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Do Performance Incentives Make People Greedy?

The promise of performance incentives starts early. Preschoolers get stickers for good behavior. Later, parents might buy their teenagers pizza for scoring well on tests. And in the business world, employers dangle bonuses for achieving certain goals.

But what do these incentives actually achieve? Researchers have studied their effects primarily from two angles: how well people perform and how they feel about the task for which they are being rewarded. But “there’s really a third question that, to the best of our knowledge, has not been asked,” says Loran Nordgren, an associate professor of management and organizations at the Kellogg School. “Does it affect the value you place on the reward itself?”

In other words, does an employee in a commission-based job feel differently about money than a worker who earns a fixed salary?

The answer appears to be yes, according to new research from Nordgren. He and a coauthor found that people who are rewarded for their performance express more desire for money than people who receive fixed payments—even when the amounts they end up earning are similar.

This increased hunger for money can manifest itself in different ways, such as a greater willingness to complete a...

One More Time: Can Government Be Run Like a Business?

We may finally get an answer to the question. It surfaced again in a recent Sirius radio show, Knowledge@Wharton, “Can Government Be Run Like a Business?” when it was discussed by the University of Maryland’s Philip Joyce and Wharton’s Peter Conti-Brown.   

Their discussion was at the 10,000-foot level, at times philosophical, and focused on the role government plays and the differences in the dynamics of the public and private sectors. As Dr. Joyce stated, “I think people conflate how well government operates with the question of whether they think government should do something or not.”  

He’s correct, of course; they are separate and very different questions. It’s unlikely there will ever be complete agreement on the role of government but it’s clear the Trump administration is not going to wait for a consensus. At a different level, new agency leaders will have to deal with an operating environment unlike what they are accustomed to in any other sector. In Professor Joyce’s words, “The system we have is a system where there’s all this fragmentation of power, where it’s not a hierarchy, where you don’t have control over your budgetary...

Agencies Could See Deeper, Faster Cuts Than Previously Contemplated

Most years, even in a Presidential transition, federal agencies have a pretty decent sense of where their budgets are headed. And in transition years, they are typically in overdrive trying to build a budget reflecting directions issued by the new administration. Not so this year. With no director of the Office of Management and Budget yet on board and no specific budget instructions coming from the White House, there are at least three possible budget scenarios in play. With the continuing resolution set to expire in late April, agencies face tremendous uncertainty. And it’s likely to be awhile before they have much clarity.

Here’s where we stand. The CR expires April 28. Most initial expectations were that it would essentially be extended through the rest of the fiscal year, with a few adjustments, while the administration and Congress work toward a fiscal 2018 budget plan. But given the pace and expansiveness of the earliest Trump administration actions, it is not unreasonable to expect the White House to push for significant, immediate budget adjustments and actions.

Meanwhile, there are three budget proposals on the table that need to be taken seriously. The so-called “Ryan Budget” is the one most...

People Are Finding It Hard to Focus on Work Right Now

Months before the election, there were reports of greater political tension in offices than in previous election cycles. In one survey from the American Psychological Association, 10 percent of respondents said that political discussions at work led to stress, feeling cynical, difficulty finishing work, lower work quality, and diminished productivity.

Now, a new survey commissioned by BetterWorks—a software company that helps workers with setting and tracking goals—finds that post-election, politics is continuing to take a toll on workplace productivity. The online survey included 500 nationally representative, full-time American workers, and found that 87 percent of them read political social-media posts during the day, and nearly 50 percent reported seeing a political conversation turning into an argument in the workplace. Twenty-nine percent of respondents say they’ve been less productive since the election.

While simply reading political posts at work isn’t in itself a cause for concern, it’s the potential negative impact it has on workers that could pose a challenge for employers. The issue of “not working at work” is one most employers were aware of well before the election. And the stress of the 2016 election both at home and at work was already on...

The Underrated Art of Persuasion

As CEO of a family-run business, Donald Trump had little occasion to practice his persuasive powers. He was used to getting his way. As president, he has so far displayed this command-and-control style of leadership, issuing a rapid volley of executive orders and firing the acting attorney general when she displeased him.

But when he meets with some of the US’s most influential CEOs tomorrow—many deeply skeptical about his positions on trade and immigration—he won’t be able to browbeat them into submission. He’ll need to use persuasion to show them the wisdom of his actions if he wants their support.

Among the CEOs expected to attend the first meeting of Trump’s business advisory council are Jamie Dimon, of JP Morgan; Ginny Rometty, of IBM; Mary Barra, of General Motors, and Robert Iger, of Disney.

Trump prides himself on being a tough negotiator, but persuasion should be part of the tool kit for any deal maker. Effective persuasion doesn’t rely on manipulation or deception, but on establishing credibility, finding common ground, and relying on solid evidence, says Jay Conger, a business professor and author of The Necessary Art of Persuasion. “People must understand persuasion...

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