5 ms·

I look forward to reading this book. It would be interesting to have an investigation of the two different kinds of "skin in the game" in this book. There is a

I look forward to reading this book. It would be interesting to have an investigation of the two different kinds of "skin in the game" in this book. There is a positive spin of the expression, e.g. the entrepreneur, who has skin in the game of his company via his shares and resources. This scenario (ideally) results in eustress. However, there is also a negative spin of the expression, e.g. an employee, who has skin in the game by being afraid of losing his job. Usually, this leads to distress over the long term. Hence, if I want to employ someone I face a dilemma: the employee should have skin in the game, but it shouldn't create distress. There's a huge set of options you can go with as the employer, but I wonder if there is an optimal solution.

deepnet 10y ago
Misalignment of incentives with desired outcomes is often overlooked as a cause of social ills. In general people do what gets them pay and promotion. Bonuses and shares align owners and employees interests. In Shaw's introduction to Pygmalion he points out we pay our doctors when we are ill; contrasting this to paying only when well, which Shaw suggests more clearly aligns preventative medicine with doctor's pay. Or the classic budget underspend resulting in less funding next year, incentivising innefficiency. 'Juking the Stats' is the epitomy. A useful metric, like pupils passing tests when used to allocate budgets becomes the sole object of teaching. Rather than education, the school teaches the test and worse those who are educators are ground down - as Simon's Pryzbylewski finds in The Wire.
- JulianRaphael 10y ago
  I agree, although bonuses and shares can also backfire (esp. bonuses). There seems to be a mix of extrinsic and intrinsic factors that work well. Do you think there is an optimal solution to make an employee have skin in the game, but in a positive way?

deepnet 10y ago

Misalignment of incentives with desired outcomes is often overlooked as a cause of social ills. In general people do what gets them pay and promotion. Bonuses and shares align owners and employees interests. In Shaw's introduction to Pygmalion he points out we pay our doctors when we are ill; contrasting this to paying only when well, which Shaw suggests more clearly aligns preventative medicine with doctor's pay. Or the classic budget underspend resulting in less funding next year, incentivising innefficiency. 'Juking the Stats' is the epitomy. A useful metric, like pupils passing tests when used to allocate budgets becomes the sole object of teaching. Rather than education, the school teaches the test and worse those who are educators are ground down - as Simon's Pryzbylewski finds in The Wire.

JulianRaphael 10y ago
I agree, although bonuses and shares can also backfire (esp. bonuses). There seems to be a mix of extrinsic and intrinsic factors that work well. Do you think there is an optimal solution to make an employee have skin in the game, but in a positive way?