The “1″ in this post’s title is simply referencing that there may be more posts similar to this one discussing other chapters…
For those of you have never heard of Dan Ariely or either of his amazingly awesome books… you need to aquaint yourself. He is an incredibly insightful professor at Duke university and his books are interesting, thought-provoking, and amazingly enjoyable to read.
The beginning of his second book discusses CEO and employee compensation packages… specifically the bonus structures of many companies.
Traditional theory might indicate that with a higher bonus at stake an individual is more likely to succeed at achieving his goal. But this is apparently not the case – at the very least it is not the entire story.
After conducting a research experiment in India where individuals could earn a “bonus” equal to either a day’s wage, a couple weeks worth of wages, or several months worth of wages, it was clear that those who stood to reap the biggest bonus performed the lowest on the challenges they were presented with (aka, guiding a marble through a maze, or remembering the sequence of colors presented).
Apparently the thought of “losing” such a substantial reward inhibited their ability to think clearly and perform at a higher level. This was not the case with mechanical actions… such as how many times you could jump in the air without taking a break. With the mechanical activities larger bonuses correlated much better with the productivity.
So the idea challenge being presented by this study was more-or-less, “should employees who are performing cognitively demanding activities be given a large bonus structure?”
I’ll let you read the book/chapter yourself and decide, but it is definitely interesting food for thought.
Dustin
Matthew 17:22,23 When they came together in Galilee, he said to them, “The Son of Man is going to be delivered into the hands of men. They will kill him, and on the third day he will be raised to life.”
