The main risk of linking KPIs to incentives is that:

(A) Your KPIs may not be linked to your business strategy

(B) Your KPIs may be inaccurate

(C) Your incentives may be ineffective

(D) People may manipulate the KPIs as an unintended consequence

Explanation

The main risk of linking KPIs to incentives is that people handling the data may manipulate these Key Performance Indicators(KPIs) as an unintended consequence and these manipulated KPIs when linked with incentives will give the wrong results.

Conclusion

This question is a part of the Recall: Organisational control systems exercise from the Organisational design: Know your organisation course. You can check out all the answers to this exam in our Organisational design: Know your organisation Quiz Answers page.

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