Firing a Guy for Doing His Job

The customer service fiasco at AOL has
received massive press attention, and the outcry is well-deserved. You can even see video of the abused
customer, Vincent Ferrari, on You Tube. AOL has
apologized and fired the abusive customer service representative, a guy named
John. Take a look at the story by Randall
Stros in today’s New York Times, it seems that poor John was fired for
doing his job, and in fact, AOL still refuses to apologize for making it so
difficult for customers to quit their service. Worse yet, John (a “retention specialist”) was apparently provided
financial incentives for persuading customers NOT to quit AOL. In other words, they fired him for doing what he was told to do. The root cause of John’s
awful actions is the incentive system, which is driven by AOL’s greed to put up
good numbers even if they frustrate customers and waste their time (Stros
estimates that the 3 million AOL customers who dropped their service in the
last year have wasted a total of over 250 years).  As my colleague Jeff Pfeffer and I show in Hard
Facts, the problem with financial incentives is that they often work too
well, causing people to focus on doing just the few things they get paid for,
even when it damages customers and the organization’s reputation. Ironically, there is evidence that having
smaller and more vague financial incentives can enhance organizational
performance because people focus on “the right thing to do” instead of “what
will put as much money in my pocket right now.”