Re: [OPE] socialist planning in capitalist firms

From: Gerald Levy <>
Date: Sat Jun 05 2010 - 16:35:26 EDT

> But my point is that evaluating managerial inputs in person hours is not a
> good answer because
> you are not measuring the falling in managerial quality as a larger degree
> of centralisation goes by.

Hi Alejandro:

A few days ago I was listening to an interview on the NPR (National Public
Radio) show
"All Things Considered" of mainstream behavioral economist, Dan Ariely. He
created some
experiments to determine whether it's the case that performance tends to
increase as anticipated
rewards increase and the results seem to indicate that if the compensation
aystem is based on
pre-determined performance goals (i.e. a material incentive plan) then the
actual performance of
subjects tended to *decrease* as the expectation of additional reward
created additional stress
which impeded the subjects' performance. This would suggest that
pay-for-performance systems
for managers (and others) is a problematic system.

In solidarity, Jerry

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Received on Sat Jun 5 16:37:18 2010

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