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The Econ 101 Management Method

Econ 101 management is the style used by people who know just enough economic theory to be dangerous.

The Econ 101 manager assumes that everyone is motivated by money, and that the best way to get people to do what you want them to do is to give them financial rewards and punishments to create incentives.

For example, AOL might pay their call-center people for every customer they persuade not to cancel their subscription.

A software company might give bonuses to programmers who create the fewest bugs.

It works about as well as giving your chickens money to buy their own food.

One big problem is that it replaces intrinsic motivation with extrinsic motivation.

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