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?
- Fascination with Objective Criteria (these criteria are often subjectively made, so you don't lose the subjectivity)
- People focusing on highly visible behaviors
- Emphasis on Morality or Equity rather than efficiency
How to fix things
- Select employees who have similar goals and motivations as management (there is little evidence that this actually works)
- Train or socialize employees to have similar goals as the management (there is little evidence that this actually works)
- Change the reward system. How is this done?
- Find out what behaviors are currently being rewarded.