On the Folly of Rewarding A

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  • In politics it is often rational for people not to be specific with plans because the more specific you are, the less likely you are able to get 50% of the vote.
  • In the Vietnam war, there was no reward for doing a good job (no end to the war), and thus there were more mutinies than during WWII.
  • Doctors have an incentive to tell people they are more sick than they really are.
  • In general business situations, the individual short term accomplishments are rewarded more than long term team accomplishments.

Why do these preverse inventives come to be?

  1. Fascination with Objective Criteria (these criteria are often subjectively made, so you don't lose the subjectivity)
  2. People focusing on highly visible behaviors
  3. Hypocrisy
  4. Emphasis on Morality or Equity rather than efficiency

How to fix things

  1. Select employees who have similar goals and motivations as management (there is little evidence that this actually works)
  2. Train or socialize employees to have similar goals as the management (there is little evidence that this actually works)
  3. Change the reward system. How is this done?
    1. Find out what behaviors are currently being rewarded.