In this book, Michael Sandel, a Harvard professor takes a hard look at the issue of money, and analyzes how much it permeates our society and how it changes our society for good or for worse. For the longest time, our society encourages us to earn more, to consume more; our society tells us that as long as you pay enough money, you can get everything you want; our society tells us that to get the best performance from a person is to give him more and more financial incentives.
But is money a panacea to our society woes? Can money really bring the results that we desire? Is it that as long as we pay enough, we can always get what we pay for? The answer is a resounding no.
In this book, Sandel enumerates cases after cases of how “market crowds out morals”– a term refers to how the usage of money ultimately diminishes the whole point of an exercise. Want to show appreciation for a friend by giving him cash? Most likely he will feel insulted and shun you forever. Fining the parents who come late to pick up their children at daycare centers? Even more of them will just pay the fine and be as late as usual. Bribe your girlfriend to lose weights? When the bribe is over she would be even fatter than before. The point is that money is a very corrosive medium. Once money is involved, people’s attitude change as well and this may offset any positive benefits money brings. Previously the parents would feel guilty when they come late to pick up their children, but now they can just pay the fines and be absolved of all the guilt. Getting slim down is good for health, but the moment one gets paid out of it, it becomes a chore and the attention is shifted on to the money, not on the health benefits. Giving a gift to a close friend is a sign of goodwill, but giving money simply cheapens the friendship and corrodes the goodwill.
So, leaders and managers, take heed! In order to bring the best out of your people, use money judiciously. I am not saying that you can’t reward people with money– salesman are so used to commission now that it is the norm the salesman pretty much get paid for how much sales they closed– but you need to do it carefully. Fogcreek stopped paying the salesman on commission basis because doing so “ is a degrading way to treat employees”, “is reducing the performances”, “ eliminates the disincentive to do all the service stuffs that don’t result in commission”, “enables the sales to take a longer view of the value of a prospect”.
The removal of commission simply makes the team better.
Maybe this is just the experience of one software company, and it may or may not apply to other company, but this is something that all of us need to think carefully.
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