Incentive Earnings Quotes

Never automate something that can be eliminated, and never delegate something that can be automated or streamlined. Otherwise, you waste someone else's time instead of your own, which now wastes your hard-earned cash. How's that for incentive to be effective and efficient?

You seek escape from pain. We seek the achievement of happiness. You exist for the sake of avoiding punishment. We exist for the sake of earning rewards. Threats will not make us function; fear is not our incentive. It is not death that we wish to avoid, but life that we wish to live

I have a very simple rule when it comes to management: hire the best people from your competitors, pay them more than they were earning, and give them bonuses and incentives based on their performance. That’s how you build a first-class operation.

The more government takes in taxes, the less incentive people have to work. What coal miner or assembly-line worker jumps at the offer of overtime when he knows Uncle Sam is going to take sixty percent or more of his extra pay? . . . Any system that penalizes success and accomplishment is wrong. Any system that discourages work, discourages productivity, discourages economic progress, is wrong. If, on the other hand, you reduce tax rates and allow people to spend or save more of what they earn, they’ll be more industrious; they’ll have more incentive to work hard, and money they earn will add fuel to the great economic machine that energizes our national progress. The result: more prosperity for all—and more revenue for government.4

Due to my self-employment, I had to report my income every few months. Earning $50 extra could make my co-pay at day care go up by the same amount. Sometimes it meant losing my childcare grant altogether. There was no incentive or opportunity to save money. The system kept me locked down, scraping the bottom of the barrel, without a plan to climb out of it.

But as incentives go, commissions are tricky. First of all, a 6 percent real-estate commission is typically split between the seller’s agent and the buyer’s. Each agent then kicks back roughly half of her take to the agency. Which means that only 1.5 percent of the purchase price goes directly into your agent’s pocket. So on the sale of your $300,000 house, her personal take of the $18,000 commission is $4,500. Still not bad, you say. But what if the house was actually worth more than $300,000? What if, with a little more effort and patience and a few more newspaper ads, she could have sold it for $310,000? After the commission, that puts an additional $9,400 in your pocket. But the agent’s additional share—her personal 1.5 percent of the extra $10,000—is a mere $150. If you earn $9,400 while she earns only $150, maybe your incentives aren’t aligned after all.

The satisfaction earned by the striving can be whatever furnishes the strongest incentive to the child, for example, extra pleasures or possessions for a sensing child, special freedoms or opportunities for an intuitive, new dignity or authority for a thinker, and more praise or companionship for a feeling type.

None the less he allowed “triumphal ornaments”—an embroidered robe, a statue, a chaplet, and so on—to be awarded to those who would otherwise have earned a triumph; this should be a sufficient incentive to any good soldier to fight a necessary war.

Most peasants did not miss the school. "What's the point?" they would say. "You pay fees and read for years, and in the end you are still a peasant, earning your food with your sweat. You don't get a grain of rice more for being able to read books. Why waste time and money? Might as well start earning your work points right away." The virtual absence of any chance of a better future and the near total immobility for anyone born a peasant took the incentive out of the pursuit of knowledge. Children of school age would stay at home to help their families with their work or look after younger brothers and sisters. They would be out in the fields when they were barely in their teens. As for girls, the peasants considered it a complete waste of time for them to go to school. "They get married and belong to other people. It's like pouring water on the ground." The Cultural Revolution was trumpeted as having brought education to the peasants through 'evening classes." One day my production team announced it was starting evening classes and asked Nana and me to be the teachers. I was delighted. However, as soon as the first 'class' began, I realized that this was no education. The classes invariably started with Nana and me being asked by the production team leader to read out articles by Mao or other items from the People's Daily. Then he would make an hour-long speech consisting of all the latest political jargon strung together in undigested and largely unintelligible hunks. Now and then he would give special orders, all solemnly delivered in the name of Mao.

In the United States I saw how the market liberates the individual and allows people to be free to make personal choices. But the biggest drawback was that the market always pushes things to the side of the powerful. I thought the poor should be able to take advantage of the system in order to improve their lot. Grameen is a private-sector self-help bank, and as its members gain personal wealth they acquire water-pumps, latrines, housing, education, access to health care, and so on. Another way to achieve this is to let abusiness earn profit that is then txed by the government, and the tax can be used to provide services to the poor. But in practice it never works that way. In real life, taxes only pay for a government bureaucracy that collects the tax and provides little or nothing to the poor. And since most government bureaucracies are not profit motivated, they have little incentive to increase their efficiency. In fact, they have a disincentive: governments often cannot cut social services without a public outcry, so the behemoth continues, blind and inefficient, year after year.

In some circumstances, a focus on extrinsic rewards (money) can actually diminish effort. Most (or at least many) teachers enter their profession not because of the money but because of their love for children and their dedication to teaching. The best teachers could have earned far higher incomes if they had gone to banking. It is almost insulting to assume that they are not doing what they can to help their students learn, and that by paying them an extra $500 or $1,500, they would exert greater effort. Indeed, incentive pay can be corrosive: it reminds teachers of how bad their pay is, and those who are led thereby to focus on money may be induced to find a better paying job, leaving behind only those for whom teaching is the only alternative. (Of course, if teachers perceive themselves to be badly paid, that will undermine morale, and that will have adverse incentive effects)

Private prison builders and prison service companies have spent millions of dollars to persuade state and local governments to create new crimes, impose harsher sentences, and keep more people locked up so that they can earn more profits. Private profit has corrupted incentives to improve public safety, reduce the costs of mass incarceration, and most significantly, promote rehabilitation of the incarcerated.

Finally, we spend lots of money. Spending on jails and prisons by state and federal governments has risen from $6.9 billion in 1980 to nearly $80 billion today. Private prison builders and prison service companies have spent millions of dollars to persuade state and local governments to create new crimes, impose harsher sentences, and keep more people locked up so that they can earn more profits. Private profit has corrupted incentives to improve public safety, reduce the costs of mass incarceration, and most significantly, promote rehabilitation of the incarcerated.

I told him about my unsuccessful job hunting. He said it was all part of the pattern of economics - economic injustice. 'You take a young white boy. He can go though school and college with a real incentive. He knows he can make good money in any profession when he gets out. But can a Negro - in the South? No, I've seen many make brilliant grades in college. And yet when they come home in the summers to earn a little money, they have to do the most menial work. And even when they graduate it's a long hard pull. Most take postal jobs, or preaching or teaching jobs. This is the cream. What about the others , Mr. Griffin? A man knows no matter how hard he works , he's never going to quite manage...taxes and prices eat up more than he can earn. He can't see how he'll ever have a wife and children. The economic structure just doesn't permit it unless he's prepared to live down in poverty and have his wife work too. That's part of it. Our people aren't educated because they can't afford it or else they know education won't earn them the jobs it would a white men.

Any system that penalizes success and accomplishment is wrong. Any system that discourages work, discourages productivity, discourages economic progress, is wrong. If, on the other hand, you reduce tax rates and allow people to spend or save more of what they earn, they’ll be more industrious; they’ll have more incentive to work hard, and money they earn will add fuel to the great economic machine that energizes our national progress. The result: more prosperity for all—and more revenue for government. A few economists call this principle supply-side economics. I just call it common sense.

This sense of entitlement contributes mightily to sloppiness, to low incentive, to boredom, to bad choices, to instant gratification, to constant demands for more, and to all kinds of addictions (including the addiction to technology).

Societies that robbed humans of what they had rightfully earned by the sweat of their brows paid a steep price for this theft. They destroyed the individual’s incentive to work, undermined the general prosperity, and thereby doomed themselves to poverty and famine.

A more recent concern relates to “financialization” and associated short-termism. Financialization is the growing importance of norms, metrics, and incentives from the financial sector to the wider economy. Some of the concerns expressed are that, for example, managers are increasingly awarded stock options to align their incentives with those of shareholders; companies are often explicitly managed to increase short-term shareholder value; and financial engineering, such as share buybacks and earnings management, has become a more important part of senior managers’ jobs. The end result is that rather than finance serving business, business serves finance: the tail wags the dog. What John Kay described as “obliquity,” the idea that making money was a consequence of, or a second-order benefit of, serving one’s customers and building good businesses, is driven out (Kay 2010).

In their famous Critique of the Gotha Programme Marx and Engels speak about two phases of communism, the lower and the higher. In the lower one there still prevails the "narrow horizon of bourgeois rights" with its inequality and its wide differentials in individual incomes. Obviously, if in socialism society, according to Marx, still needs to secure the full development of its productive forces until a real economy of wealth and abundance is created, then it has to reward skill and offer incentives. The bureaucrat is in a sense the skilled worker, and there is no doubt that he will place himself on the privileged side of the scale... In practice it proved impossible to establish and maintain the principle proclaimed by the Commune of Paris which served Marx as the guarantee against the rise of bureaucracy, the principle extolled again by Lenin on the eve of October, according to which the functionary should not earn more than the ordinary worker's wage. This principle implied a truly egalitarian society -- and here is part of an important contradiction in the thought of Marx and his disciples. Evidently the argument that no civil servant, no matter how high his function, must earn more than an ordinary worker cannot be reconciled with the other argument that in the lower phase of socialism, which still bears the stamp of "bourgeois rights," it would be utopian to expect "equality of distribution.

(i) Social benefits. When we first started writing about higher education, we had a good deal of sympathy for the first justification. We no longer do. In the interim we have tried to induce the people who make this argument to be specific about the alleged social benefits. The answer is almost always simply bad economics. We are told that the nation benefits by having more highly skilled and trained people, that investment in providing such skills is essential for economic growth, that more trained people raise the productivity of the rest of us. These statements are correct. But none is a valid reason for subsidizing higher education. Each statement would be equally correct if made about physical capital (i.e., machines, factory buildings, etc.), yet hardly anyone would conclude that tax money should be used to subsidize the capital investment of General Motors or General Electric. If higher education improves the economic productivity of individuals, they can capture that improvement through higher earnings, so they have a private incentive to get the training. Adam Smith's invisible hand makes their private interest serve the social interest. It is against the social interest to change their private interest by subsidizing schooling. The extra students—those who will only go to college if it is subsidized—are precisely the ones who judge that the benefits they receive are less than the costs. Otherwise they would be willing to pay the costs themselves.

Ever since the 1960s, upon the urging of Dr. T. Berry Brazelton and the all-knowing Dr. Spock,* mothers have been encouraged to read to their children at a very early age. For toddlers and preschoolers who relish this early diet of literacy, libraries become a second home, story hour is never long enough, and parents can’t finish a book without hearing a little voice beg, “Again… again.” For most literary geek girls, it’s at this age that they discover their passion for reading. Whether it’s Harold and the Purple Crayon or Strega Nona, books provide the budding literary she-geek with a glimpse into an all-new world of magic and make-believe—and once she visits, she immediately wants to apply for full-time citizenship. “We tell ourselves stories in order to live.” —author Joan Didion, in The White Album While some children spend their summers sweating on community sports teams or learning Indigo Girls songs at sleep-away camp, our beloved bookworms are more interested in joining their local library’s summer reading program, completing twenty-five books during vacation, and earning a certificate of recognition signed by their city’s mayor. (Plus, that Sony Bloggie Touch the library is giving away to the person who logs the most hours reading isn’t the worst incentive, either. It’ll come in handy for that book review YouTube channel she’s been thinking about starting!) When school starts back up again, her friends will inevitably show off their tan lines and pony bead friendship bracelets, and our geek girl will politely oblige by oohing and aahing accordingly. But secretly she’s bursting with pride over her summer’s battle scars—the numerous paper cuts she got while feverishly turning the pages of all seven Harry Potter books.

1. The conglomerate movement, “with all its fancy rhetoric about synergism and leverage.” 2. Accountants who played footsie with stock-promoting managements by certifying earnings that weren’t earnings at all. 3. “Modern” corporate treasurers who looked upon their company pension funds as new-found profit centers and pressured their investment advisers into speculating with them. 4. Investment advisers who massacred clients’ portfolios because they were trying to make good on the over-promises that they had made to attract the business. 5. The new breed of investment managers who bought and churned the worst collection of new issues and other junk in history, and the underwriters who made fortunes bringing them out. 6. Elements of the financial press which promoted into new investment geniuses a group of neophytes who didn’t even have the first requisite for managing other people’s money—namely, a sense of responsibility. 7. The securities salesmen who peddle the items with the best stories—or the biggest markups—even though such issues were totally unsuited to the customers’ needs. 8. The sanctimonious partners of major investment houses who wrung their hands over all these shameless happenings while they deployed an army of untrained salesmen to forage among even less trained investors. 9. Mutual fund managers who tried to become millionaires overnight by using every gimmick imaginable to manufacture their own paper performance. 10. Portfolio managers who collected bonanza incentives of the “heads I win, tails you lose” kind, which made them fortunes in the bull market but turned the portfolios they managed into disasters in the bear market. 11. Security analysts who forgot about their professional ethics to become storytellers and let their institutions be taken in by a whole parade of confidence men. This was the “list of horrors that people in our field did to set the stage for the greatest blood bath in forty years,

Supply-side economists argue that because lower tax rates allow everyone in the private sector to keep more of what they earn, tax relief provides citizens with strong incentives to work longer hours (thus increasing labor), to save and invest more of their income (thus increasing capital), and to devote more attention to innovation of all kinds (thus increasing efficiency, or TFP).

if, like Charles Silberman, we think school “should prepare people not just to earn a living but to live a life—a creative, humane, and sensitive life,”22 then children’s attitudes toward learning are at least as important as how well they perform at any given task.

Daisy has a unique spirit,” Westcliff said. “A warm and romantic nature. If she is forced into a loveless marriage, she will be devastated. She deserves a husband who will cherish her for everything she is, and who will protect her from the harsher realities of the world. A husband who will allow her to dream.” It was surprising to hear such sentiment from Westcliff, who was universally known as a pragmatic and level-headed man. “What is your question, my lord?” Matthew asked. “Will you give me your word that you will not marry my sister-in-law?” Matthew held the earl’s cold black gaze. It would not be wise to cross a man like Westcliff, who was not accustomed to being denied. But Matthew had endured years of Thomas Bowman’s thunder and bluster, standing up to him when other men would flee in fear of his wrath. Although Bowman could be a ruthless, sarcastic bully there was nothing he respected more than a man who was willing to go toe-to-toe with him. And so it had quickly become Matthew’s lot in the company to be the bearer of bad tidings and deliver the hard truths that everyone else was afraid to give him. That had been Matthew’s training, which was why Westcliff’s attempt at domination had no effect on him. “I’m afraid not, my lord,” Matthew said politely. Simon Hunt dropped his cigar. “You won’t give me your word?” Westcliff asked in disbelief. “No.” Matthew bent swiftly to retrieve the fallen cigar and returned it to Hunt, who regarded him with a glint of warning in his eyes as if he were silently trying to prevent him from jumping off a cliff. “Why not?” Westcliff demanded. “Because you don’t want to lose your position with Bowman?” “No, he can’t afford to lose me right now.” Matthew smiled slightly in an attempt to rob the words of arrogance. “I know more about production, administration, and marketing than anyone else at Bowman’s…and I’ve earned the old man’s trust. So I won’t be dismissed even if I refuse to marry his daughter.” “Then it will be quite simple for you to put the entire matter to rest,” the earl said. “I want your word, Swift. Now.” A lesser man would have been intimidated by Westcliff’s authoritative demand. “I might consider it,” Matthew countered coolly, “if you offered the right incentive. For example, if you promise to endorse me as the head of the entire division and guarantee the position for at least, say…three years.” Westcliff gave him an incredulous glance. The tense silence was broken as Simon Hunt roared with laughter. “By God, he has brass ballocks,” he exclaimed. “Mark my words, Westcliff, I’m going to hire him for Consolidated.” “I’m not cheap,” Matthew said, which caused Hunt to laugh so hard that he nearly dropped his cigar again. Even Westcliff smiled, albeit reluctantly. “Damn it,” he muttered. “I’m not going to endorse you so readily—not with so much at stake. Not until I am convinced you’re the right man for the position.” “Then it seems we’re at an impasse.” Matthew made his expression friendly. “For now.

But the current investment banking model—whether applied in a standalone institution such as Goldman or in a broad financial conglomerate such as Deutsche Bank—is at the heart of the problems the finance sector poses for the real economy. Investment banks today engage in securities issuance, corporate advice and asset management; they make markets in equities and FICC, and trade in these markets on their own account. It is only necessary to list these functions to see that each of these activities conflicts with all the others. Each should be undertaken in distinct institutions. And with lower volumes of inter-bank trading, a diminished role for public equity markets and much more direct investment by asset managers the scale of most of these activities should be much reduced. Among all the actors in the finance sector today, only the asset manager, who typically earns a fee calculated as a percentage of funds under management, is rewarded for idleness. The profits of a segregated deposit-taking bank would similarly depend primarily on the scale of the deposit base, and secondarily on its success in making good loans. Dedicated channels of capital allocation have a more appropriate incentive structure than activities focused on trading and transactions. Whenever

Over the past thirty years the orthodox view that the maximisation of shareholder value would lead to the strongest economic performance has come to dominate business theory and practice, in the US and UK in particular.42 But for most of capitalism’s history, and in many other countries, firms have not been organised primarily as vehicles for the short-term profit maximisation of footloose shareholders and the remuneration of their senior executives. Companies in Germany, Scandinavia and Japan, for example, are structured both in company law and corporate culture as institutions accountable to a wider set of stakeholders, including their employees, with long-term production and profitability their primary mission. They are equally capitalist, but their behaviour is different. Firms with this kind of model typically invest more in innovation than their counterparts focused on short-term shareholder value maximisation; their executives are paid smaller multiples of their average employees’ salaries; they tend to retain for investment a greater share of earnings relative to the payment of dividends; and their shares are held on average for longer by their owners. And the evidence suggests that while their short-term profitability may (in some cases) be lower, over the long term they tend to generate stronger growth.43 For public policy, this makes attention to corporate ownership, governance and managerial incentive structures a crucial field for the improvement of economic performance. In short, markets are not idealised abstractions, but concrete and differentiated outcomes arising from different circumstances.

Always make a counteroffer. You can’t get anywhere without a counter. Remind clients there is always a cost for time. Time is expensive. You can’t predict the market. You can’t assume there is always a better offer. Can the parties involved split the difference? Can you as the salesperson offer an additional incentive? Can you lower your commission? Pay for a cost associated with the deal yourself? Remember, $10 is better than $0!

We can prospect for new clients for 30 minutes, send follow-up, follow-through, and follow-back emails and texts for another 30 minutes, and strategize with our manager on an incentive-of-the-day to offer to customers if they buy TODAY. Trolling Facebook for an hour is only OK if you’re finding clients. Serhant Secret #18 No customers in front of you?

Buybacks: How the Game Works Imagine a company – let’s call it FinEng Corp – with sales of $1 billion and a 5 per cent profit margin. The $50 million of profits are taxed at a 30 per cent rate. The company has 500 million shares outstanding and shareholders’ equity of $500 million. The shares trade at 15 times earnings. The corporate incentive plan provides senior executives with 50 million stock options, which strike at the current market price. At this point, FinEng has no

An illustration of a diffuser incentive is that paid to vasectomy canvassers in India (described in Chapter 9). These canvassers had each had the vasectomy operation themselves, and then earned a small incentive by convincing other men like themselves to adopt.

She looked out the taxi window at the picturesque Creole cottages and brick Spanish Colonial houses on the way back to the bakery. Piper could understand why New Orleans was an attractive location for filming. The culturally rich neighborhoods and diverse locations, from bayou to big city, provided vivid backdrops. There were willing extras of all shapes, sizes, and ethnicities available, as well as state-of-the-art sound stages and plenty of skilled crew members. Piper also knew that Louisiana offered attractive tax incentives to the film industry to bring in business to New Orleans. The city was working hard to earn the moniker "Hollywood of the South.

Finding the Competitive Levers When there’s a battle between two networks, there are competitive levers that shift users from one into the other—what are they? The best place to focus in the rideshare market was the hard side of the network: drivers. More drivers meant that prices would be lower, attracting valuable high-frequency riders that often comparison shop for fares. Attract more riders, and it more efficiently fills the time of drivers, and vice versa. There was a double benefit to moving drivers from a competitor’s network to yours—it would push their network into surging prices while yours would lower in price. Uber’s competitive levers would combine financial incentives—paying up for more sign-ups, more hours—with product improvements to improve Acquisition, Engagement, and Economic forces. Drawing in more drivers through product improvements is straightforward—the better the experience of picking up riders and routing the car to their destination, the more the app would be used. Building a better product is one of the classic levers in the tech industry, but Uber focused much of its effort on targeted bonuses for drivers. Why bonuses? Because for drivers, that was their primary motivation for using the app, and improving their earnings would make them sticky. But these bonuses weren’t just any bonuses—they were targeted at quickly flipping over the most valuable drivers in the networks of Uber’s rivals, targeting so-called dual apping drivers that were active on multiple networks. They were given large, special bonuses that compelled them to stick to Uber, and every hour they drove was an hour that the other networks couldn’t utilize. There was a sophisticated effort to tag drivers as dual appers. Some of these efforts were just manual—Uber employees who took trips would just ask if the drivers drove for other services, and they could mark them manually in a special UI within the app. There were also behavioral signals when drivers were running two apps—they would often pause their Uber session for a few minutes while they drove for another company, then unpause it. On Android, there were direct APIs that could tell if someone was running Uber and Lyft at the same time. Eventually a large number of these signals were fed into a machine learning model where each driver would receive a score based on how likely they were to be a dual apper. It didn’t have to be perfect, just good enough to aid the targeting.

Overcrowding works in a different way for creators than for viewers. For creators, the problem becomes—how do you stand out? How do you get your videos watched? This is particularly acute for new creators, who face a “rich get richer” phenomenon. Across many categories of networked products, when early users join a network and start producing value, algorithms naturally reward them—and this is a good thing. When they do a good job, perhaps they earn five-star ratings, or they quickly gain lots of followers. Perhaps they get featured, or are ranked highly in popularity lists. This helps consumers find what they want, quickly, but the downside is that the already popular just get more popular. Eventually, the problem becomes, how does a new member of the network break in? If everyone else has millions of followers, or thousands of five-star reviews, it can be hard. Eugene Wei, former CTO of Hulu and noted product thinker, writes about the “Old Money” in the context of social networks, arguing that established networks are harder for new users to break into: Some networks reward those who gain a lot of followers early on with so much added exposure that they continue to gain more followers than other users, regardless of whether they’ve earned it through the quality of their posts. One hypothesis on why social networks tend to lose heat at scale is that this type of old money can’t be cleared out, and new money loses the incentive to play the game. It’s not that the existence of old money or old social capital dooms a social network to inevitable stagnation, but a social network should continue to prioritize distribution for the best content, whatever the definition of quality, regardless of the vintage of user producing it. Otherwise a form of social capital inequality sets in, and in the virtual world, where exit costs are much lower than in the real world, new users can easily leave for a new network where their work is more properly rewarded and where status mobility is higher.75 This is true for social networks and also true for marketplaces, app stores, and other networked products as well. Ratings systems, reviews, followers, advertising systems all reinforce this, giving the most established members of a network dominance over everyone else. High-quality users hogging all of the attention is the good version of the problem, but the bad version is much more problematic: What happens, particularly for social products, when the most controversial and opinionated users are rewarded with positive feedback loops? Or when purveyors of low-quality apps in a developer platform—like the Apple AppStore’s initial proliferation of fart apps—are downloaded by users and ranked highly in charts? Ultimately, these loops need to be broken; otherwise your network may go in a direction you don’t want.

Michael Sandel has raised concerns about these very effects, arguing that cash payments can crowd out intrinsic motivations and the values that underpin them. He points, as an example, to the Earning by Learning programme, set up in low-achieving primary schools in Dallas, Texas, which paid six-year-old children $2 for every book that they read. Researchers found that the children’s literacy skills improved over the year, but what effect might such payments have on their longer-term motivation to learn? ‘The market is an instrument, but not an innocent one,’ Sandel remarks. ‘The obvious worry is that the payment may habituate children to think of reading books as a way of making money, and so erode, or crowd out, or corrupt the love of reading for its own sake.’51 Despite such concerns, financial incentives are increasingly being introduced in social realms, bringing our market identities—as consumers, customers, service providers and workers—to the forefront of our attention.

we need simply look at how capitalism changed after the idea of shareholder supremacy took over—which only happened in the final decades of the twentieth century. Prior to the introduction of the shareholder primacy theory, the way business operated in the United States looked quite different. “By the middle of the 20th century,” said Cornell corporate law professor Lynn Stout in the documentary series Explained, “the American public corporation was proving itself one of the most effective and powerful and beneficial organizations in the world.” Companies of that era allowed for average Americans, not just the wealthiest, to share in the investment opportunities and enjoy good returns. Most important, “executives and directors viewed themselves as stewards or trustees of great public institutions that were supposed to serve not just the shareholders, but also bondholders, suppliers, employees and the community.” It was only after Friedman’s 1970 article that executives and directors started to see themselves as responsible to their “owners,” the shareholders, and not stewards of something bigger. The more that idea took hold in the 1980s and ’90s, the more incentive structures inside public companies and banks themselves became excessively focused on shorter-and-shorter-term gains to the benefit of fewer and fewer people. It’s during this time that the annual round of mass layoffs to meet arbitrary projections became an accepted and common strategy for the first time. Prior to the 1980s, such a practice simply didn’t exist. It was common for people to work a practical lifetime for one company. The company took care of them and they took care of the company. Trust, pride and loyalty flowed in both directions. And at the end of their careers these long-time employees would get their proverbial gold watch. I don’t think getting a gold watch is even a thing anymore. These days, we either leave or are asked to leave long before we would ever earn one.

People from different generations, raised by different parents who earned different incomes and held different values, in different parts of the world, born into different economies, experiencing different job markets with different incentives and different degress of luck, learn very different lessons.

In combat deployment (where he earned a Silver Star for bravery and two Purple Hearts), Smith gained the central insight that would power Federal Express from an idea into a viable business, from a business into a great company. Like Manchester, he realized that people will do unreasonable things to come through—not for grand ideas or incentives or bosses or hierarchies or even recognition, but for each other.

People from different generations, raised by different parents who earned different incomes and held different values, in different parts of the world, born into different economies, experiencing different job markets with different incentives and different degrees of luck, learn very different lessons.

The traditional defense of class stratification and the existence of a "leisure class", ever since the rise of civilization, from both Plato and Aristotle as well as from more recent social thinkers, is that a leisure class is needed in order to have the time and energy for the specialized intellectual development and technological skills that are necessary preconditions for civilization; and "leisure class" has always meant a group with a guaranteed income — i.e. those who did not have to work for a living. Implicit in this argument is the assumption (which I happen to think is correct, as I think the history and development of civilization proves) that when people are freed from the necessity to work — that is, when work is freely chosen rather than slavery or wage-slavery (i.e. "work or starve"), they do not just vegetate in a state of "passivity and dependency." Rather, they engage in much more creative work. Coercion creates an incentive for "passive aggressiveness," because when overpowered and helpless there is no other way to express the minimal degree of autonomy that people need in order to maintain any semblance of self-esteem, dignity, and pride. Furthermore, when work is a means to and end — working in order to eat — then it is, in Marx's terms, "alienated" labor. Labor can only be liberated from alienation when work is an end in itself, entered into freely as the expression of spontaneous and voluntary creativity, curiosity, playfulness, initiative, and sociability — that is, the sense of solidarity with the community, the fulfillment of one's true and "essential" human nature as "social" and "political" animals, to be fulfilled and made human by their full participation in a culture. In short, the contradiction in the old defense of class stratification is that it defends leisure for the leisure class, but not for the underclass. With reference to the underclass, leisure is said to destroy the incentive to work, leads to slothfulness and self-indulgence, and retards cognitive and moral development. When applied to the leisure class, the concept evokes an image of Plato and Aristotle, whose leisure was based on slave labor, creating the intellectual foundations of Western civilization; or patrician slave-owners like Washington and Jefferson laying the foundations of American civilization; or creative aristocrats like Count Leo Tolstoy or Bertrand Ear Russell; or, even closer to home, of our own sons and daughters (or of ourselves, when we were young adults) being freed from the stultifying tasks of earning a living until well into our adult years so that we could study in expensive universities to gain specialized knowledge and skills.

Bureaucrats work for government, and government faces no competition. People who work at the post office - as kind and thoughtful as they may be - have less incentive than do workers at the local grocery store to be concerned with customers having a good experience and coming back. If the post office cannot earn enough money from customers who use its service (as it hasn’t for more than the last decade), it can turn to the federal government for increased funding. The government, in turn, will coerce the funding from taxpayers. By contrast, a grocery store would just go out of business to be replaced with one that served its customers better.

What’s fascinating is that most guards in the Stanford Prison Experiment remained hesitant to apply ‘tough’ tactics at all, even under mounting pressure. Two-thirds refused to take part in the sadistic games. One-third treated the prisoners with kindness, to Zimbardo and his team’s frustration. One of the guards resigned the Sunday before the experiment started, saying he couldn’t go along with the instructions. Most of the subjects stuck it out because Zimbardo paid well. They earned $15 a day–equivalent to about $100 now–but didn’t get the money until afterwards. Guards and prisoners alike feared that if they didn’t play along in Zimbardo’s dramatic production, they wouldn’t get paid. But money was not enough incentive for one prisoner, who got so fed up after the first day that he wanted to quit. This was prisoner number 8612, twenty-two-year-old Douglas Korpi, who broke down on day two (‘I mean, Jesus Christ […] I just can’t take it anymore!’21). His breakdown would feature in all the documentaries and become the most famous recording from the whole Stanford Prison Experiment. A journalist looked him up in the summer of 2017.22 Korpi told him the breakdown had been faked–play-acted from start to finish. Not that he’d ever made a secret of this. In fact, he told several people after the experiment ended: Zimbardo, for example, who ignored him, and a documentary filmmaker, who edited it out of his movie.

Mental health is an enormous business; in the United States, more money is spent on mental health conditions than any other medical specialty, with an estimated $201 billion spent in 2013 alone and an estimated increase to $280 billion by 2020 (Substance Abuse and Mental Health Services Administration, 2014). More than half of the budget for the American Psychiatric Association is income received directly from pharmaceutical companies, and drug-makers are the most frequent and largest donors of mental health advocacy groups (see, e.g., Harris, 2009). Speaking and consulting gigs for the pharmaceutical industry can earn psychiatrists up to $1 million or more in direct fees per year,4 and at least 70% of the professionals making up the task force for the DSM were tied to pharmaceutical companies (Cosgrove & Krimsky, 2012), raising concerns about corporate interests reflected in practice and policy and accusations of disease mongering (Moynihan, Heath, & Henry, 2002). The incentive for ensuring the medical and biological framework for conceptualizing problems in living is huge.

Here’s the thing: People from different generations, raised by different parents who earned different incomes and held different values, in different parts of the world, born into different economies, experiencing different job markets with different incentives and different degrees of luck, learn very different lessons.

You seek escape from pain. We seek the achievement of happiness. You exist for the sake of avoiding punishment. We exist for the sake of earning rewards. Threats will not make us function; fear is not our incentive. It is not death that we wish to avoid, but life that we wish to live. “You, who have lost the concept of the difference, you who claim that fear and joy are incentives of equal power—and secretly add that fear is the more ‘practical’—you do not wish to live, and only fear of death still holds you to the existence you have damned. You dart in panic through the trap of your days, looking for the exit you have closed, running from a pursuer you dare not name to a terror you dare not acknowledge, and the greater your terror the greater your dread of the only act that could save you: thinking. The purpose of your struggle is not to know, not to grasp or name or hear the thing I shall now state to your hearing: that yours is the Morality of Death.

Three American business school professors decided to find out. In a first-of-its-kind study, they analyzed more than 26,000 earnings calls from more than 2,100 public companies over six and a half years using linguistic algorithms similar to the ones employed in the Twitter study. They examined whether the time of day influenced the emotional tenor of these critical conversations—and, as a consequence, perhaps even the price of the company’s stock. Calls held first thing in the morning turned out to be reasonably upbeat and positive. But as the day progressed, the “tone grew more negative and less resolute.” Around lunchtime, mood rebounded slightly, probably because call participants recharged their mental and emotional batteries, the professors conjectured. But in the afternoon, negativity deepened again, with mood recovering only after the market’s closing bell. Moreover, this pattern held “even after controlling for factors such as industry norms, financial distress, growth opportunities, and the news that companies were reporting.”8 In other words, even when the researchers factored in economic news (a slowdown in China that hindered a company’s exports) or firm fundamentals (a company that reported abysmal quarterly earnings), afternoon calls “were more negative, irritable, and combative” than morning calls.9 Perhaps more important, especially for investors, the time of the call and the subsequent mood it engendered influenced companies’ stock prices. Shares declined in response to negative tone—again, even after adjusting for actual good news or bad news—“leading to temporary stock mispricing for firms hosting earnings calls later in the day.” While the share prices eventually righted themselves, these results are remarkable. As the researchers note, “call participants represent the near embodiment of the idealized homo economicus.” Both the analysts and the executives know the stakes. It’s not merely the people on the call who are listening. It’s the entire market. The wrong word, a clumsy answer, or an unconvincing response can send a stock’s price spiraling downward, imperiling the company’s prospects and the executives’ paychecks. These hardheaded businesspeople have every incentive to act rationally, and I’m sure they believe they do. But economic rationality is no match for a biological clock forged during a few million years of evolution. Even “sophisticated economic agents acting in real and highly incentivized settings are influenced by diurnal rhythms in the performance of their professional duties.

If we work in environments that make it harder to earn these incentives, then our desire to help our colleagues or the organization diminishes. And, absent the presence of commitment, any desire our colleagues may have to help us also declines.

It was the difference, in other words, between a cobbler being paid to repair a shoe (a project that has a defined endpoint and a clear way to measure success) and a factory worker being compensated by the hour for performing tasks that theoretically could be repeated indefinitely. The latter creates financial incentives for people to keep working for as long as they can bear it, in order to earn more money.

Never automate something that can be eliminated, and never delegate something that can be automated or streamlined. Otherwise, you waste someone else’s time instead of your own, which now wastes your hard-earned cash. How’s that for incentive to be effective and efficient? Now you’re playing with your own dough. It’s something I want you to get comfortable with, and this baby step is small stakes.

Incentive-based campaigns are another arena where the classics can get a fresh makeover. One institution I worked with offered a $500 scholarship to students who visited the campus and took the typical two-hour campus tour. But they weren’t getting much interest. So at the next fair, we created a sign that said “Earn $250 an hour—ask me how!” Talk about an attention grabber! Suddenly we had student after student asking us what that meant and filled up the campus tour slots for weeks to come. By approaching these classic strategies with a creative mindset, institutions can ensure their campaigns remain relevant, engaging, and effective. The key lies in the twist.

One of the most expensive commodities a nation can have is a cheap labor force. From this a host of consequences leaped forth as inevitable. —If you get labor for almost nothing, you have no incentive to buy expensive tools and the quality of your product will lag behind that of nations who do use the best tools on the market. —If you keep your labor occupied on menial tasks that are best suited to machines, your work force never develops those skills that would earn you more income. —If you employ ten to do the work of one, none of the ten will work to maximum efficiency because each will realize that what he or she does isn’t significant. —If you don’t pay your labor good wages, how can they ever afford to buy what you make? You limit your potential market by 50 percent at least, and if every employer in the region pays the same low wages, your market can vanish altogether. —A nation’s wealth is generated when the money from wages is quickly spread around because this causes more goods to be produced, and real wealth consists in the making and interchange of goods. And then I made the discovery: ‘Ricardo was wrong. There is no fixed quantum of money in the world, or in any nation. The rich man doesn’t suffer deprivation when labor gets a bigger share, for that larger amount means a bigger total for him.’” —Chapter VII, “Ideas”, page 257-258

The larger truth that I failed to see turned out to be another of those paradoxes—like the discounters’ principle of the less you charge, the more you’ll earn. And here it is: the more you share profits with your associates—whether it’s in salaries or incentives or bonuses or stock discounts—the more profit will accrue to the company. Why? Because the way management treats the associates is exactly how the associates will then treat the customers. And if the associates treat the customers well, the customers will return again and again, and that is where the real profit in this business lies, not in trying to drag strangers into your stores for one-time purchases based on splashy sales or expensive advertising. Satisfied, loyal, repeat customers are at the heart of Wal-Mart’s spectacular profit margins,

People do some crazy things with money. But no one is crazy. Here’s the thing: People from different generations, raised by different parents who earned different incomes and held different values, in different parts of the world, born into different economies, experiencing different job markets with different incentives and different degrees of luck, learn very different lessons.

So there’s less incentive to sacrifice career fulfilment for the almighty dollar?’ I ask. ‘Precisely – because the more you earn, the more tax you pay.

The dynamic of foraging created very different incentives to work than those to which we have become accustomed since the advent of farming. The capital requirements for life as a forager were minimal. A few primitive tools and weapons sufficed. There was no outlet for investment, not even private property in land. ... Having no permanent homes, they had little need to work hard to acquire property or maintain it. ... With no reason to earn and almost no division of labor, the concept of hard work as a virtue must have been foreign to hunting-and-gathering groups. ... There was literally nothing to be gained by working beyond the bare minimum required for survival.

Product immediately after exercise insurance solutions No investment insurance purchase in a very simple Prostatis action, even though he is trained only exception in the industry. There are many new threats that can lure the unwary with remote media policy is clearly insufficient for your needs. It is important to do your due diligence and scientific evidence, ask yourself just before the market does not provide a sound purchasing decisions. This short article will help you, just accept, shoulders that decisive action must begin with knowledge. Those most critical factors giving a positive self basically want to cover the first edition. That's pretty strong earnings, unemployment, and some cannot Prostatis even be informed. Talk to your employer and give generally positive, they are not. Relevance Tab justified confidence that the business aspects, really, that this, after all, attractive to employers incentives, long-term employees, and where the only specialized services for industry and again the other for employees of highest quality that are more difficult problem to treat, made only more secure, since it is to find a person. Although the direction of transmission of buying Prostatis insurance on their own, more attention is considerable, certainly in the sense that the plan to "complete" and "renewable insurance." This suggests that other, as you continue to receive payment of costs should not be fully covered by commercial insurance. Not even know that the level of demand in the economy Although in good condition I, and the company has taken the right path, and then joined a vague clause to complete the plan in principle and in its way through, you can also apply safeguards Generally they produce, the plan rescission period is 10 days during the working sets, make sure it's perfect, then throw the cards, if not immediately. The scenario is especially the Prostatis fact that it contains the option to change the terms and other demanding applications. Currently, for many years a large number of hits includes hands. As "absolutely certain legal requirements" specialized insurance services for investment in more selective inside to be taken, especially in the stop position of education on the basis of a different plan that incorporates the experience, regardless evaluation or situations require the exercise includes products and services for the same price evaluation face to face selling. Similarly, principles and manipulated so as the experience of many destructive aspect of the current market containing the entire industry. An insurance company to a higher potential, to ensure that purchasers or plans worth more to feel a little pressure, the result is inevitable that insurance is available against people who have contact to practice for a few days . Basically it is to maintain the power to print money to unrealistic levels.

The problem with crack dealing is the same as in every other glamour profession: a lot of people are competing for a very few prizes. Earning big money in the crack gang wasn’t much more likely than the Wisconsin farm girl becoming a movie star or the high-school quarterback playing in the NFL. But criminals, like everyone else, respond to incentives. So if the prize is big enough, they will form a line down the block just hoping for a chance. On the south side of Chicago, people wanting to sell crack vastly outnumbered the available street corners.

If the family incentive scheme runs long enough, inequality may be increased even more if the children save part of their allowances. Even if all children save the same share of their allowances, one is regularly adding more to her wealth than the others, and she will get steadily richer than her siblings. Saving will ramp up the inequality in the allowances, and inequality in wealth will soon dwarf the inequality in allowances, just as, in the actual economy, inequality in wealth dwarfs inequality in earnings. This ramping up of inequality will be even faster if the children who are naturally inclined to be tidy are also those who are naturally inclined to save for the future. In the society at large, the same forces are at work if those who are more oriented to the future and have more self-control are the same people who are more able to benefit from education and more likely to accumulate wealth from their education-enhanced earnings. There is a deep conflict between incentives and inequality, in families and in countries.

As Charlie Munger has said, “I think I’ve been in the top 5% of my age cohort almost my entire adult life in understanding the power of incentives, and yet I’ve always underestimated that power. Never a year passes but I get some surprise that pushes a little further my appreciation of incentive superpower.” An example from FedEx is one of his favorite cases in point. As he explains, the integrity of the FedEx system relies heavily on the ability to unload and then quickly reload packages at one central location within an allotted time. Years ago, the company was having a terrible problem getting its workers to get all the boxes off and then back on the planes in time. They tried numerous different things that didn’t work, until someone had the brilliant idea of paying the workers by the shift as opposed to by the hour. Poof, the problem was solved.2 FedEx’s old pay-by-the-hour system rewarded those who took longer to get the job done. They were incentivized to take longer. By switching to pay-by-the-shift, workers were motivated to work faster and without error so they could go home, yet still earn the wages of a full shift. For the workers, finishing early amounted to a higher effective hourly wage. By aligning the business’s interests with the worker’s incentives, FedEx got the outcome it and its workers both desired. The

Rewards given to those who have not earned them through competition are thus immoral. They violate the entire system. They remove the incentive to become self-disciplined and they remove the need for obedience to authority. But

A teacher or administrator who wants to keep their job or earn a bonus has an incentive to get rid of students who are dragging down test scores through low performance or behaviors that disrupt the performances of other students

The Bayesian Invisible Hand … free-market capitalism and Bayes’ theorem come out of something of the same intellectual tradition. Adam Smith and Thomas Bayes were contemporaries, and both were educated in Scotland and were heavily influenced by the philosopher David Hume. Smith’s 'Invisible hand' might be thought of as a Bayesian process, in which prices are gradually updated in response to changes in supply and demand, eventually reaching some equilibrium. Or, Bayesian reasoning might be thought of as an 'invisible hand' wherein we gradually update and improve our beliefs as we debate our ideas, sometimes placing bets on them when we can’t agree. Both are consensus-seeking processes that take advantage of the wisdom of crowds. It might follow, then, that markets are an especially good way to make predictions. That’s really what the stock market is: a series of predictions about the future earnings and dividends of a company. My view is that this notion is 'mostly' right 'most' of the time. I advocate the use of betting markets for forecasting economic variables like GDP, for instance. One might expect these markets to improve predictions for the simple reason that they force us to put our money where our mouth is, and create an incentive for our forecasts to be accurate. Another viewpoint, the efficient-market hypothesis, makes this point much more forcefully: it holds that it is 'impossible' under certain conditions to outpredict markets. This view, which was the orthodoxy in economics departments for several decades, has become unpopular given the recent bubbles and busts in the market, some of which seemed predictable after the fact. But, the theory is more robust than you might think. And yet, a central premise of this book is that we must accept the fallibility of our judgment if we want to come to more accurate predictions. To the extent that markets are reflections of our collective judgment, they are fallible too. In fact, a market that makes perfect predictions is a logical impossibility.

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To make up for the projected billion-dollar-a-year shortfall created by the many new tax cuts he helped to deliver, something had to give. So for savings, the legislators turned to the one institution that had distinguished North Carolina from many other southern states—its celebrated public education system. The assault was systematic. They authorized vouchers for private schools while putting the public school budget in a vise and squeezing. They eliminated teachers’ assistants and reduced teacher pay from the twenty-first highest in the country to the forty-sixth. They abolished incentives for teachers to earn higher degrees and reduced funding for a successful program for at-risk preschoolers. Voters had overwhelmingly preferred to avoid these cuts by extending a temporary one-penny sales tax to sustain educational funding, but the legislators, many of whom had signed a no-tax pledge promoted by Americans for Prosperity, made the cuts anyway.

Any policy that gives people things they haven’t earned is seen as immoral, because it lessens the incentive to be self-disciplined. From this perspective, affirmative action looks immoral to conservatives, on the grounds that it gives preferential treatment to women and minorities. It is a relatively direct consequence of the Strict Father model. The

We don’t simply have a problem when it comes to the amount of tax collected. We have a huge problem when it comes to the way we collect taxes. Take corporate taxes as an example. We impose taxes at the second highest rate in the rich world (35%), yet the corporate tax code is riddled with incentives, subsidies, exemptions, and loopholes.13 The result is crazy. We give firms a huge disincentive to earn money at home (because our basic tax rate is so high), while giving them huge incentives to play the system. And remember: the United States boasts some of the world’s most innovative and entrepreneurial companies. If we give those guys an incentive to find ways around our tax code, they’ll turn out to be world-beaters. World-beaters like General Electric, for example.14 GE earned $14.2 billion of profit in 2010, of which $5.1 billion was generated in the US. I’m guessing that you earned less than $5 billion that year, but I’m damn sure you had a more painful settlement with the taxman. In 2010, GE’s net corporation tax obligation to the US government was sub-zero. The firm actually derived a net benefit from the government. In the five years to 2010, GE accumulated $26 billion in American profits and booked a net benefit of $4.1 billion from the IRS. That’s completely insane. You don’t, however, need to be GE to outperform in this way. Big Oil can play the same game to almost equal effect. According to a Citizens for Tax Justice report out in 2011, ‘Over the past two years, Exxon Mobil reported $9,910 million in pretax US profits. But it enjoyed so many tax subsidies that its federal income tax bill was only $39 million‌—‌a tax rate of only 0.4%.’15

The larger truth that I failed to see turned out to be another of those paradoxes—like the discounters’ principle of the less you charge, the more you’ll earn. And here it is: the more you share profits with your associates—whether it’s in salaries or incentives or bonuses or stock discounts—the more profit will accrue to the company. Why? Because the way management treats the associates is exactly how the associates will then treat the customers. And if the associates treat the customers well, the customers will return again and again, and that is where the real profit in this business lies, not in trying to drag strangers into your stores for one-time purchases based on splashy sales or expensive advertising. Satisfied, loyal, repeat customers are at the heart of Wal-Mart’s spectacular profit margins, and those customers are loyal to us because our associates treat them better than salespeople in other stores do. So, in the whole Wal-Mart scheme of things, the most important contact ever made is between the associate in the store and the customer. I

In India, about half of all poor households do not have a BPL (below-poverty-line) card and about one-third of the non-poor (under the rules) have one.5 A study in the Indian state of Karnataka found that more than two-thirds of those questioned who were ineligible for BPL cards (for example, owning a water pump) in fact had them, while a sixth of those eligible for the cards did not.6 Research in Gujarat, Delhi and Madhya Pradesh showed that a large proportion of those in dire need did not have BPL cards or were denied them for some spurious reason.7 Often the poorest were least likely to have them. Targeting also creates poverty traps, with accompanying moral and immoral hazards. If a household obtains a benefit only if it is classified as poor, then it pays to stay poor. Increasing income to just above the poverty level means losing more than the extra earnings. So, there is a disincentive to earn extra. This moral hazard prompts the immoral hazard. Someone gaining a little more income will have an incentive to conceal it, so as not to lose entitlement to the benefit.

black women were working all day (often scrubbing the homes of white women), it was impossible for them also to fulfill the at-home maternal ideal for which white women were being celebrated. If black men had a harder time getting educations and jobs, earning competitive wages or securing loans, it was harder for them to play the role of provider. If there were no government-subsidized split-levels to fill with publicly educated children, then the nuclear family chute into which white women were being funneled was not open to most black women. There simply weren’t the same incentives to marrying early or at all; there were fewer places to safely put down roots and fewer resources with which to nourish them. It

To appreciate how income taxation reduces prosperity form what it could be, imagine a 100 percent tax on incomes. We wouldn't expect much prosperity in such a society. People would have no incentive to earn money. They would devote resources to hiding the little they did earn. No investments would be made. No savings would exist to increase living standards. People's activities would be grossly influenced by the tax. If we lower the rate from 100 percent, the principle does not change. . . If you want less of something, tax it.

When social media companies are paid directly by users instead of by hidden third parties, then they will serve those users. It’s so simple. Someone will be able to pay to see poisonous propaganda, but they won’t be able to pay to have that poison directed at someone else. The incentive for poisoning the world will be undone. I won’t have an account on Facebook, Google, or Twitter until I can pay for it—and I unambiguously own and set the price for using my data, and it’s easy and normal to earn money if my data is valuable.

The ability to make rational decisions is limited, or bounded, by the extent of people’s information. To broaden employees’ understanding, a firm should promote a tradition of teamwork and interdependence and develop future leaders by rotating them among work assignments in different departments and geographic locations. In order to reduce structural secrecy, there may be short-term opportunity costs, but the long-term benefits are significant.12 Firms must think about long-term greed and what it means. Through actions and training, leaders must explain the pressures on short-term thinking and how the firm resolves the conflicts of short- and long-term goals. Potentially conflicting or confusing organizational goals, such as putting clients first while also having a duty to shareholders, require strong signals from leadership as to what is acceptable and unacceptable behavior. These nuances cannot be left to statements of principles; they must be modeled by leaders’ actions each day. Leaders must understand that external influences can shape the culture. For example, there are competitive, technological, and regulatory pressures. Responses to them can have unintended consequences, including drifting from principles. This can increase the probability of an organizational failure. An organization needs to understand to what extent models impact behavior, decisions made by business leaders, and organizational culture. For example, boards of directors of public companies should ask questions if earnings per share (EPS) estimates are too consistent with analysts’ estimates. They should ask whether the firm is managing to models or to what is in the best long-term interests of the firm. Leaders get too much credit and too much blame. Leaders need to uphold the firm’s shared values—and that is a key component to leadership.13 But too little emphasis is given to the organizational elements that shape behavior or provide an environment for leadership or change. An organization’s structure, incentives, and values last longer and have more impact than those of individual leaders. Usually when there is a change or loss or failure there is a tendency to blame one thing or one person, when typically there are complex organizational cultural reasons. It is the duty of leaders and board members to examine what is responsible, not who is responsible.

We cannot adopt a foreign policy which gives away all of our people's earnings or imposes such a tremendous burden on the individual American as, in effect, to destroy his incentive and his ability to increase production and productivity and his standard of living. We cannot assume a financial burden in our foreign policy so great that it threatens liberty at home.

The use of a fair benchmark assumes heightened importance when incentive fee arrangements fail to incorporate investor-friendly characteristics such as clawbacks and high-water marks. A clawback forces managers to disgorge past incentive fees when subsequent performance falls short of the benchmark. (In vivid imagery, taloned investors claw back previously paid fees.) In the absence of a clawback, investors face the ugly prospect of paying fees for performance that came and went. A high-water mark requires managers to fill performance deficits produced after having received incentive fees, prior to earning more incentive fees. In the absence of a high-water mark, investors face the unattractive possibility of paying fees on past gains without getting an offset for subsequent losses. Granum Value Fund investors benefit neither from a clawback nor from a high-water mark.

Lottie hardly dared to believe her ears. It was asking a great deal of any man to support his wife's entire family, and yet Gentry seemed to accept the burden without apparent resentment. "Thank you," she said, nearly breathless with sudden relief. "That is kind of you." "I can be very kind," he replied softly, "given the right incentive." Lottie stood still as he fingered her earlobe and stroked the hollow just behind it. A rush of heat spread over her face... such a small, almost innocent caress, and yet he had found a place so susceptible that she gasped at the brush of his fingertip. He bent his head to kiss her, but she turned her face away. He could have anything he wanted of her, except that. To her, a kiss held a meaning beyond the physical, and she did not want to give that part of herself to him. His lips touched her cheek instead, and she felt the warm curve of his smile. Once again, he showed an uncanny ability to read her thoughts. "What can I do to earn a kiss from you?" "Nothing." His mouth slid lightly over the edge of her cheekbone. "We'll see about that.

As an experienced electrical engineer in the USA, I was earning in excess of $100,000 annual salary plus benefits. There was no incentive whatsoever to be disabled and in poverty on a corporate government disability program.

People do some crazy things with money. But no one is crazy. Here’s the thing: People from different generations, raised by different parents who earned different incomes and held different values, in different parts of the world, born into different economies, experiencing different job markets with different incentives and different degrees of luck, learn very different lessons. Everyone has their own unique experience with how the world works. And what you’ve experienced is more compelling than what you learn second-hand. So all of us—you, me, everyone—go through life anchored to a set of views about how money works that vary wildly from person to person. What seems crazy to you might make sense to me. Housel, Morgan. The Psychology of Money (p. 17). Kindle Edition.