Traffic signal at Tamil Nadu. (c) 2011 Thamizhpparithi Maari (CC BY SA 3.0)

Incentive-Based Compensation Destroys Productivity

Forrest ChristianManaging, Organizations Leave a Comment

Wall Street Online (through Yahoo!) is reporting that the stock market has had a major affect on the main compensation method in many industries: incentives. Unless the market increases substantially, with the DJI running back up towards 12 000 or 13 000, the options that were granted for the last five years are not worth what they were optioned at, …

Leaving Yongsan Station. (c) Danleo (CC BY 2.5). Via Wikimedia Commons.

Want Clarity About Work? Start By Defining Terms

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I have decided to take the advice I gave Paul Holmström at Management Unplugged, I’m posting my answers to questions posed elsewhere. Recently, Jim Heskett of Harvard Business School asked “Why Don’t Managers Think Deeply?” If you want to see why Wilfred Brown kept talking about need to define terms like “manager”, you could do a lot worse than reading …

Pile of twenty pound notes. (c) 2011 Ltd.. (CC BY 2.0) Via flickr.

How Ed Went from $35k to $115k in an Afternoon

Forrest ChristianCareers, Organizations, Reviews - Books, Underachievers Leave a Comment

Four years ago, I posted about the difference between Closed-Sector and Open-Sector careers. It’s worth looking at again, because your choice of career will affect the choices that you have. A brief excerpt: If your first appointment in a Closed-Sector Career matters, it may be used as a proxy for capability. I may assume that you are low-capability because you …

When You Aren't Really Agreeing: The Dangers of Universal Language

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Last month, Michael Spencer posted a list of what he, as a religious person, wanted in a church. His readers, from a variety of denominations, all agreed whole-heartedly with his vision. And that’s the problem. Take a look at how using vague Universal Language (as opposed to even Universal Values) can lead to agreement where there probably isn’t any, whether in churches, companies or associations.

“Compensation plans should look more like royalty streams”

Forrest ChristianManaging, Organizations 1 Comment

From “The Wrong Incentive” by Roger Martin, Baron’s, Dec 23, 2003: How, then, should incentive compensation be structured? It should be based exclusively on features of the real market — sales, costs, investments, margins, profits. These are items over which management and employees have some control and their actions can be directly linked to such items. Compensation plans should look …

Why the Big Baboon Doesn’t Always Win

Forrest ChristianCareers, Managing, Organizations 2 Comments

Neurologist Robert Sapolsky is an interesting character. The Edge has an interesting piece by him, which seems to be fairly stream of consciousness. Sapolsky, of couse, has done some fascinating field research on baboons and lab research into the inner workings of the brain, and a little of both all the time. In the Edge pice, Sapolsky writes about what …

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Tell the World, Because They Won’t Be Able To Copy You

Forrest ChristianOrganizations, Strategy Leave a Comment

What is important to recognize now is why success, such as that achieved at Southwest, can be sustained and can not readily be imitated by competitors. There are two fundamental reasons. First, the success that comes from managing people effectively is often not as visible or transparent as to its source…. Even when they are described…, they are difficult to …