A Great Place to Work For All

Foreword

A Better View of Motivation

by Dan Ariely

There is no question that for almost all companies the largest expense, across the board, is employee compensation. Most companies spend the majority of their income to motivate people through salaries and bonuses. But do companies spend this large amount of money in an ideal way or would they be better off spending some of it in other ways?

Some time ago, I sat down for a long discussion with an executive from a very (very) large publicly traded bank. Like many financial firms, his bank gave some people incredible bonuses at the end of their fiscal year, sometimes to the tune of millions of dollars. The executive explained to me the complex and detailed system of equations the bank used to allocate ...