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Research on the subject seems to contradict you. There are several problems - Incentives are very hard to get right. If your bonus is tied to sales you inflate
by mixmax 17y ago
Research on the subject seems to contradict you. There are several problems
- Incentives are very hard to get right. If your bonus is tied to sales you inflate sales and don't care about margins. If your bonus is tied to margins you oversell and someone else suffers in aftersales support. If your bonus is tied to stockprice you do what you can to inflate the stockprice, hoping everything won't come crashing down before you receive your bonus. And so on.
- When it comes to it very few people are driven by money. They'll say they are but in reality they aren't. Would you knowingly sell something expensive to an old lady who can't afford it that she doesn't need in order to make a sell and get your bonus? Most people wouldn't.
- Incentives drive you to only care about the incentive for which you're awarded. If you're in one department and can make $10 knowing that another department will lose $100 that's what you'll do.
Besides very few choices in life, if any, are as black and white as you put them.
- gaius 17y agoWhen it comes to it very few people are driven by money No economist believes that they are. People are motivated by a concept called "utility" which is, money, a nice office, interesting colleagues, meaningful work, a short commute, opportunity to assert authority, and other factors. The exact mix will vary from person to person, but the money is important: it often determines quality of life outside of work. All other things being equal, people will join the company that will maximize this, or appears to at hiring decision time. If one company has, even on paper, profit sharing/bonuses/stock options/whatever, and its rival doesn't, who's going to get the pick of the talent?