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View Diary: Bwahahahahahaha! American Airlines and Bain Capital. (282 comments)

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  •  There's a lot of academic research on compensation (0+ / 0-)

    packages out there. "Monetary compensation" can take many shapes, so I'd have to look at the study to address it. Here's an example of where monetary compensation can demotivate:

    A couple of years ago, Microsoft gave everyone a 10% raise. This pissed off the people who performed well and thought they deserved more than their peers. This had the effect of many of Microsoft's top performers leaving for Google or other firms. So yeah, monetary compensation can definitely be a bad way to encourage better performance.

    Still, there's pretty strong correlation between things like stock options and performance. The correlation between golden parachutes isn't that good, but that might be what you expect, considering that they're given to explicitly encourage risk-taking...

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