You Get What You Deserve
What does it mean by "you get what you deserve"?
What does it meant that you "deserve" something? Specifically, that by "working hard", you "deserve" the results of that work.
There seems to be, here, an assumption of cause and effect: That your efforts produce the reward for the result of your work. But that is not correct. A farmer works hard and the result is that food is produced; a CEO works hard and the result is that a failing company is turned around; a writer works hard and the result is that a book is written. Any reward that might accrue to the farmer, CEO or writer is not the result of their work product, but rather how much the market values that work product.
Markets are social contracts, agreements among people about how people relate to each other. As with any other contract, that relationship can be fair or unfair.
What determines the quality of the relationships within a contract?
The relative power of the people involved.
What is power in this context?
The ability to control or enforce an aspect of the contract: In Behaviorist terms, a S-stimulus is presented, an O-operant is produced, and a R-reinforcement is produced -- operant and reinforcement following the pattern of cause and effect. But stimulus-operant also follows the cause-effect paradigm; so the operant is also the stimulus for the subsequent reinforcement.
The ability to control the reward in an operant relationship: X produces a stimulus-S1; Y responds-R1 to that stimulus-S1; X responds-R2 to R1 with a response-R2 depending on its-R1 quality by rewarding-alpha, punishing-beta or ignoring-gamma that response-Y-R1. According to Behavorist theory, a reward-alpha increases the frequency of R1, a punishment-beta decreases the frequency of R1, and ignoring-gamma the response decreases the frequency of R1. The size or magnitude of the response-R1 is a function of the schedule of reinforcement-R2. The size or magnitude or frequency of R2 is more determined by the schedule of reinforcement than by R2's size.
But that is not how CEO compensation works. The size of the compensation is justified by 1) the results and 2) the need to attract the "best" person, who will produce an expected result. But the desired result does not prove that the person is the best. The result only suggests that that person has some ability to do the job.
From the point of view of attracting people, the size of the compensation may result in attracting the "worst" people.
What is not made clear by the size of the offer of compensation is the qualities of the person desired.
The desired CEO in many cases is the one that can make the most money for the stock holders, not who will build the best company.
What does it meant that you "deserve" something? Specifically, that by "working hard", you "deserve" the results of that work.
There seems to be, here, an assumption of cause and effect: That your efforts produce the reward for the result of your work. But that is not correct. A farmer works hard and the result is that food is produced; a CEO works hard and the result is that a failing company is turned around; a writer works hard and the result is that a book is written. Any reward that might accrue to the farmer, CEO or writer is not the result of their work product, but rather how much the market values that work product.
Markets are social contracts, agreements among people about how people relate to each other. As with any other contract, that relationship can be fair or unfair.
What determines the quality of the relationships within a contract?
The relative power of the people involved.
What is power in this context?
The ability to control or enforce an aspect of the contract: In Behaviorist terms, a S-stimulus is presented, an O-operant is produced, and a R-reinforcement is produced -- operant and reinforcement following the pattern of cause and effect. But stimulus-operant also follows the cause-effect paradigm; so the operant is also the stimulus for the subsequent reinforcement.
The ability to control the reward in an operant relationship: X produces a stimulus-S1; Y responds-R1 to that stimulus-S1; X responds-R2 to R1 with a response-R2 depending on its-R1 quality by rewarding-alpha, punishing-beta or ignoring-gamma that response-Y-R1. According to Behavorist theory, a reward-alpha increases the frequency of R1, a punishment-beta decreases the frequency of R1, and ignoring-gamma the response decreases the frequency of R1. The size or magnitude of the response-R1 is a function of the schedule of reinforcement-R2. The size or magnitude or frequency of R2 is more determined by the schedule of reinforcement than by R2's size.
But that is not how CEO compensation works. The size of the compensation is justified by 1) the results and 2) the need to attract the "best" person, who will produce an expected result. But the desired result does not prove that the person is the best. The result only suggests that that person has some ability to do the job.
From the point of view of attracting people, the size of the compensation may result in attracting the "worst" people.
What is not made clear by the size of the offer of compensation is the qualities of the person desired.
The desired CEO in many cases is the one that can make the most money for the stock holders, not who will build the best company.
posted by Godel at 5:46 AM
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