How do you manage budget gaming / sandbagging?
A core FP&A interview question — asked in analyst and associate interviews across IB, PE, and the Big 4.
THE SHORT ANSWER
Sandbagging = managers lowballing targets to beat them easily. Counter with: benchmarking against history and peers, top-down constraints to challenge bottom-up submissions, stretch-vs-commit target structures, and linking incentives to accuracy not just achievement. Rolling forecasts reduce annual gaming. Most importantly, separate the planning number (realistic) from the incentive target (stretch) so people don't pad both.
WHAT INTERVIEWERS LISTEN FOR
- ✓Benchmarking against history and peers
- ✓Top-down constraints challenge bottom-up
- ✓Stretch vs commit target structures
- ✓Incentives linked to accuracy
- ✓Separate planning from incentive targets
COMMON MISTAKES
- ✗Blames managers without systemic fixes
- ✗Suggests eliminating stretch targets
- ✗Ignores rolling forecast benefits
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