“…If you have a dumb incentive system, you get dumb outcomes…”

“…If you have a dumb incentive system, you get dumb outcomes…” This famous quote by the late Charlie Munger remains as relevant as ever. In another brilliant article from the Bartleby column in The Economist, the author explores the challenges of designing incentive systems that lead to meaningful and desirable outcomes. The article highlights the difficulties in crafting systems that not only motivate but also avoid unintended consequences. There are 1.001 (like in Sherazade tale) ways an incentive system can go wrong, so it's important to take your time. Pilot programs and thorough reviews are crucial to ensure the system works as intended and doesn't produce harmful side effects—something the article explores in great detail. A must-read for anyone interested in management. Hope you enjoy it as much as I did. When workplace bonuses backfire https://www.economist.com/business/2024/10/10/when-workplace-bonuses-backfire from The Economist

- Pedro

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