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Evaluating a Modern Incentive System
A key feature of well-designed performance rewards is that they are tied directly to the desired successful outcome. Given the following case study, evaluate the effectiveness of the company's bonus system. Explain its most likely unintended consequence and propose one specific modification to better align the drivers' actions with the company's ultimate goal.
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Social Science
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CORE Econ
Economics
Economy
The Economy 2.0 Microeconomics @ CORE Econ
Ch.5 The rules of the game: Who gets what and why - The Economy 2.0 Microeconomics @ CORE Econ
Introduction to Microeconomics Course
Evaluation in Bloom's Taxonomy
Cognitive Psychology
Psychology
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On a pirate ship, a common rule was that the lookout who first spotted a vessel that was later captured would receive the best pair of pistols from the prize, on top of their normal share. From an economic perspective, why was this rule a particularly effective way to motivate the lookouts?
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Analyzing the Pirate Lookout's Incentive
The primary economic purpose of rewarding the pirate lookout who first spotted a prize with the best pair of pistols was to ensure a more equitable distribution of the captured wealth among all crew members.
The articles of a pirate ship often included a rule rewarding the lookout who first spotted a prize with the best pair of pistols, in addition to their regular share. Match each component of this incentive system to its primary economic function.
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