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Open Source vs. Wall Street Bonuses
tcd004 sends in a piece from PBS NewsHour on money and what actually motivates people. "What best motivates the workforce? More money? Fame? New studies reveal that beyond a certain threshold, large financial rewards can actually become a drag on performance in the workplace. Reporter Paul Solman compares million-dollar Wall Street bonuses to the rewards earned by the labor force behind the open source community."
In fact, people who do less useful work in society do earn more money. The reasons are twofold:
1. If someone is doing it for the money, he is spending his time in finding ways how to make money as opposed to spending time to improve his skill in the particular area. Thus all other being equal he will get more money.
2. You don't have to pay people who have intrinsic motivation to do something as much as you need to pay people for whom the money are the motivation. Sadly, that's economics 101.
Usually, the "intrinsic motivation" (other reason than money) to do something corresponds with what is useful for society, too.
(Note for moderators: I don't know if I am actually being sarcastic or not. It's sort of like Parkinson's law.)
One of the most successful supermarket and department store businesses in the UK is John Lewis - which is a mutual, a partnership of its employees. Which is very much like Open Source projects.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
If you haven't already seen it.
TFA just wants to push buttons and pander to popular opinion, but the reality is that it's more complex then "omgz wall st guys are lazy". i'd be shocked if anyone on wall st worked less then 14 hrs a day.
If you mod me down, I will become more powerful than you can imagine....
So do away with salary bonuses and just have a set of rooms on the top floor populated with "relaxation service providers". Good code shipped gets you one visit voucher. Good code shipped on time gets you two.
Don't dismiss the idea; it's not like Wall Street isn't already staffed by prostitutes.
I hate printers.
I find your comment very interesting because it speaks quite a bit of truth.
First saying that bonuses gets you the melt down is saying that if I put chocolate in the sun it will melt. Gee duh yeah, and wall streets are stuffed with people who only see short term profits. The idea of wall street is short term quick money! You only need to look at Easy Money with Eddie Murphy to understand that.
Regarding open source, well the mystic of open source is failing. Recently on Slashdot they talked about the open sourcers getting old and not attracting new talent. Well duh yeah! I talked a few friends and asked where are the youngsters going? The conclusion, "first find youngsters going into IT period..." And if you have found some then yeah most likely they are going to develop for the iphone.
The world has changed and quite frankly us IT people are not as important or vital as we used to be... We have shifted from competitive advantage, to cost center... Not good...
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
Another good example is the bonuses for keeping labor costs down at many stores and restaurants. If the manager keeps labor costs under a certain figure, he gets a bonus, even if the business ends up understaffed. This is why most businesses, especially chain restaurants, seem to be perpetually understaffed.
I want a new quote. One that won't spill. One that don't cost too much. Or come in a pill.
The book, IIRC, wasn't that direct in its description of the motivations of those folks.
Linus is a millionaire because of his reputation from starting Linux. If he didn't create Linux, he'd probably be some cubicle worker in Finland.
RIP America
July 4, 1776 - September 11, 2001
It might be off topic but as most of you have not read the article, here we go anyway:
I do work for a huge international bank and I do receive typically boni in the range of 4-6 monthly salaries.
As a lot of you seem to have strange prejudices about people receiving a bonus at a bank, let me rectify your picture. I am not an investment banker. I hardly ever wear tie nor suit. As a senior IT architect, my job is to look into the long term maintainability of large scale software systems. As a consequence, short term profitability is not part of my job description.
Funny enough, I do not feel motivated by receiving a bonus. Believe it or not but in the last years, I never cut corners to achieve my objectives. I kind of reach my goals anyway. At the bank I work, you do not receive a bonus for being extraordinarily good. You are entitled for a bonus if you did your job. And if I would fail reaching my targets, I could live without receiving a bonus. It feels more like extra money
However, the idea that as an employee of a company I also participate in the profit of the company I think very good. Personally, I think must people criticizing such a system are just envious. Yet, I do agree that banks handing out boni in years where they do not make profit strike me as strange.
Yeah, I took the money in 2009 anyway. Tell me that you would not have taken it...
Many things you get wrong the first try and right the second. Just call a failed attempt "planning".
When God goes to war, He drops big bangs.
"However, bonus schemes in many cases are inherently flawed and encourage people to cut corners or do their job in a known inefficient way in order to maximize the bonus."
One way around that would be to hold the bonuses in escrow for two years, to be release only on the condition that the company performs at least satisfactorily during that time. The money could be invested in two twelve-month certificates or funds and repossessed at the end of either one.
What to do with the repossessed bonuses is another question because if done wrong it provides further incentive to sabotage or under perform. Tricks like donating the bonus to charity won't work because they would only end up at a charity presided over by the loser or a family member or, worse, end up channeled into a PAC like the Gates' Foundation.
Beta is broken and the link to classic doesn't work. Stop wasting our time or there won't be anybody left here.
You can take a look at rates of productivity for most workers, and that while they have increased dramatically, pay has remained stagnant.
You do not see a corresponding increase in productivity in CEOs and pay is off the scale.
How terrible that anyone dare question if more money is getting better results.
Yes, your management probably considers IT to be a cost center. As you stated, servers don't maintain or install themselves, but the need for physical support of this equipment has decreased over time. If you've seen your management reduce the number of people working in IT over time instead of keeping them on board to work on more "competitive advantage" activities, they are reducing the impact of a cost center.
You have a point on the new data projects, but when was the last time you had a significant number of new hires working on a data project? If the project is a true competitive advantage, they will throw additional resources on it. If they're having you "make do" with what you have, you're a cost center.
Bonuses are to KEEP employees, especially developers, not to motivate them.
See for example Activision vs Infinity Ward, where the plan was to pay less bonus so employees would feel like leaving for the new formed company.
Interesting I was reading "Drive" from Daniel Pink, which talks exactly about it. One of the examples was the SOMA experiment where people would eventually actually work LESS after receiving a "bonus".
http://www.laymanpsych.com/2009/06/money-as-a-counter-productive-motivating-factor/
In Clinton's equivalent words, "It's the KICK, stupid!".
I think this misses the point. Money (and other incentives) work well to encourage inputs. For those tasks where there is a direct connection between inputs and outputs, money can improve outputs (like with your widget example). However, if the connection between inputs and outputs is looser, such as a task that requires creativity rather than brute force, incentives generally don't work as well.
Social scientists are inspired by theories; scientists are humbled by facts.