"Under this plan, people have no incentives to give more and work harder." There are some people ("salesy" types particularly) whose performance is motivated a

"Under this plan, people have no incentives to give more and work harder." There are some people ("salesy" types particularly) whose performance is motivated almost exclusively by money, but I find this to be the exception. As was mentioned in the article, hard work tends to come from high job satisfaction. Compensation is only one component of that, and arguably not the most important, provided it's not unfairly low. Finally, if you're right and Joel's wrong, how do you explain Fog Creek's success? Do you consider them an outlier? If so, can you give a counter-example of when you've seen this system fail? Fog Creek is strong evidence of the efficacy of this approach, while you seem to be relying on nothing more than your opinion.