Comments on: Curb Bonuses: They Don’t Work Anyway

By: stubbornmule

stubbornmule — Mon, 05 Oct 2009 23:21:46 +0000

Tarkin: while you may be right that many senior, well-paid executives may see money as an end in itself, I would not equate this to the entrepreneurial spirit, which tends not to thrive in large organisations. I would say that entrepreneurialism has a more natural home in the arena or start-ups, which may or may not be lucrative but when they are it is due to the sale of the start-up for a large sum of money rather than executive bonuses and, I suspect, that the motivations of startup entrepreneurs is very different to that of executives in large firms.

By: stubbornmule

stubbornmule — Mon, 05 Oct 2009 23:18:20 +0000

Michael Michael: the parenthetical comment can stand, given that the claim is that many of the talks are "worth a watch" rather than "jaw-dropping". Some of the design talks may not be to my taste (although I enjoyed the one about Ray and Charles Eames), and likewise I skip most of the music and art ones, preferring to stick to science, technology or economics, but there is no doubt that there is plenty there of interest. And I don't have to be a fanboy to say that.

By: Michael Michael

Michael Michael — Mon, 05 Oct 2009 10:29:32 +0000

Does your paranthetical comment just before the embedded video need to smacked upside its damn head?
http://newmatilda.com/2009/09/10/just-how-wanky-are-ted-lectures

By: Tarkin

Tarkin — Sun, 04 Oct 2009 23:25:29 +0000

I wonder if some of the reason why bonuses are considered important by higher ups is that they have more of the entrepreneurial spirit. i.e. they see money/success as the ultimate goal. Whereas most of us work to earn a living to go and do the things we want. So while money is a means, it is more abstracted from our direct wants. Not to mention that unless we are goofing around we see the bonus as being part of our pay that we deserve.

By: James

James — Sat, 03 Oct 2009 03:17:38 +0000

I always thought a more effective incentive would be to say “your salary is $X but we will withhold 50% of it till the end of the year and you’ll only get paid if you perform”.

Why wouldn’t it work? Because people would see it as *their* money being withheld rather than, literally, a bonus. But it still might be a better incentive.

By: derrida derider

derrida derider — Tue, 29 Sep 2009 03:53:35 +0000

Y’know, mainstream economists get a lot of flak as being servants of the haves rather than the have-nots. It’s flak that is often deserved.

But organisational economists have actually looked at this issue for several decades now – and surprise, surprise, come to the same conclusion as Dan Pink. If you don’t believe me, google “theory of incomplete contracts”.

Of course this quite well established mainstream finding gets exactly no press in the business community precisely because it is the “wrong” result for the haves – like the finding that most takeovers destroy shareholder value for the acquirer. Had the findings been otherwise, of course, they’d have been shouted from the rooftops.

By: Baumey

Baumey — Tue, 29 Sep 2009 00:58:14 +0000

I think the issue is rationing of available talent. Maybe some create an artificial shortage to bid the pool up, but when it comes to traders you pay them or you lose them – not much capital is required to set up a good day trader or “hedge fund”. Whilst it may be hard to draw a causal link between executive performance and bonuses, it is relatively easy to reward traders based on results. So I say pay traders more.