Can incentives eliminate corruption?

Corruption in government sector is on the rise. This has a cascading effect, which is not good in the long run.

Number of honest people in the government system is going down day by day. One main reason could be the salary levels (official) for government servants (including politicians). No honest person can survive in this inflationary market, unless he bends his approach. This is one main reason, which prompts honest people to turn to high paying private jobs than government jobs. This has given free hand to filthy politicians and corrupt bureaucrats, to spoil the whole system.

Under this circumstance, can the private sector type variable pay model and incentive model do wonders in minimizing corruption if not totally eliminating it. First we have to identify those roles, which are developmental oriented. Increase their salaries on par with private or even more and introduce incentive scheme and variable pay too. This will attract the best talent to government sector (including politics).

Incentive programs should be structured/devised in a way to induce the govt. servants to give out their best performance. For example, in infrastructure projects a percentage of the project cost should be demarcated for incentive. This incentive can be given to the key contributors in the project (including the minister), if it is completed before time/in time with minimum cost and maximum quality. If there is an over-run, then the demarcated money shall be carried forward. In police dept. such incentives can be given to those under whose jurisdiction the crime rates are the minimum.

Such an incentive based dynamic system will attract the best of the talent and will make them to remain honest too, because they earn/get their essentials (ie monetary benefits) through rightful means.

Related reading: Can IT spread, minimise corruption?

Whistle Blower Act

Feel Media can play this role better than individuals.

My suggestions are:

- Announce prize money/award for media (to expose corruption) - like the current hidden camera style sting operations.

- If the media company is itself involved in corruption (in collusion with the corrupt), then take back the prize for the first offence (or warn them if they have not been awarded till then) and cancel the license if it happens again.

- Media companies shall have a section in their website where Whistle Blower can leave details about corruption. Upon receipt of the details, they can conduct independent enquiry/sting operation and expose that corrupt practice and file the report with either High Court or Supreme Court for examination and award/sanction of prize money.

- Once the details are entered in the web site, a copy of the same should be sent as an acknowledgement to the Whistle Blower’s email address. If the media fails to act on that even after a specified period (say 3 months), the Whistle Blower can forward that acknowledgement to one designated email address, where it gets replicated and forwarded (automated process) to a group of authorities (like Chief Justice of High Court & Governor of the state).

The advantage here is, the Whistle Blower may register the corruption related details with more than one Media Company. Hence there is a chance that the final report could turn out to be a comprehensive one with views from different agencies/angles. If more than one agency files the report, prize money can be proportionately distributed.

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The OTHER side of Business

Many of us have heard about corruption in public service and have lived with it. Now we will start hearing about the same in private sector too (more often) in the days to come. Having seen how businesses are run and the transformation happening over the business space now, i can confidently say Enron was only a prelude...

HR for a change is now playing a catalyst role in this dubious transformation process. They should be happy because, all these days they were only silent spectators !!! Now they get a chance to play CHANGE AGENTS. lol.

Marketing gets a cut from agencies, Accounts from suppliers, HR from consultants and so on. Accepting gift has been part of culture for long. However DEMANDING a major share eats into service providers profit margin. This more often gets reflected in the quality of the product or the price. Over expectation has never been good.

Though performance linked pay has pushed people to be more productive, there is a fall out now. In order to get that bonus, managers inflate their performance and use all dubious means to project an artificial performance. When they fall short of organic growth, they resort to inflate the bills of customers and reach the target and get their short term benefit. They are also sensible(!) to do this for shorter duration and move out of the company faster.

Such Enron type processes are happening often these days and HR is now part of this change management process. HR is now more focussed about negotiating the highest cut than initiating a sensible culture building process. No doubt the attrition levels and salary inflation are on the higher side.

Should i blame greed or the materialistic leanings. Inflation though creates a short term artificial vibrancy; is not good in the long run. During crisis, the structure will collapse resisting all the support, like the dotcom bust.

Let us not create more Enrons...

Death of Currency Notes & Coins

The spread of IT will result in the Death of Currency Notes in about 100 years.

Payments will be thru online mode (internet/mobile), credit card or debit card. Even petty shops will be online then, and beggers would accept mobile money transfer (as being done for mobile easy-recharge now) !!!

Will it also result in the Death of Black Money and phase out of corruption ???