Tim Hartford, author of The Logic of Life, does a great job applying economic theory to the workplace. Does tournament theory really explain management high salaries?
Tim Hartford, author of The Logic of Life, does a great job applying economic theory to the workplace. Does tournament theory really explain management high salaries?
The theory I ascribe to (in an ideal system, which it not a true system) leadership compensation is based upon time frames. The higher your ranking in the organization the longer your time frames for goal completion are. Additionally the longer the time frame the greater your leverage has to be as a leader.
Great ideas. I think that’s a good way to avoid copious overpayment. But you’re right, it’s not a true system.
How do you feel about stock options? I think the goal was to tie executive compensation to something to avoid over-payment, but they then figured out how to game the system.