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I think there are a couple of relevant points that were not mentioned in the article: 1) The only reason those ads could sell is because of the brand that Fog
by johnrob 18y ago
I think there are a couple of relevant points that were not mentioned in the article:
1) The only reason those ads could sell is because of the brand that Fog Creek had already created. That brand requires an entire company to maintain.
2) The job board produced 1 million in revenue for Fog Creek. Since Fog Creek had existing revenues, a better way to quantify that is to say that revenue increased by X percent. So rather than say that an employee brought in an extra million, it's more accurate to say that he/she made an X percent increase in revenue.
With this logic, Here's a compensation idea - give the employee the same percentage increase that the incremental revenue represents. If you increase company revenue by 10%, you get a 10% raise.
- d0mine 18y agoIf you increase company revenue by 10%, you get a 10% raise. </quote> You've missed the point. There are direct and indirect contributions to revenue. Only because his contribution was direct it doesn't mean one should reward him more than another programmer that made not so easy to spot contribution. If one can't measure indirect contributions in dollars then one should not reward direct contributions in dollars too. Additionally see intrinsic vs. external motivation in the article.
- johnrob 18y agoYou make a good point. Everyone contributes to the bottom line. However, in this case we are dealing someone who goes above and beyond their role to create value for the company. The intern wasn't brought on to create a new business model, but he did it anyways. There would have been no penalty had he never even mentioned the idea. That's why it deserves special compensation. Both to reward the person, and to ensure that other employees will speak up when even when they have no obligation to do so.
- rjprins 18y agoIt still doesn't mean he deserves compensation. He was not extrinsicly motivated at all, so he although he would probably like the money it's not what he "deserves". I'd say he deserves recognition for his contribution, and that was throwing in the idea of ads. It's not a new idea, he just brought it convincingly with the knowledge that ads at 37signals cost $250. Well, he got plenty of recognition now.
- johnrob 18y agoWouldn't companies want to reward people for assuming an extra role and creating value, regardless of whether it is deserved? The more I think about it, the difficulty of implementing a policy like this could be the show stopper here.