For instance, the theory doesn’t say that chances of moving up in the company depend mostly on luck. It says that there is a force that prevents people from being promoted strictly on basis of their relative performance (to coworkers), and this force is the error term which we call “luck”, but you could also cal it static. It is a factor that prevents us from observing actual performance and effort by the worker, and it exists in nearly all companies.

Furthermore, this theory wasn’t invented to push a salary scheme that greatly rewards CEOs, but this theory was merely trying to explain why in the real world, many companies have such a highly skewed salary/bonus distribution.

Keep up the good work.

The physicist Wolfgang Pauli once commented on a bad science paper that “This isn’t right. It’s not even wrong”. That’s how I feel about this entire argument :o)

Huh? Does this guy understand stock options? There is no downside risk with stock options. The stock goes up, you exercise and win. The stock goes down, you don’t exercise.

Now that I think about it though, maybe they mean it’s less risky to just pay employees a salary rather than give them options that may not be exercised. Ah well. Way to debunk this theory anyway.

And “people don’t work if you’re not constantly kicking their ass” goes in my upcoming post on 5 more business maxims that need to go. Thanks again!

I think you’re exactly right that to some, kicking people’s ass seems easier – maybe because that’s what they’ve always done (or others have done to them). Making people happier at work is definitely easier – and better for business!

There are many “corporate wisdom” phrases that seem more like a justification to how thinks are done than a real explanation. Here’s the last one I heard from a guy that has been manager for 20 years: “people don’t work if you’re not constantly kicking their ass”.

Of course, it seems “easier” to kick people’s ass than creating a culture when everyone ENJOY their job and consequently DO their job. It “seems” easier, but I think is not. To create a great environment you have to invest a lot of energy, change people’s mentality and create a commitment to happiness in the company, but then everything will go on smoothly. In the other case, you’ll have to “kick people’s ass” forever. Well… not forever. Just until they quit, or either the kicked or the kicker dies, whatever comes first :P.