3. Wells Fargo - performance management madness!

Number 3 in the Three Minute Outcomes video series. The Wells Fargo’s Bank’s performance management system included bonuses for staff who got customers to open new accounts (called ‘upselling’). They didn’t take into account the outcomes theory principle that the more an indicator is used for incentivization the less accurate it is likely to be. It took one and a half million false accounts to be opened, the bank having to fire 5,000 staff and face angry regulators before they got to understand the principle. Resources below.  



Resources:


The relevant outcomes theory principle. 

The National Public Radio story on this.

The CNN story on it. 



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