5 ms·

Aligning employees' interests with the long-term interests of the company is really challenging. A typical counterexample to compensating in proportion to equi

by gen220 3y ago

Aligning employees' interests with the long-term interests of the company is really challenging. A typical counterexample to compensating in proportion to equity performance is compensating in proportion to revenue or profit performance (i.e. something still related to market performance, but with fewer tangential variabilities). But I don't think that switcheroo would have resulted in a different outcome, here? I think, perhaps, the underlying issue is the cultural norm of lionizing revenue to the exclusion of all other corporate principles. In this case, it's not really the Sales person's fault. It's Jerry's manager, or Jerry's managers' manager, etc. – for allowing the feature-blind prioritization of revenue to fester.

jedberg 3y ago
Most businesses have one or more metrics that they track that mirrors customer happiness or satisfaction. For example Netflix has total paid subscribers. Amazon has monthly active users (as does reddit and whole bunch of other companies). Reddit also has daily average time on site. You could easily tie compensation to these metrics. Of course in some cases these too can be gamed, but as long as you find a metric that mirrors customer happiness, then everyone is incentivized to increase customer happiness.
- peter422 3y ago
  You can increase monthly active numbers by making unsubscribing harder. You can increase average time on site by just funneling people lowest common denominator garbage all day. Pretending there is some magic metric here and Google isn’t meeting it is ridiculous. Google is very well liked by the average person!
- gen220 3y ago
  Those metrics are in fact routinely gamed by well-meaning PMs whose (perceived) compensation is affected by those numbers, with UX-dubious features like unnecessary and disruptive notifications, highly discounted introductory promotional periods that most users churn out of, and so on. Hence the adage: the most effective way to take a useful metric for measuring progress towards a goal and make it useless, is to make the metric the goal.

by gen220 3y ago

jedberg 3y ago

Most businesses have one or more metrics that they track that mirrors customer happiness or satisfaction. For example Netflix has total paid subscribers. Amazon has monthly active users (as does reddit and whole bunch of other companies). Reddit also has daily average time on site. You could easily tie compensation to these metrics. Of course in some cases these too can be gamed, but as long as you find a metric that mirrors customer happiness, then everyone is incentivized to increase customer happiness.

peter422 3y ago
You can increase monthly active numbers by making unsubscribing harder. You can increase average time on site by just funneling people lowest common denominator garbage all day. Pretending there is some magic metric here and Google isn’t meeting it is ridiculous. Google is very well liked by the average person!
gen220 3y ago
Those metrics are in fact routinely gamed by well-meaning PMs whose (perceived) compensation is affected by those numbers, with UX-dubious features like unnecessary and disruptive notifications, highly discounted introductory promotional periods that most users churn out of, and so on. Hence the adage: the most effective way to take a useful metric for measuring progress towards a goal and make it useless, is to make the metric the goal.