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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
by 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 agoI 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?