Motivation - Rationality
For an economy to be productive, people need to work hard at the tasks they are responsible for. If people slack off, tasks are either done poorly or not at all. The result is lower productivity. Finding ways to get people to work effectively should be a major goal of economics.
Mainstream economics doesn’t have a lot to say about motivation. If people are rational, all that needs to be done to get people to work hard is to align incentives with the desired results. People will work hard if their pay is connected to their performance. While people do respond to incentives, it is often hard to evaluate the work people are doing. This makes it hard to use pay as an incentive. Also, even if pay is aligned to performance, people aren’t interested only in money. Emotions often trump logic. People sometimes do things they know will hurt them in the long run when they are angry or upset. There are more powerful methods than pay incentives that can be used to get people to work hard.
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Name: Dawn McMahon
E-mail: Private
Date posted: June 09, 2009 - 06:23 pm
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