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Jordan Morris
MADM 701 30317
01/28/2018
Dr. Knotts
Pay Incentive Philosophies and Evil Empires

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“Wells Fargo Says 3.5 Million Accounts Involved in Scandal”, reads the title of an article, by Ken Sweet, journalist of USnews.com. Motivating employees monetarily, when done in moderation, can be a profitable organizational benefit that leads to talented people and effective business processes. However, there must be a balance of pay techniques and incentives that contribute to work-life balance for a company to meet the needs of the employee all while protecting themselves from unethical vulnerability. Employees have Needs to say deploying a pay technique must be handle. The type incentives a company provides can be a slippery slope. In many instances when companies employ an attitude that money is everyone’ primary motivator, the business model fails and the company becomes susceptible to fraud. The most recent and notable exemplification of poorly executed pay incentive plan was Wells Fargo’s controversial employee sales goal program. 
In an attempt to motivate and incentivize employees to meet rigorous sales goals, Wells Fargo rolled out an individual incentive plan. On September 8th, 2016 Wells Fargo, the Los Angeles City Attorneys Office and Consumers Financial Protection Bureau revealed this effort generate to sales has lead to a disturbing result. According to Paul Blake, Journalist from abcnews.com, in his article on November 3rd 2016, “the Office of the Comptroller of the Currency (OCC) fined the bank $185 million, alleging that more than 2 million bank accounts or credit cards were opened or applied for without customers’ knowledge or permission between May 2011 and July 2015.” 3.5 million fraudulent account later Wells Fargo realize this incentive plan may have been a mistake. “That’s up from 2.1 million accounts that the bank had cited in September 2016, when it acknowledged that employees under pressure to meet aggressive sales targets had opened accounts that customers might not have even been aware existed.” Implores Ken Sweet, in his August 2017 article, “Wells Fargo Says 3.5 Million Accounts Involved in Scandal”. Wells Fargo failed to deploy social incentives that would combat the potential risk of fraudulent behavior. Subsequently, Wells Fargo is said to pay out over 400 million dollars in fees and customer reimbursements. Financial institutions rest on the foundation of honestly, integrity, and fiduciary responsibility. Paying out fines and reimbursing employees will be painless in comparison to the amount money and time it will take to recover the image of the Wells Fargo brand. 
How you pay your employees is much more important than what you pay your employees. If a company wishes to increase productivity, the first step is motivating the employees, curating a sales oriented culture, and creating specified talent searches, and candidate profiles, to bring in sales oriented people. Where Wells Fargo went wrong was not curating a sales oriented culture in their community banking sectors and bringing in sales oriented people who can shed their sales expertise onto their colleagues. Although, employees weren’t provided with effective outreach and instruments they could use to effectively and ethically take advantage of the newly implemented sales driven individual incentive plan.”the formula of disaster might have been as simple as this: Open a new account. Move a small amount of money in. Close the account and put it back. Repeat. Get a bonus.” Asserts Chris Cancialosi, columnist from forbes.com, in his article, “Wells Fargo And The True Cost of Culture Gone Wrong”. Thus, Without effective strategies employees came up with their own formulas for sales success.
Just as the mortgage loan officer who sold faulty and variable interest rate loans to make sales quotas, all while contributing greatly to the collapse of the global economy, or the executives at Enron who exploit the Mark-to-Market accounting method for personal gain, these types of variable compensation methods can be a driver of behavior if not handled delicately. plans all while contributing greatly to the collapse of the global economy, Wells Fargo sales representatives were taking advantage of customers because their only motivator was money. To conclude, if you have not screened for ethical people, just as Adam Grant describes givers and takers, when push comes to shove people with stack the deck in their favor to maximize their personal gain.

Works Cited:

https://www.usnews.com/news/business/articles/2017-08-31/wells-fargo-now-says-35-million-impacted-by-sales-scandal
http://abcnews.go.com/Business/timeline-wells-fargo-accounts-scandal/story?id=42231128
https://www.forbes.com/sites/chriscancialosi/2016/09/15/wells-fargo-and-the-true-cost-of-culture-gone-wrong/#293e0e4765cb

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