Roger Martin:

First, PfP is an extremely blunt instrument. Roy’s machine shop illustrates it well. The incentive doesn’t skew behavior a bit: it skews behavior immensely. Almost half of the total observations are in a narrow band around the rerate line. And it isn’t even a management-defined line. It is the guesstimate of workers as to at what point management might take deleterious action. Management isn’t even in control of the impacts of its own system.