The misalignment between formal objectives and the behavioral outcomes produced by incentive structures.
Full Definition
Incentive Distortion occurs when the reward, evaluation, or performance measurement system drives behavior that contradicts structural intent.
Organizations rarely design incentives to create instability.
They create it when incentives optimize locally while structure requires systemic alignment.
Incentive Distortion appears when:
Speed is rewarded but containment is penalized
Volume is rewarded but quality constraints tighten
Compliance metrics override decision coherence
Individual performance outweighs cross-node stability
Under pressure, distorted incentives amplify:
Authority Diffusion
Boundary stretching
Trade-off concealment
Decision Drift
Incentive systems do not just motivate behavior.
They reshape architecture indirectly.
If incentives reward variance, boundaries weaken.
If incentives reward escalation avoidance, residue accumulates.
Distortion is rarely visible in reporting.
It is visible in structural behavior.
Structural Role in NAP
Within NAP, Incentive Distortion functions as a governance-level destabilizer.
It interacts strongly with:
Accountability Structure
Decision Boundary clarity
Trade-off transparency
Operational Coherence
High Political Complexity environments are particularly vulnerable.
Incentive misalignment increases interpretive strain and accelerates structural drift.
Engineering against distortion requires aligning incentive logic with containment logic.
Incentives must reinforce architecture, not bypass it.
