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."

Comments

Real world already knows this

[ender06]

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.

Re:Real world already knows this

[Bert64]

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.

Re:Real world already knows this

[roman_mir]

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.

Re:Real world already knows this

[Rhaban]

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.

Re:Real world already knows this

[Anonymous Coward]

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

people who do less useful work earn more

[azgard]

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.)

Re:people who do less useful work earn more

[LKM]

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.

Re:people who do less useful work earn more

[Hognoxious]

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.

Re:people who do less useful work earn more

[einar2]

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.

Re:people who do less useful work earn more

[ajlisows]

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.

Apples and Oranges

[sco08y]

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.

Daniel Pink's TED talk

[Kifoth]

http://www.ted.com/talks/dan_pink_on_motivation.html

If you haven't already seen it.

More research needed

[rastos1]

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.

Re:Money is a by-product

[Culture20]

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.

Hold bonuses in escrow for two years

[SgtChaireBourne]

"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.