INCENTIVE & SIGNAL DISTORTION ANALYSIS (OPERATIONAL) 

Metric-Driven Behavior Reconstruction 

What Is Incentive & Signal Distortion Analysis? 

Incentive & Signal Distortion Analysis (Operational) is a structured diagnosis of how KPIs, targets, reporting signals, and internal scorecards shape real behavior—often in ways that degrade throughput, quality, and stability while making metrics look “better.” 

It does not analyze compensation, payroll, or HR policy. 
It analyzes operational signal design: what gets measured, what gets rewarded informally, what gets punished, and what behavior that produces. 

Why This Is Needed 

This service is used when: 

  • KPI performance improves while delivery/quality/throughput worsens 

  • teams “hit the number” by shifting burden downstream 

  • inspection increases without stability improvement 

  • rework and escapes persist despite “good metrics” 

  • departments optimize locally while enterprise flow collapses 

  • leadership receives “green dashboards” during operational deterioration 

Examples of Distortion Patterns 

Lawful, operational examples (non-compensation, non-HR): 

  • A production team reduces reported scrap by reclassifying defects as “rework,” increasing hidden load and lead time. 

  • A department hits on-time internal handoffs by pushing incomplete work downstream, increasing downstream rejects. 

  • A team improves utilization by overloading WIP, increasing queues and cycle time instability. 

  • A quality metric is achieved by adding inspection, but the defect-generation mechanism remains untouched. 

How TJEG Performs the Analysis 

  1. Signal Inventory 
    Identify the KPIs and signals that actually influence behavior (formal and informal). 

  1. Behavior Trace 
    Map how teams respond under pressure: what they change, bypass, defer, or hide. 

  1. Distortion Mechanism Identification 
    Identify where signals reward the wrong local behavior and create enterprise instability. 

  1. Counter-Signal Design Options 
    Define signal corrections: definitions, thresholds, cadence, escalation triggers, and ownership clarity. 

What This Delivers 

  • Signal/KPI Distortion Map (which signals drive harmful behavior) 

  • Behavior Mechanism Register (how distortion manifests operationally) 

  • Hidden Work / Burden-Shift Paths (where load is pushed downstream) 

  • Corrected Signal Architecture Options (definitions + triggers + cadence) 

  • Executive briefing: “what to change first” (non-financial, non-legal) 

Engagement Characteristics 

  • Rapid, mechanism-based 

  • Works best paired with Variance Mapping and Flow Diagnostics 

  • Suitable for multi-site “metric drift” environments 

Cost & Commercial Structure 

Fixed-scope engagement. 
Typical range: $15,000 – $45,000 (scope-dependent). 
No contingent fees. No success fees. 

Compliance Boundary 

Operational intelligence only. 
No legal advice. No compensation analysis. No payroll review. No HR determinations. No financial/valuation analysis. 
No outcome guarantees. 

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Initiate Incentive & Signal Distortion Analysis (Operational) → 


(Leads to intake: KPIs used, reporting cadence, instability symptoms, departments in scope)