Table 10.1 summarize reasons for the failure of CP plans. Consider two
examples of situations in which CP plans failed because of one or more of the reasons listed in this table. First, consider what happened at Green Giant, which is part of the General Mills global food conglomerate which includes such brands as Betty Crocker, Wheaties, and Bisquick. Green Giant implemented a bonus plan that rewarded employees for removing insects from vegetables. What was the result regarding performance? Initially, managers were pleased because employees were finding and removing a substantially higher number of insects. The initial enthusiasm disappeared, however, when managers found out that employees were bringing insects from home, putting them into vegetables, and removing them to get the bonus! A second example comes from the automotive division of Sears, a leading retailer of apparel, home, and automotive products and services, with annual revenues of more than US $40 billion. Its CP plan rewarded employees on the basis of parts and services sold to customers who brought cars in for repair. In California, a disproportionate number of Sears auto centers were making repairs. The California Consumer Affairs Commission conducted an 18-month investigation, during which it sent some of its members to the auto centers posing as customers. What did they find? Sears employees were “finding” a lot of problems and making a lot of unnecessary repairs. Half of Sears’72 auto-service centers in California were routinely overcharging customers for repairs, and Sears mechanics billed the undercover agents for work that was never done on 34 of the 38 undercover operations.