Next in the” Vitasek on Vested” series for SSON: Don’t Fall into the Activity Trap There are many “perverse incentives” in buyer-supplier relationships that can disrupt or even doom outsource relationships, but perhaps none of them are as perverse and downright dangerous as the one I call the Activity Trap… Published online on 22 July […]
perverse incentives
SSON — July 2014
Are You Embedding Perverse Incentives in Your Outsourcing Agreement? Article by Kate Vitasek posted on SSON 7 July 2014 Incentives are usually considered a good thing, right? They encourage engagement, investment, and innovation. Then why has the topic of “perverse incentives” gotten so much traction? For one thing, the economist Steven D. Levitt (and Stephen J. […]
Paying for Performance in the Legal Profession
About one year ago I wrote about a common problem in the legal profession—overbilling—as a prime example of the Activity Trap. It was a frightening example of “billable hours” gone bad and becoming a perverse incentive at a major law firm. So I was really pleased to read an article in the ABA Journal about […]
The Imp of the Perverse in Outsourcing
The old saying, “If I didn’t have bad luck, I wouldn’t have any luck at all,” could easily apply to outsourcing incentives: If there weren’t any perverse incentives in a contract, there likely wouldn’t be any incentives at all! Incentives play a critical role in in Vested Outsourcing, namely in identifying and achieving the win-win […]
