LeapComp - Sales Performance Management Blog

Immanuel Kant, an 18th century German philosopher, developed an interesting theory. His theory is based on the premise that a single moral obligation must be obeyed in all situations if our behavior is to observe the moral law. He also believed that if an action is not done with the motive of duty, then it is without moral value.

Here is an interesting article with an example of Kant’s theory:

Suppose that I, a rich Westerner, ought to make a contribution to charity to relieve poverty in the developing world, and that I am well aware of this fact. Suppose further that I would like to do so, that I care about the welfare of others and so that making such a donation will make me happy. When I make the donation, it is difficult to tell whether I am doing so out of duty (because I recognise that I ought to) or out of inclination (because I want to).

Kant holds that moral action must result from respect for the moral law. If I give money to charity because I want to, but I lack respect for the moral law and so if I didn’t want to make a donation then I wouldn’t, then in making the donation I am not acting well. My donation is at best benign, and at worst selfish; it is certainly not laudable.

If, on the other, I don’t want to give money to charity, but, because of my strong sense of duty, do so anyway, then this Kant would applaud. I may be mean, selfish, and heartless, but I respect the moral law. In conquering my inclination I have acted well.

Now, the question becomes how do you instill sense of duty? Where does it come from?  In the context of incentive compensation, even more interesting - can incentives help create/instill that sense of duty?

According to this article, that’s a pretty hopeless endeavor.

McLean Parks and Hesford conducted a study using a random sample of students who were paid for solving anagrams according to one of three different compensation plans. The plans consisted of different forms of compensation, but their expected value was identical. The students self-scored their work and in half of the cases signed a statement attesting to the veracity of their reported results.

The study resulted in very interesting findings:

• Participants receiving a ‘flat salary’ for their work were the most honest about reporting their scores.
• Many participants who received a performance based bonus cheated when reporting their results.
• Participants who were penalized based on low performance not only cheated but also stole the nice pens that were to be returned at the end of the study!

So we should ask ourselves Kant’s ideas are still relevant today, and sadly, if moral obligation is an outdated concept. Also, it doesn’t look like Parks and Hesford’s study actually measured performance of each of the compensation plans, but it is clear that penalizing employees is not a good idea, and that controls should be in place to ensure the employees have no way of “gaming” the system.