“You can never win by doing the right thing,” is George Hamada’s reaction when he received a summary of his unit’s performance evaluation. George, who oversees a cost center, has a staff of 40, including 32 specially trained individuals or professionals. His complaint arose because George had taken two earlier corporate initiatives to heart. The first initiative was to increase diversity; George therefore emphasized recruiting and retaining persons from underrepresented populations. He was quite successful even though he had to match outside offers for three such employees. The second initiative was to increase training for the workforce. George accordingly increased the number of professional conferences his staff could attend. He allowed each person in his department two days off to attend a seminar relevant for their job. He also allowed two of his professional staff to take advanced classes offered by specialists.
These initiatives, however, caused George to exceed his unit’s cost budget. That single fact seemed to be the dominant reason for his so-so review. Indeed, the review did not even mention the increase in diversity among his staff.

Required:
a. How might George react to future “soft” initiatives that his firm might launch? Is such behavior in the firm’s long-term best interests?
b. How might the firm suitably measure and reward performance on multiple dimensions?
In your answer, be sure to address the claim that ultimately, all initiatives must lead to higher profit, so it is enough to measure financials alone.