One topic that comes up often in discussions with the dealers I work with is aligning incentives towards the activities you want your team members to carry out and the behaviors you want them to exhibit. Sometimes aligning incentives is easy: pay them more if they do x, y or z. Other times it’s less straightforward: perverse incentives can crop up in unforeseen ways.

With incentives, the really clever ones on your team will always figure out how to max out their pay by achieving the things you asked of them. But that same cleverness can derail your plans if they figure out ways to game the system and make more money without delivering much in the way of added value.

A long time ago, I worked at a department store in its big-ticket department selling furniture, appliances, electronics and mattresses. It was a 100% commission sales job. It was also a place with a remarkably toxic company culture, but that’s not important right now. With a sales team of mercenaries and (to put it mildly) bitter, cynical salespeople, the company had come up with an unusual incentive to get salespeople to take time off the sales floor to do things like administrative duties or showing up for product knowledge seminars. They called it Non-Productive Time, or NPT.

NPT was calculated based on your last year’s commission income divided by your hours worked. So if your NPT worked out to $18 an hour (and back then, in the Stone Age, that was not a bad hourly rate), that’s what your manager would approve on your paycheck for the time you spent working but not selling.

It seems like a good idea, and broadly speaking, it is. So, where could it go wrong? Salespeople who find a way to exploit it. Like me.

Here’s the background to our case study: This department store was very big and very old, and its data systems were in multiple, incompatible silos. Long story short, our paperwork processes were a mess. Reconciling our sales invoices with the inventory system was time-consuming and not fun. It was also the consensus of the sales team that “we get paid for making sales. If the company can’t reconcile its inventory, that’s not our problem.”

In addition, while the core team of salespeople was mostly bitter old lifers (and the odd person like me who managed to escape after a couple of years), managers never lasted long. They got rotated in from departments they understood, like ladies wear, into a department they knew nothing about and didn’t want to learn.

My last manager made it clear they didn’t want to be there, and had no interest in learning how our systems worked. Despite their apathy, they were still responsible for our reconciliations, so when I volunteered to take care of it during slow times for them for NPT, they lept at it. Pretty sweet deal: hours of NPT a week and still earning a commission when it’s busy.

Of course, this side deal metastasized — our paperwork was such a monster; it needed more time. So I got approval to come in four hours early on weekends to handle the reconciliations.

It was a sweet deal for me, but not so sweet for the company that was still paying a department manager’s salary while also paying a sales guy 20+ hours a week to do the department manager’s job for them. In that situation, someone higher up would ask, “Why do we need a general manager at all?”

Because it was categorically not a well-run organization, no one brought it up. I did mention earlier that it was a toxic workplace but also more than a little dysfunctional. The lesson I took away from that experience was to give incentive plans a 360-degree view and not only ask, “will this incentivize the behaviors I’m looking for,” but also, “how can someone break this?”