Friday Puppy Love

The Economics of Puppy Management

Everything I needed to know about sales force compensation, I learned by getting a puppy

Last week, my home was invaded by a sort of intelligent alien with phenominal psi powers. It not only seems to know what we are thinking, but more ominously, seems to be able to manipulate our emotions with a brutal precision that totalitarian brainwashing experts could only dream of. It's not merely that we're being manipulated, but also that we crave its manipulation. We rearrange our schedules so that we can spend more time catering to its every whim.

In short, we have adopted a puppy.

Fitzgerald is almost 8 weeks old, and as cute as, well, an eight week old bullmastiff puppy. With his melting gray eyes and inveterate desire to cuddle, he is the sweetheart of all right-thinking people, friend to the world . . . and the mortal enemy of hardwood floors. How to get Fitzgerald house trained before the floorboards begin to warp?

The project has some added urgency with Fitzgerald, because he's a big boy, already weighing in at somewhere north of fifteen pounds. All puppies are natural anarchists, but with most breeds, you have a few months of lead time. With bullmastiffs, on the other hand . . . it took Fitzgerald 3 days to figure out how to break out of the playpen where we'd confined him.

In the olden days, you apparently house trained puppies by rubbing their nose in their mess and then whacking them with a rolled up newspaper. It turns out that this was a brilliant bit of anthropomorphizing. Puppies don't connect the mess with their earlier behavior, so all you're really doing is teaching them to eat feces. And as any dog owner will attest, most puppies need no training in this regard. They are self-taught masters.

So we use the method approved by the American Humane Society: watch them like a hawk, take them outside frequently, and then give them a treat and praise them extravagently every time they go. Every. Single. Time. The ecstatic cries of "Good boy, Fitzgerald!" ring down our back alley so often that our neighbors probably think we're staging a revival of "The Vegetable". I believe that trainers call this the "reward method", but since I'm a business writer, I like to call it "Pay for Performance".

Of course, just like an employer with a newly instituted Pay for Performance scheme, we're slightly worried that young Fitzgerald is gaming the metrics. Before he even begins, he is looking around to make sure there is a treat in our hand. And he only performs where he can be seen; more than once, he has started to squat behind an obstacle, then looked up, reconsidered, and moved somewhere out in the open where he can be sure that he is in my line of sight.

Moreover, the episodes of bathrooming are becoming more frequent. It used to be one of each, but now, he goes three or four times every time he goes into the back yard. As economists tell you, when you subsidize something, you get more of it. One can envision a future where this cycle becomes a near-continuous loop, as we reach a steady state where the rewards are going out the back end at pretty much the same rate as they're being put in at the front.

But luckily, because I'm a business writer, I know better than to take counsel of these sorts of fears. I've seen what happens at too many companies who decide that their sales team is waxing a little too fat on all those commissions. They feel taken advantage of: all those salesmen timing their deals, or structuring the sale, just to maximize their commissions! Sucking up hard-earned money that could be going into bonuses for senior management!

So what do they do? They change the compensation scheme. They lower the commission, or more often, they come up with some complicated formula that could theoretically make the sales people more money if they were Jedi Masters with some post-doc work in statistics. Believing that most sales people are not the leading academic stars of their organization (they were too busy having friends, and fun, in school), management figures that in practice, they'll find the system too hard to game, and will just go back to selling their little hearts out for whatever little shreds management is willing to give them.

Invariably, it turns out that the sales people are plenty smart enough to figure out when they're getting hosed. In fact, when it comes to their compensation metrics, as Jim Manzi once told me, "Suddenly, they're like Aristotle." The new scheme eventually falls apart when one of three things happens:

1. Sales fall.

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2. The sales team learns to game the new system.

3. The sales team doesn't learn to game the new system, and quits.

The lesson being, if things are going pretty well, you should leave your compensation scheme alone.

And the truth is that even if there's a little chicanery going on, the current compensation scheme is working brilliantly. Young Fitzgerald eagerly runs to the door to let us know he'd like to go out--after all, why would you go inside when for a minute's wait, you could get paid for doing it in the yard? It would be foolish to start hoarding the Pupperoni just so that we'd have more time and money to spend on frequent mopping.

Unfortunately, to too many managers, that feels like giving in to brazen manipulation. If only salespeople were fuzzy and wagged their tails more, they'd probably find it easier to cooperate with the inevitable.