The dangers of inappropriate goal setting

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Firms Involved

  • Wells Fargo

Year of the event


Description of the case

Wells Fargo is one of the largest retail banks in the US. Since the start of the 2010s, the bank implemented a strategy of cross-selling, which consisted of trying to reach to existing customers and sell them additional services. However, very high quotas were imposed on the employees charged with implementing the strategy. To reach their goals, a significant number of employees started opening unrequested accounts, unbeknownst to and at the expense of the customers. The practice became widespread, with 1.5m deposit accounts and 600k credit-card accounts created this way, incurring close to $2.5m of fees. Wells Fargo was fined $185m by the SEC, while 5,300 employees were fired[1]. The top management of the firm also ended up being shaken up, with CEO John Stumpf having to resign for ignoring whistleblowers and evidence of wrongdoings.


  • Inappropriate goal setting can create perverse incentives for employees and managers and have dire consequences
  • Suppressing critics and downplaying whistleblowers usually can't keep a secret forever and makes it more likely that unhappy employees go to the press.


  1. Bloomberg, Matt Levine, Wells Fargo Opened a Couple Million Fake Accounts