As a business owner I often found that the threat of “punishment” simply incentivises employees to lie. Sometimes it even forces them to do so! Strangely (or not), positive incentives like bonuses, also often have the same effect, as I was amused to discover in this funny story that was recounted by my local Micronesian scuba diving guide:
“An Italian couple had already been diving in Yap for 3 days and had not seen a shark, which is unusual, so they were getting desperate. Sharks are normally easily seen in Yap in a number of diving spots, but mostly at the Vertigo dive site, as the locals feed the sharks there to make it easy for the scuba diving guides to find them and please their clients. Before feeding them the locals typically run their boat in circles and the sharks now know that this sound means it is feeding time!
However, the Italian couple insisted NOT to visit Vertigo, because they were against the practice of locals feeding sharks there. At the same time as they were desperate for sharks, they offered the local boat operator and the local diving guide, whose salary is only 1.5USD/hour, a reward of 100USD each if they managed to see sharks on their last diving day. The two locals would not miss such a bonus, and speaking in their local language, planned to drop the guide and the two Italian divers at a spot a bit far from Vertigo, but where the current was strong and would quickly push them towards Vertigo and its sharks.
The plan worked and the divers were finally excited to see their first couple of sharks, unaware they were at Vertigo. Nevertheless, the boat driver did not know this and wanted to make sure that sharks come, so he started the engine and did a few circles with the boat to clearly call them. Shortly afterwards about 30 hungry sharks appeared and our Italian divers were in the middle of this, extremely scared, as a number of sharks approached them in an probing way. The local guide told me that he had never seen the sharks like that, and he was also scared for the first time! Eventually, after a number of attempts they managed to safely get on the boat.”
The moral of this story is to be cautious when trying to incentivise people, as this may literally force them to lie and do the wrong thing! Some of the results of CEO bonuses or Investment Banking bonuses in recent years are a good example. And of course, the second moral of the story: Nature is not a zoo, STOP feeding the sharks!