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Open Source vs. Wall Street Bonuses

Posted by kdawson on from the can't-buy-me-whuffie dept.

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."

49 of 172 comments (clear)

  1. Real world already knows this by ender06 · · Score: 5, Insightful

    Who would've imagined that knowing you'd get a huge bonus anyway would make you work less/not as hard? The rest of us in the real world already know this.

    1. Re:Real world already knows this by Bert64 · · Score: 4, Insightful

      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.

      Look at traffic wardens who are supposed to be enforcing parking regulations, but are rewarded based on the number of tickets issued. So now it becomes in their interest to maximize the amount of regulation breaking so they can hand out tickets.
      Some police forces are rewarded based on number of arrests, so its in their interest to make no effort to prevent crime, wait for crimes to be committed and then arrest all the petty criminals who are a much easier target than serious or organized criminals.

      --
      http://spamdecoy.net - free throwaway anonymous email - avoid spam!
    2. Re:Real world already knows this by roman_mir · · Score: 5, Informative

      Well, I did the sacrilegious thing, I read TFA :( Sorry.

      So that's not what the thesis is. The thesis is that by offering to receive a very large reward as opposed to offering to receive a small reward without paying attention to the time, the people were driven to enter this mode of behavior, where they stopped thinking creatively and tried to solve the problem by brute force, without any regard the real question at hand. People who were offered large reward if they solved the problem quicker, actually did worse (took more time and did not come up with the optimal solution) on average than those, who were offered a small reward and where time did not matter (they saved about a third of time it looks like and came up with the optimal solution that corresponded to the actual requirements correctly.)

      So what TFA is saying is that offering a lot of money quickly prevents people from actually doing a good job quickly and that they take on average more time then to do a worse job. It's like TFA is saying that people enter some sort of a panic mode and cannot think straight because of the money involved.

      --
      You can't handle the truth.
    3. Re:Real world already knows this by Rhaban · · Score: 5, Insightful

      As a developer, I see everyday that when someone is asked to do something with a tight deadline, it usually takes more time than if there's no deadline or a large one.

      When someone thinks there's no time to perform a task, they try to cut on "useless" parts like planning, modeling... and they try to begin "productive" work right away.

      The result is often that a lot of work has to be redone, and the global task ends up taking more time.

    4. Re:Real world already knows this by Anonymous Coward · · Score: 4, Informative

      http://en.wikipedia.org/wiki/Perverse_incentive

    5. Re:Real world already knows this by JaredOfEuropa · · Score: 3, Insightful

      I can understand the "panic mode" thinking when being offered a reward to solve a puzzle in 5 minutes. But does that really affect your work when you are being offered a large bonus at the end of the year? The bonus probably influences your decisions, as the article shows with the example of Wall Street bonuses, but it does so for very different reasons.

      All of that is already well known though. Money is a good incentive when there is a direct and immediate relation between your paycheck and your output: if you get paid $1 per Widget X made, you are well motivated to work a little faster, take shorter breaks, and make a couple extra widgets at the end of the workday. But when there is no direct relation between pay and performance, money turns into what is known as a "hygiene factor": the reward needs to be adequate up to a certain point or it will work as a demotivator, but anything past that point will work as motivator only very briefly.

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    6. Re:Real world already knows this by MrNaz · · Score: 3, Interesting

      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.
    7. Re:Real world already knows this by SerpentMage · · Score: 3, Interesting

      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"
    8. Re:Real world already knows this by Trepidity · · Score: 3, Insightful

      That seems vaguely reasonable to me, based on my experience getting people to do things. Some of the best stuff I've gotten from other people has been stuff that I've gotten on a totally "I'll do it when I get to it" basis. You get a lot of un-accounted-for work in those cases, because people aren't "really" working for you, but are thinking about your problem in the shower, or procrastinating from their "real" work by reading Google Scholar entries related to your problem, etc. Eventually, you might get back something pretty good. (Not always, of course; so you could also say it has a higher variance.)

      --
      10 PRINT CHR$(205.5+RND(1)); : GOTO 10
    9. Re:Real world already knows this by davmoo · · Score: 2, Interesting

      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.
    10. Re:Real world already knows this by Anonymous Coward · · Score: 3, Funny

      "The idea of wall street is short term quick money! You only need to look at Easy Money with Eddie Murphy to understand that."

      That's absolutely true, in fact Eddie Murphy movies make up 90% of the training required to work on Wall Street. Not a lot of people know this, but the economic crash was actually caused by following advice from Beverley Hills Cop 3.

    11. Re:Real world already knows this by Hylandr · · Score: 2, Insightful

      If I had had mod points I would have modded this flamebait.

      Cost center ? How the hell do you figure? Mystic of open source failing? Chocolate? Reality check on Isle 5 please!

      The fact that you see us as redundant means we are doing our job. Servers don't maintain or install themselves. New data projects don't complete themselves.

      If you think your going to get any real work completed with an iphone you probably have a very easy job, the kind robots will be doing soon.

      - Dan.

      --
      ~ People that think they are better than anyone else for any reason are the cause of all the strife in the world.
    12. Re:Real world already knows this by shallot · · Score: 3, Informative

      This looks like a good opportunity to recommend The Mythical Man-Month . It talks about software written forty years ago, but its lessons are still plenty applicable today :)

    13. Re:Real world already knows this by Wallace487 · · Score: 2, Interesting

      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.

    14. Re:Real world already knows this by jadavis · · Score: 2, Interesting

      Money is a good incentive when there is a direct and immediate relation between your paycheck and your output

      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.
  2. people who do less useful work earn more by azgard · · Score: 5, Interesting

    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.)

    1. Re:people who do less useful work earn more by LKM · · Score: 5, Insightful

      Similarly, in my experience, the people who end up in the highest-paying jobs are usually not the most productive or useful workers at a company, but simply the most sociopathic ones. Instead of helping others and improving the system, they optimized for their own success.

    2. Re:people who do less useful work earn more by DrHex · · Score: 2, Insightful

      So what Open Corporate Culture would promote and reward good behaviour in a realistic way?

      --
      Scientia et Potentia
    3. Re:people who do less useful work earn more by Hognoxious · · Score: 4, Insightful

      In fact, people who do less useful work in society do earn more money.

      Some people who earn a lot don't do anything useful (though what's useful is somewhat subjective anyway).

      However generalizing that to a universal law is a bit of a stretch.

      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.

      You appear to assume a person can only be motivated by one thing at a time. I'd say, at the risk of getting too technical, that's it's a load of bollocks.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    4. Re:people who do less useful work earn more by azgard · · Score: 2, Insightful

      However generalizing that to a universal law is a bit of a stretch.

      I don't think it's general law, just like Parkinson's law probably isn't. I am just (half-jokingly) giving arguments why it could be true, while I don't see good arguments for the opposite situation (except maybe the generally inborn human need for justice - see ultimatum game for instance).

      You appear to assume a person can only be motivated by one thing at a time. I'd say, at the risk of getting too technical, that's it's a load of bollocks.

      Well, at the end of the day, you have to compare the two things and determine which one is more important, or what their conversion ratio is. For example, you have to determine whether you want interesting but low paying job or less interesting but high paying job. The point is, the other party can take advantage of this in their offer. (And there are examples from Slashdot too - see e.g. game developers vs. business application developers.)

    5. Re:people who do less useful work earn more by einar2 · · Score: 4, Insightful

      In fact, --- this is just your opinion. There is a lot of work outside of your personal experience which might appear less useful to you because you have not thought about it yet. This is ok. Nobody knows about everything. The limitation of your viewpoint does not set a standard and should not let you judge other people's work.

      There are several jobs I would consider useful for society where it would be difficult to come up with "intrinsic motivation" (my opinion). For myself, I conclude that equaling the glamor of a job with its usefulness is highly flawed.

    6. Re:people who do less useful work earn more by sznupi · · Score: 2, Interesting

      Highest paying jobs might also simply make them like that.

      People are instinctively hoarders, getting & keeping what's valuable. It just so happens, as TFA claims, too many people convinced themselves that large sums of money are the most desirable loot.

      And when you have so much of precious, perhaps many more people are starting to look suspicious; a threshold for "enemy" becomes that much lower.

      --
      One that hath name thou can not otter
    7. Re:people who do less useful work earn more by rtb61 · · Score: 3, Insightful
      It is called small business, where management directly interacts with customers and management carries the full consequences for bad business decisions. Not that this stops sociopaths from being destructive in this business area as well, they simply can't do as much damage. Major restrictions in the allowed size of corporations is required to limit the harm caused by limited liabilities (share holders not liable for the debts of the companies they have part ownership of).

      For corporations, there is a validated and accurate test for detecting sociopaths (those with a genetic absence of conscience and empathy) so simple testing and exclusion is sufficient to resolve that problem. Whilst narcissists can also be damaging they generally lack the abilities to succeed outside of mass media, other than as puppets of the sociopaths who do the plotting and scheming whilst the narcissist presents the public face (think the Cheney Bush partnership).

      The rewards offered need to match the psychology of the desired work force, while still providing for an acceptable life style. Where the government provides a significant portion of important elements of a liveable society this free business from those costs ie. universal health care, free public education, welfare support for unemployment or injury, low cost quality housing, readily accessible low cost public transport. Full provision of these public services de-stresses a society as such, there is less pressure to earn more by what ever means possible, just in case you need it, this provides a more stable and honest work force.

      Greed can never be sated, in point of fact, greed is not so much driven by what they get but in what they can deny you, exclusivity, the rest of society starving and desperate whilst they wallow in excess (more than they can consume in a thousand life times).

      --
      Chaos - everything, everywhere, everywhen
    8. Re:people who do less useful work earn more by azgard · · Score: 2, Interesting

      Yes, for example, cleaning toilets is definitely useful, but I doubt there is anyone who has intrinsic motivation to do it. And it's, I gather, quite low paying job. So why do people do it at all?

      Which brings me to the 3rd reason why the correlation above is true: People who have control over other people can have _them_ do the useful work, so they don't have to work themselves.

      Those all negative responses amuse me, because I think you just don't want to face the fact it's not fair (and I agree it isn't). But I don't see any way how, in a reasonably free society, this could made fair.

    9. Re:people who do less useful work earn more by Hognoxious · · Score: 2, Insightful

      Major restrictions in the allowed size of corporations is required to limit the harm caused by limited liabilities (share holders not liable for the debts of the companies they have part ownership of).

      I got an Alan Smith - no, sorry, Adam - on line 2. Something about economies of scale.

      And you do know that limited liability companies are not necessarily large, don't you? I don't see how a hundred small or ten medium sized businesses going under is much different to one large one failing.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    10. Re:people who do less useful work earn more by Skowronek · · Score: 2, Interesting

      50% management? This would imply that, on average, every manager has almost 2 underlings (for a large company it tends to 2 - proof for the reader). The conclusion of this, from Dirichlet's principle, is that if there is a manager who manages 2 or more underlings, there is at least one manager that manages no more than 1 person. And that's terrifying.

    11. Re:people who do less useful work earn more by mvdwege · · Score: 2, Interesting

      No, sorry. You don't get to assert a thing without showing a chain of reasoning. If people are hoarders instinctively, then there is no incentive to give up things to the collective, which is a major impediment to forming a society. On the face of it, your statement contradicts the fact that homo sapiens is, provably, a social animal.

      So, care to try again, and this time with a little bit more than just simply reasserting the same opinion again?

      Mart

      --
      "I know I will be modded down for this": where's the option '-1, Asking for it'?
    12. Re:people who do less useful work earn more by azgard · · Score: 2, Insightful

      Actually, I would love if my manager would do something worthwhile 100% of his time. He would certainly be capable of that. But he has to deal with constant s**t that someone even higher decided.

      So yes, I believe he is less useful than he could be, but I don't fault him. I fault the top-down hierarchical system of direction, where the people need to fight constant battles against each other (everybody fears of those above, below and to the side of them). I would say having 50% management has little logical basis.

      Anyway, my point was more general than managers vs. other employees. Look for example how teachers or scientists are paid relative to people who do finance or sell insurance.

      P.S. Envy is not a bad thing. Look up Ultimatum game. The very mechanism that drives "irrational" behavior of actual humans could be described as envy.

    13. Re:people who do less useful work earn more by kz45 · · Score: 2, Interesting

      "However I have plenty of desire, and ability, to develop cheap and flexible robots that would be able to easily replace all toilet cleaners in the world."

      Most people that clean toilets don't just clean toilets. It's just part of their cleaning duties. The rest of the duties (cleaning the office, taking out the garbage, etc.) would probably be too difficult for a robot with our current technology.

      "government spends money on weapons, and my electronics/programming work has to be limited to entertainment industry, or I would not be able to pay for my food and shelter."

      Because the government spends it's money on weapons (which isn't the only thing the military spends its money on)..you are forced to program for the entertainment industry? wow, I don't think I've seen a post this delusional on Slashdot in awhile.

      "The problem is not with me, toilets or people's motivation, it's with society that is controlled by those who want to hurt and humiliate the poor under the guise of motivation."

      Ever hear of unions? Many unions have prevented companies from automating many jobs. Many people don't have the skills to get a better job. By keeping these positions around (and not using robots), we giving more people an opportunity to make a living.

      The problem here is your entitlement. If you really want robots to start cleaning our toilets, create a company and start selling them (or give them away). You do have the freedom to do this in the US.

    14. Re:people who do less useful work earn more by ajlisows · · Score: 4, Interesting

      I work for a smaller manufacturing company that employs maybe 350 people. I can say without a doubt that the President of the company (I'm assuming the highest paid person) earns his keep. A customer is really pissed off and wants to talk to the man in charge? No problem. He gets transferred right to the big boss. I've been in the room when he had to take a call like that and I can tell you that I was amazed at how quickly he was able to turn the Customer's mood from exceedingly belligerent to reasonably satisfied. I'm pretty sure I couldn't have done it and if I had to deal with that sort of thing on a regular basis, I would be looking for a different job. Our President does a lot of other important things throughout the day, but his willingness to be the one to take the abuse and sometimes turn it to our advantage is something that has really impressed me.

    15. Re:people who do less useful work earn more by shutdown+-p+now · · Score: 2, Interesting

      This, and most similar points of view, seem to betray an underlying assumption that your boss isn't really "working" or isn't as valuable as you are (or is not doing "useful work", to quote you).

      No, it betrays the assumption that, whatever useful work my boss is doing, it's hardly as much more useful than mine as the difference in our incomes.

  3. Apples and Oranges by sco08y · · Score: 4, Insightful

    How are the things executives do and the things open source developers do even remotely comparable?

    This whole thing is just a bunch of wankers saying how awful business people are because they get paid well.

    You know, fine, it's a standard trope at PBS. But at the same time, these wankers are saying I'm perfectly happy being underpaid. Well, fuck you very much, no I'm not, and you don't need to be pontificating on how much I should be paid. I think I can represent myself to potential clients just fine without your help, ta much.

  4. John Lewis by Kupfernigk · · Score: 2, Interesting

    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."
  5. Daniel Pink's TED talk by Kifoth · · Score: 4, Interesting
    http://www.ted.com/talks/dan_pink_on_motivation.html

    If you haven't already seen it.

    1. Re:Daniel Pink's TED talk by ZERO1ZERO · · Score: 2, Interesting
      very good..

      For some reason I've been linked to that site a lot recently, and every video there I've seen is pretty decent, insightful, and fascinating.

    2. Re:Daniel Pink's TED talk by IICV · · Score: 2, Funny

      That's because you never get linked to the bad, shallow and boring videos, obviously.

  6. The candle experiment seems bogus by trifish · · Score: 3, Insightful

    The supporting scientific evidence that they provided (the psychological experiment) seems to me to be bogus (and its results misinterpreted).

    The people who were offered money for solving the task may have been influenced in a way that made them subconsciously believe it was a difficult (perhaps even impossible) task to solve. Subconsciously, they may have been kind of PARALYZED by this very thought. Why would a psychologist offer dollars to me if this was easily solvable?

    On the other hand, the other group, which was offered no money, must have been more RELAXED, less paralyzed and more positive-thinking. Simply put, the people in this group believed it was possible to solve the task.

    Hence, in this particular context, the conclusion that money decreases motivation might be incorrect. And the biggest mistake was to generalize that conclusion and apply to any business.

    1. Re:The candle experiment seems bogus by timmarhy · · Score: 2, Interesting
      I to think the experiment is horribly flawed but not for that reason. offering more money doesn't decrease motivation at all, offering more money with NO RISK OF FAILURE is a demotivator.

      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....
    2. Re:The candle experiment seems bogus by TubeSteak · · Score: 3, Insightful

      The supporting scientific evidence that they provided (the psychological experiment) seems to me to be bogus (and its results misinterpreted).

      The people who were offered money for solving the task may have been influenced in a way that made them subconsciously believe it was a difficult (perhaps even impossible) task to solve. Subconsciously, they may have been kind of PARALYZED by this very thought. Why would a psychologist offer dollars to me if this was easily solvable?

      You're missing the point: Money + time pressure effectively neutralizes the ability of people to be creative and recontextualize the box as a support for the candle instead of a container for the tacks.

      What TFA neglects to mention is that when the same problem is presented with the tacks in a pile next to their box, almost everyone solves the problem right away, money or not.

      Psychology is fun because simple experiments can illuminate some very fundamental mental processes.

      --
      [Fuck Beta]
      o0t!
  7. Re:I think I'm getting it. by Runaway1956 · · Score: 3, Insightful

    Yeah, sort of.

    Like, I got certified as an EMT way, way back in 1980. I've never been paid a dime for performance of duties related to being an EMT. Not a cent. But, damn, it feels good to actually save someone's life. Sometimes, you even hear a word of thanks. That's cool too.

    In the world of open source, I don't really contribute much, and I certainly make no money for what I do contribute. But, again, it's a good feeling just to assist somewhere, and to hope that your input might help to create a better product.

    On the job? Yeah - I ask for raises now and then. I need more money. But, the money isn't the REASON I go to work. I like solving problems, I enjoy doing things. My biggest frustration on the job is not lack of money, but the shortsighted pennypinching fools who can't understand that sometimes spending x dollars will actually save x times y dollars over the next few months, or years, or decades.

    Of course, the very same pennypinching fools decide whether I get my raise or not. That's not a pretty picture either.

    --
    "Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
  8. More research needed by rastos1 · · Score: 5, Funny

    New studies reveal that beyond a certain threshold, large financial rewards can actually become a drag on performance in the workplace.

    I'm willing to offer myself as a test subject to verify this hypothesis.

  9. Millionaire Next Door by AnonymousClown · · Score: 2, Interesting
    The author of that book mentioned on the 60 minutes segment about his book that folks who just want the money to buy expensive shit will probably never become a millionaire. Many of the folks in the book were frugal and weren't into the luxury goods and saved money and if they had a business, plowed the money back into the business - their motivation wasn't really to get rich - getting rich was a side effect of their lifestyle.

    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

  10. Re:Money is a by-product by Culture20 · · Score: 4, Funny

    I think that money can motive even a drugged-up hippie for 15 minutes.

    Money's the way the man controls you. Open your mind to the cosmic crystal colors and realize we're not bound by pieces of paper or metal. We should work on the puzzle together; that way everyone wins.

  11. Bonus receiver's viewpoint by einar2 · · Score: 2, Interesting

    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...

    1. Re:Bonus receiver's viewpoint by sedmonds · · Score: 2, Insightful

      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.

      That is not a bonus. That is base compensation - even if the amount of the bonus isn't a fixed dollar figure. A bonus is something you are NOT entitled to.

  12. Hold bonuses in escrow for two years by SgtChaireBourne · · Score: 4, Interesting

    "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.
  13. Re:# Kumbayaa, my Lord, Kumbayaa ... by Anonymous Coward · · Score: 2, Interesting

    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.

  14. It's the KICK, stupid! by FreakAlienJobEater · · Score: 2, Interesting

    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!".

  15. Stock price is unrelated to company performance by SgtChaireBourne · · Score: 2, Insightful

    No, that is incorrect. Stock value has relatively little correlation with how a company is actually performing. Paying executives in stock, vested or not, is still giving a bonus without regard to company improvement. The only difference is will that stock pay a little or a lot, but again, to drive the point home, does not have anything to do with performance, only speculation on the stock price itself. What we need is a 180-degree turn and find a way to tie bonuses to performance.

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