/fake contact information.
  • Use customer surveys – not necessarily to directly acknowledge the product/service but rate features of the product/service, which provides confirmation that the customer is aware and useful feedback on the product.
  • Supervise the incentive program: Employ more than one metric; comparative analysis, monitoring customer feedback/complaints for common themes, etc.
  • Perform independent secondary reviews of product/service setup and account maintenance to review for changes to personal customer information (phone, address, email) coinciding with new account opening. Employing procedures for verification with the customer in these occurrences.
  • Utilize digital consent of an account or service; capture of ID and/or customer signature within the workflow for new and existing customers requesting additional product/services to reflect customer approval.
  • Build in a requirement that requires consent of electronic products has to come from the customer’s desktop or mobile device.
  • Employ a customer notification system that automatically notifies customers of new/change to customer information and account relationships.

Article compiled by Cindy Tice, for additional information please visit our contact us page.

| |