Please respond to my classmate’s discussion post: Please see the original assignment below the discussion post.
Hello,
When a company sets unrealistic sales goals, it can create a high-pressure and stressful work environment where employees can feel the need to meet the goals regardless of what it takes. Setting this precedent can lead to unethical behavior, such as opening unauthorized accounts and selling products or services that people don’t want just for an employee to meet those goals. Employees may feel like they need to do these things in order to have job security or simply just keep their jobs. Filter described in the article that “In court papers, prosecutors described a pressure-cooker environment at the bank, where low-level employees were squeezed tighter and tighter each year by sales goals that senior executives methodically raised, ignoring signs that they were unrealistic.” (2020, para 3) Ignoring the signs led Wells Fargo into a lawsuit.
When a company establishes penalties or consequences for not meeting certain goals, it can lead to a fear-based culture where employees feel the need to meet those goals even if it means they have to engage in unethical behavior. Tayan shared that “Branch managers were assigned quotas for the number and types of products sold. If the branch did not hit its targets, the shortfall was added to the next day’s goals. Branch employees were provided financial inventive to meet cross-sell and customer-service targets, with personal bankers receiving bonuses up to 15 to 20 percent of their salary and tellers receiving up to 3 percent.” (2019 para 10) With these measures, established employees can feel intense pressure to avoid having to meet extra quotas or receive incentives for engaging in unethical activity. Employees fostered a short-term gain over a long-term ethical erosion.
References
Flitter, E. (2020, February 21). The price of Wells Fargo’s fake account scandal grows by $3 billion. The New York Times. https://www.nytimes.com/2020/02/21/business/wells-fargo-settlement.html
Tayan, B. (2019, February 6). The Wells Fargo cross-selling scandal. The Harvard Law School Forum on Corporate Governance. https://corpgov.law.harvard.edu/2019/02/06/the-wells-fargo-cross-selling-scandal-2/
Orginal post:
Please read the article in the Harvard Law School Forum on Corporate Governance “The Wells Fargo Cross-Selling Scandal”, (February 6, 2019) (Note: This article is located in the Readings & Resources section of this module). The author discusses the dangers imposed by setting unrealistic sales targets.
Please discuss the following questions in relationship to the article:
1) The article notes the following statement “As sales goals became more difficult to achieve, the rate of misconduct rose.” Of note, the report found that “employees who engaged in misconduct most frequently associated their behavior with sales pressure, rather than compensation incentives.” Discuss how setting unreasonable sales targets for employees can lead to unethical activities.
2) Discuss how establishing punitive measures for variances between budgeted and actual results can foster a corporate culture in which employees engage in unethical activities to meet the requirements specified in a budget.
Original post:
