On knuckleballs, incentives, and goals

The Red Sox can't manage to stay afloat in a tough division, but they can at least provide us with some useful management lessons.

Last night, veteran knuckleball pitcher Tim Wakefield started against the Tampa Bay Rays. Even though he gave up five runs (four of them earned), he qualified for the win by pitching five innings and having the Sox take the lead for good in the bottom of the fifth. Besides getting the win — only his fourth against ten losses — Wake accomplished a number of other things in the game. First, he became the oldest pitcher (at 44) in Red Sox history (spanning 110 years) to win a game for the team.

Once he got his tenth out in the fourth inning (thus reaching 130 innings for the season), he earned a half-million-dollar bump in his guaranteed salary (to $2 million) for 2011. (He also earned a $75,000 bonus for making his eighteenth start of the season.) So it's fair to say that the game was worth an extra $575,000 to Wakefield on top of the prorated portion of his $3.5 million salary for this season. And Wakefield could certainly look at it that way.

But the team should not conclude that this meaningless, late-season win cost it an extra $575,000. Yes, that was the marginal cost of the game. And last night's game was a spot start; the team could have had someone else pitch to avoid having Wakefield reach the starts and innings milestones that triggered the incentive pay.

But I'm certain that Sox management never considered a financial downside to having Wake pitch. By giving the pitcher various incentives to make more starts and pitch more innings, they encouraged a season-long performance that was plenty valuable to the team. The real cost to the team of last night's game was his pay for the total season divided by the 29 games he's appeared in — a number less than $140,000, which will decrease as he pitches more over the next few weeks.

Too often, employers worry about the marginal cost of someone reaching a threshold that triggers an incentive bonus. That's looking at it the wrong way. The right way is to consider the whole body of work, partially driven by the incentives.

Finally, last night's game marked another milestone for Tim Wakefield: it was his 179th win for the Red Sox. He's currently in 3rd place in team history, behind the immortal Cy Young and the tarnished Roger Clemens, who are tied for 1st at 192 wins. Wakefield has been open about wanting to reach 193 wins and become the winningest Red Sox pitcher of all time. It's a goal that drives him. The Red Sox know this, and I'm sure the team wants to help him achieve that goal.

Sometimes, goals can be even more important than incentive bonuses. A good employer helps its employees identify and reach for those goals.

For more Red Sox management lessons, see "An organizational belief" and "Clubhouse rules." For more reporting on Tim Wakefield, see this post by Boston Globe blogger Peter Abraham (@PeteAbe) and this article by Globe columnist Nick Cafardo (@nickcafardo).

What do you think about incentive bonuses and goals? Are they worth the extra cost? Share your thoughts in the comments below.