Mini Case: Team Incentives and
Unintended Consequences
Pittiulak looked over the latest accident report and sighed to himself. One of his most
junior workers, a house painter, had slipped off a ladder and broken his arm. Pittiulak
felt terrible for him and his family, and was also worried about his ability to staff
upcoming jobs. The injured worker would be away for weeks, if not months. This was
the third significant accident in four months and it was simply unacceptable. Something
was going very wrong with his painting and renovation work teams. He would need to fix
it before more people got hurt, but how?
Pittiulak owned and managed a small renovation, drywalling, and painting firm in
Yellowknife. He had 12 full-time workers, each with different areas of expertise. Some
were skilled tradespeople (he employed a carpenter, a plumber, and an electrician),
while others were drywall experts, framers, painters, and general labourers. When he
received a new job, Pittiulak would select the employees with the right skills for the job
and then create a self-managed project team. The team would work together until the
project was complete and then move on to the next. Some employees, most notably the
tradespeople, would be on several teams simultaneously since they weren’t necessarily
needed at the job site every day.
Four months ago Pittiulak had noticed that many of the projects were taking longer than
expected. This created scheduling problems as jobs got backlogged. Customers got
upset, in particular those whose renovations involved breaching walls of their home.
Such repairs needed to happen during the brief summer months, and with their harsh
climate there was not a lot of room for error.
Pittiulak decided to create a new team incentive. He would provide each project team
with a target completion date (as usual), but now if they met that deadline the entire
team would get a cash bonus. The bonus depended on the project but ranged from $35
to $85 per person.
The bonus was well received and seemed to accomplish its goals. The percentage of
projects completed on time increased from 68 percent to 83 percent over the four-month
period. Pittiulak could understand why. Last time he had visited a job site, he had
noticed the carpenter and drywall installers hurrying the painters up to make sure the
job got done in time for them all to get a bonus. The painters had looked tired and
harried but they had gotten it done! Unfortunately, they’d had to replace a few tiles
because in their haste they hadn’t moved a drop sheet over and paint had gotten on the
floor. But still, it was done on time.
Initially Pittiulak had been thrilled with the success of his team incentive. He couldn’t
help but notice, however, that in the same four-month period three workers had been
injured. One had fallen off a ladder trying to get a tool that was just out of reach, one
had lost two fingers after failing to install the safety guard on a cutting tool, and the third
had slipped on spilled coffee that nobody had cleaned up, hitting his head and getting a
mild concussion. It was strange, since in the three previous years they had only had one
significant accident.
Pittiulak wondered whether there might be any connection between his incentive
program and their poor safety record. After consideration he realized that he needed to
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