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Comment by tptacek | Hacker News Reader

Wow, this is one of the coolest things HN has found in awhile.

It's remarkable how, time and time again, formal incentive compensation schemes are shown to cause more harm than benefit. I started paying attention when Joel Spolsky called it out 6-7 years ago, and then read Peopleware (an excellent book) which reiterates the point (and calls it "teamicide"), and then read the Harvard Business Review article ("Why Incentive Plans Cannot Work").

Why would a company as smart as Google forge ahead with schemes like this in the face of all available evidence that it's a bad idea?

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Spolsky's article:

http://www.joelonsoftware.com/articles/fog0000000070.html

One of my coworkers has one of those Ship It awards. It's... pretty sad.

Regarding the Incentive system actively promotes bad behavior on slide 7, Dan Pink gave a very interesting talk on Motivation at TED — with surprising results:

http://www.ted.com/talks/dan_pink_on_motivation.html

TED appears to be down. Here's the same (I think) video on youtube: http://www.youtube.com/watch?v=rrkrvAUbU9Y

or with animation http://www.youtube.com/watch?v=u6XAPnuFjJc

Watching that was a very worthwhile 10 minutes: an interesting set of ideas, brilliantly presented.

Incentives are one of those things that people just want to be true (like e.g. "one true soul mate") and do everything they can to reject any and all evidence that contradicts this belief.

While we're quoting Joel Spolsky: http://www.joelonsoftware.com/articles/Ladder.html

I wonder if Fog Creek has had the similar frustrations with engineering ladders that Piaw mentions. Although given the distinct difference in company size, it might not be a valid comparison.

Watch "The Wire"; it is a whole show about incentive structures.

This presentation comes out against some specific incentives, but doesn't state a judgment on formal incentive schemes in general. From what I've heard, these schemes are quite alive and well at Google. So perhaps they have found a way to make them work, or perhaps they just take them for granted at this point.

In either case, there must be something about the incentive structure that is serving Google well.

Depends on how you feel about the recent spate of defections to smaller companies.

Most likely because they didn't bother to actually look at the available evidence.

> Why would a company as smart as Google forge ahead with schemes like this in the face of all available evidence that it's a bad idea?

My guess: because it can be algorithmized.

But clearly not well

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