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May 25, 2012
Mark Clayton: Is Hillary's State Dept. hacking Al Qaeda? Not quite
Erika Bolstad: Temple cancels Wasserman Schultz speech
The Kosher Gourmet by Ethel G. Hofman: The former president of the International Association of Culinary Professionals, whose members included the likes of Julia Child, is back with contemporary Shavous cuisine: Ruby Fruit Soup, Sweet Noodle Kugel with Cheese, Key Lime Curd, Calsone Casserole Frittata with Wild Mushrooms, Sun-dried tomatoes and Olives, Baked Tilapia with Pepper Cheese Cream and Brown Sugar Shortbread
May 24, 2012
Jeff Jacoby: The peace process battered Israel's reputation
Michael Muskal: 'Pro-choice' position hits record low, according to poll
Chris Farrell: Are We in a Tech Bubble?
The Kosher Gourmet by Penelope Wall: PHILLY CHEESE STEAKS --- hold the steak!
May 23, 2012
Tony Pugh: More private colleges offering tuition discounts
Mary Beth Franklin: How to Choose the Right Annuity for You
Tina Susman: The wig wasn't enough: Man gets 13 years for posing as his dead mom
The Kosher Gourmet by Emma Christensen:A simple way to do fish right
May 22, 2012
Warren Richey: Can US group challenge overseas surveillance act? Supreme Court to decide
Thomas M. Anderson: Walking Away From a Mortgage
The Kosher Gourmet by Megan Gordon: Enjoy a celebration of the most rich and layered flavors: Black bean, sweet potato and quinoa chili
May 21, 2012
Mark Clayton: Cybersecurity: How US utilities passed up chance to protect their networks
Howard LaFranchi: NATO summit: Who will foot the bill for long-term Afghanistan security?
Chris Farrell : Earn Dividends in Emerging Markets with This WisdomTree ETF
Stephen Whiteside, Ph.D. : Mayo Clinic Medical Edge: Social anxiety disorder --- or just shy?
Guy Jackson : Victim's father regrets death of Lockerbie bomber
The Kosher Gourmet by Mario Batali: Famed chef's veal shoulder farsumagru: A festive meat course for late spring
May 18, 2012
Rabbi Berel Wein: Striving: The People of the Book's Book for (All of) the People
Steven Goldberg: 5 Great Stock Picks and the Exchange-Traded Fund that Owns Them
Mary Pickett, M.D.: Ask the Harvard Experts: Don't be forced into gluten-free lifestyle based merely on a doctor's false-positive test
The Kosher Gourmet by Carolyn Malcoun: DIY healthy lunchbox treats: HOMEMADE FRUIT BARS for kids and brown-bagging adults alike
May 17, 2012
Warren Richey: Teacher fired for being unwed and pregnant can sue religious school, court rules
Josh Mitnick: Netanyahu's 'centrist' coalition is already proving it's anything but
Steven Goldberg: Earn Dividends in Emerging Markets with This WisdomTree ETF
Amina Khan: Research links coffee to lower death rates
The Kosher Gourmet by Faith Duran : Cheesy Potato Breakfast Casserole with Cheddar and Sun-Dried Tomatoes
May 16, 2012
Carmen Terzic, M.D., Ph.D. : Mayo Clinic Medical Edge: A variety of exercises can help improve balance
Melissa Healy: National strategy on Alzheimer's disease aims to halt it by 2025
The Kosher Gourmet by Joyce White : GOODNESS GRACIOUS: GREENS! 4 winning recipes that are no longer just for down-home folks (Includes expert tips & techniques)
May 15, 2012
Kristen Chick: Obama administration resumes arms sales to Bahrain despite serious unresolved human rights issues. Activists feel abandoned
Pat Mertz Esswein: Homes are now affordable again and mortgage rates are low. What you need to know before you buy
Kathy Kristof: Our Practical Investor Fights Inflation with These 6 Investments
Sue Hubbard, M.D.: The Kid's Doctor: Lactose intolerant young child? Check again
The Kosher Gourmet by Kathy Hunt: Spread a Little Excitement with EXOTIC CONDIMENTS (4 RECIPES)
May 14, 2012
Lisa Gerstner: How to Protect Your Identity, Finances If You Lose Your Phone
Harvard Health Letters: Heart disease and dementia
The Kosher Gourmet by Megan Gordon: MANGO COCONUT OAT MORNING MUFFINS are a bright but hearty delight
May 11, 2012
Jessica L. Anderson: Get the Best Deal on a Used Car
Jett Stone: Forget face-lifts and fake knees. Scientists have seen the fountain of youth --- and it's broccoli
The Kosher Gourmet by Chef Mario Batali: The famed chef's vegetable dish that tastes true to the season: FAVAS AND SUGAR SNAP PEAS WITH POTATOES AND TARRAGON
May 10, 2012
Sergei L. Loiko: Putin sends warning to U.S., NATO in Victory Day speech at Red Square
Mary Rourke: How being a 'mentch' got Vidal Sasoon his start and fighting in Israel's War of Independence provided him with confidence and a strong sense of his own identity
Jeff Bertolucci: Get Home Phone Service for Less Than $10 a Month
The Kosher Gourmet by Betty Rosbottom: Gleaming with its golden, crimson, and snowy white hues, this silken smooth and creamy STRAWBERRY ORANGE TRIFLE looks impressive, but is easy to prepare
May 9, 2012
Sharon Palmer, R.D. How you can reduce your risk -- or delay -- chronic diseases associated with aging
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Jewish World Review
Perform, Then Pay, Part II
By
Rabbi Dr. Asher Meir
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http://www.JewishWorldReview.com |
Q. I'm thinking of giving my workers an incentive by paying them according to their output. Are there any Jewish lessons for this question?
A. We pointed out last time that while paying workers according to output can be an effective way of increasing effort and can also have positive ethical consequences, it also has many ethical pitfalls. Last time we talked about output, and income, suffering for reasons beyond the worker's control, and the problem of sabotaging cooperation. This week we will continue with two other considerations we mentioned briefly:
- Workers may end up favoring output over quality, leading to declines in product quality;
- Workers may end up favoring output today over output tomorrow, and scrimp on maintenance etc. in order to reap bonuses in the short run.
The problem of distortionary incentives presented itself in ancient times, particularly in the context of sharecropping. Very often landowners were unable to or uninterested in farming all their land by themselves or using hired workers, and rented out the land to sharecroppers. In order to give the farmer an incentive to work hard and produce a large crop, a sharecropper is given a fixed fraction of the crop, which varies depending on market conditions. This arrangement persists in various forms even today.
The mishna and Talmudic discussion in the ninth chapter of tractate Bava Metzia examine in detail the arrangements that developed to manage the conflicting incentives in leasing land. The same conflicts exist today, and can be managed using similar management techniques.
MAINTENANCE
One problem with this arrangement is that the sharecropper may neglect maintenance or be indifferent to depreciation of the land. The depreciation is borne by the owner.
The chapter begins with the following mishna:
One who leases a field from his fellow: where it is customary to gather, he must gather; to uproot, he must uproot; to plow after [harvesting], he must plow; everything is according to local custom.
While an owner-operator is free to make his own decisions about the way to cultivate his field, a sharecropper will be tempted to take shortcuts that will affect output in future years. For example, he may want to neglect plowing over the field after the harvest, since this will only affect yields in the following year or years.
Another problem is producing in a way that depletes the field, which in a modern business context might express itself as increased depreciation.
One who leases a field from his fellow [on the condition] to plan barley, may not plant wheat [which depletes the field more]. To plant wheat, he may plant barley.
The sharecropper is entitled to exercise a certain amount of judgment regarding what to plant; indeed, one object of the sharecropper relationship is to decentralize and allow him to take advantage of his own familiarity and expertise. But this cannot be at the expense of the long-term viability of the field.
Even in the middle of the season a sharecropper may decide it is not worth his while to invest in a good crop since he only enjoys part of the yield. Thus even intra-season maintenance is regulated:
One who lets a field from his fellow and doesn't want to weed, and says [to the owner]: What do you care, since I give you your rental? We don't accept his claim, for [the owner] can say to him: Tomorrow you may leave, and it is left with weeds.
LONG TERM RELATIONSHIP
The mishna equally recognizes that these issues are partly overcome by creating a long-term relationship:
One who lets a field for few years may not sow flax, and is not entitled to sycamore branches. If he leases it for seven years, he may sow flax the first year, and he is entitled to sycamore branches.
If the field is leased for a long time, then the sharecropper will feel himself the negative effects of the flax, which depletes the field. So this decision can be left for him.
Another potential problem is that quality could be compromised. While the sharecropper shares some of the cost of reduced quality, some is borne by the owner.
LACK OF EFFORT
Another possibility of monetary incentives is that they may backfire. A regular employee faces a take-it-or-leave-it situation. If he doesn't do everything demanded of him he gets fired. But an "incentivized" employee has a choice. He can work harder than usual and get more, but he can also decide to work less hard and get less. The mishna deals with this problem by obligating the tenant to farm the land as long as it has some minimal potential:
One who leases a field from his fellow and it didn't produce [much]: if there is enough to assemble a stack, he is obligated to tend it.
This bears an interesting reciprocal relationship with the previous consideration. In order to overcome some of the other incentive problems, there may be a desire to lock the employee into a long-term relationship. Yet this "solution" can create its own problem of under-incentivization.
As we emphasized last week, these considerations do not imply that performance-related-pay is always a bad idea. On the contrary, the sharecropper relationship was a very popular and widespread arrangement. The lesson we do learn is that these arrangements require careful thought to manage the conflicted incentives involved.
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JWR contributor Rabbi Dr. Asher Meir, formerly of the Council of Economic Advisers in the Reagan
administration, is Research Director of the Business Ethics Center of Jerusalem, Jerusalem College of Technology.
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© 2009, The Jewish Ethicist is produced by the JCT Center for Business Ethics
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