Perverse incentive

A perverse incentive is a situation where a reward or incentive leads to unintended and undesirable outcomes. Instead of promoting positive behavior or results, these incentives may encourage individuals or organizations to engage in counterproductive actions or to exploit the system. For instance, if a company rewards employees based on the number of sales closed without considering the quality of those sales, employees might resort to aggressive or unethical sales tactics, leading to customer dissatisfaction or a damaged reputation for the company.