{"id":193676,"date":"2008-11-25T00:05:00","date_gmt":"2008-11-25T05:05:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/11\/25\/big-bonuses-make-you-stupid\/"},"modified":"2008-11-25T00:05:00","modified_gmt":"2008-11-25T05:05:00","slug":"big-bonuses-make-you-stupid","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/11\/25\/big-bonuses-make-you-stupid\/","title":{"rendered":"Big Bonuses Make You Stupid"},"content":{"rendered":"<p>That&#8217;s the short read on <a href=\"http:\/\/www.nytimes.com\/2008\/11\/20\/opinion\/20ariely.html?partner=rss&amp;emc=rss&amp;pagewanted=all\">Dan Ariely&#8217;s reseasrch<\/a>, he is a professor of behavioral economics at Duke University:<\/p>\n<blockquote style=\"color: rgb(0, 0, 153);\"><p>We did this study in India, where the cost of living is relatively low so that we could pay people amounts that were substantial to them but still within our research budget. The lowest bonus was 50 cents \u2014 equivalent to what participants could receive for a day\u2019s work in rural India. The middle-level bonus was $5, or about two weeks\u2019 pay, and the highest bonus was $50, five months\u2019 pay.<\/p>\n<p>What would you expect the results to be? When we posed this question to a group of business students, they said they expected performance to improve with the amount of the reward. But this was not what we found. The people offered medium bonuses performed no better, or worse, than those offered low bonuses. But what was most interesting was that <span style=\"font-weight: bold;\">the group offered the biggest bonus did worse than the other two groups across all the tasks.<\/span><\/p><\/blockquote>\n<p>(<span style=\"font-style: italic;\">emphasis mine<\/span>)<\/p>\n<p>So, we have people over compensated and for work that mostly really does not to be done, (financials have exploded relative to the rest of the economy over the past few decades) and given bonuses for under-performing, and now we find out that the bonuses make them do a <span style=\"font-weight: bold;\">crappier<\/span> job.<\/p>\n<p>Delightful.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>That&#8217;s the short read on Dan Ariely&#8217;s reseasrch, he is a professor of behavioral economics at Duke University: We did this study in India, where the cost of living is relatively low so that we could pay people amounts that were substantial to them but still within our research budget. The lowest bonus was 50 &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[973,1004,1023,982],"tags":[],"class_list":["post-193676","post","type-post","status-publish","format-standard","hentry","category-economy","category-finance","category-labor","category-stupid"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/193676"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=193676"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/193676\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=193676"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=193676"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=193676"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}