Keeping Workers Happy with Rewards

How to Keep Workers Happy

Money's nice but public approval from the boss counts for plenty

How workers feel about their work can make the difference between a successful firm and one that cannot keep up with the competition. Workers who do not feel they are valued are often reluctant to innovate, to work harder, to seek to become more efficient. Here come a few advice:

How effective are financial rewards?

Financial rewards are overstated in both practice and in the perceptions of managers in thinking they are the most motivating to employees. There is a lot of evidence that says there are motivational aspects to money, but there is much more power in non-monetary rewards.

Then what are the most effective rewards?

The most motivating rewards tend to be initiated by one's manager and people one works most closely with. The best ones are personal, such as being specifically told in a timely way you did a good job by your manager. Fifty-eight percent of those surveyed said their manager seldom did this.

Second was being told this in writing by your manager. Then something else in writing, such as a note in the personnel file, something put in the company newsletter about you, a thank-you note to the family because your work has taken you away for some time. Public praise also tops the list.

What kind of public praise? It could be as simple as bringing in a tub of ice cream. Ben and Jerry's give away ice cream to employees – two pints a week. To motivate employees you don't need money as much as you need managers to take the time to be thoughtful and creative. The general rule of thumb is you want to praise publicly and reprimand privately.

Praising the winners! Photo by Elena.

What are the benefits of behaving like this to your employees?

They're looking for ways to pay it back, through extra work, ways that can help customers, any number of ways. The reward system is not altruistic at all. You are doing it to get people to perform better. We are not talking about manipulating people, we are talking about finding out what motivates them. The more we do that, the more people want to work with us and do a good job for us.

Should rewards be limited to performance, or are all staff rewarded?

The once that are best, are performance-based. You should start there, but once the philosophy becomes part of your culture, not everything you do has to be performance-based. You can have general moral meetings. There are things you can do to help develop the whole culture. You can set up proposals that encourage people to catch each other doing things right, anyone can give formal praises to anyone else, they get it in writing, they get a plaque, at the end of the year they get dinner with the rest of the plaque winners in the company.

Would you reward management differently?

Motivation is a very personal thing. It changes with where you are in your life, in your career. People yearning $200,000 per year, they want a chance to influence where the company's going. As you work with people who are higher paid and perhaps better skilled, different things tend to motivate them – things like increasing responsibility, increased visibility, ownership, independence and autonomy. You've got to get to everybody. Everybody needs to feel special.

Unvarnished Look at Steroids

An Unvarnished Look at Steroids

Testosterone boosters have a place, but it’s not on the playing fields

Taking steroids to build muscle and improve athletic performance is a dangerous habit for hundreds of thousands of young people. The nation’s leading experts on the subject explain the risks.

What are steroids? – They are synthetic derivatives of the primary male sex hormone, testosterone. Correctly called anabolic-androgenic steroids, they have both an anabolic (tissue-building) effect and an androgenic (masculinizing) effect. The primary use of steroids is in replacement therapy for men whose testes are not producing normal levels of testosterone and for kids who suffer delayed onset of puberty. Some physicians are giving them to AIDS patients to help maintain body eight and appetite. Other uses currently under evaluation include treatment for men over 50 to maintain strength, and as a male contraceptive.

Why do athletes take steroids? – To increase muscle mass and to increase strength – and to train longer, more frequently, and with more intensity. Although no study has demonstrated this last purported effect, most athletes who have used or are using steroids have reported this.

So what’s wrong with taking steroids? – First of all, it’s cheating. When you go into a contest, there is a commitment to play by the rules; every sport federation prohibits the use of these drugs. It’s against federal law, and very state bars using them for nonmedical purposes. Distributing is a felony and possession can get you into jail.

In addition, tests show that if you administer testosterone to mice, it increases their aggressive behavior. Aggression among steroid users is not consistently demonstrated in all studies, but 90 percent of the steroid users report feelings of increased aggression. Whether steroids cause fits of rage, known as « roid rage, » is yet to be determined.

What about physical dangers? – The long-term effects aren’t clear. A handful of cases associate steroids with cardiomyopathy, which is when the heart muscle stops functioning and requires a heart transplant. Steroids have also been found to have a deleterious, but temporary, effect on liver function; when you go off the drug, the liver returns to normal. Anabolic steroids, taken orally, have also been associated with nonmalignant liver tumors.

Unvarnished look at steroids. Photo by Elena

Steroids use effects the reproductive tract as well. When the hypothalamus gland detects high levels of testosterone, it shuts off the portion of the endocrine system that produces testosterone and sperm. In males that have a predisposition to baldness, balding will be accelerated. Some users may have scarring acne, and males can grow fibrous tissue under the nipple, causing the appearance of small breasts.

In addition, the drugs have been tentatively linked to an increased risk of strokes or heart attacks during use, not later. And finally, based on clinical experience, it is believed that young adolescents taking these drugs could permanently and prematurely close their growth plates.

How are women affected by steroids? – About 80,000 women have used steroids every year. Among high school seniors, between a 1/2 and 2 percent of girls have reported using steroids at some time. Small amounts will have a profound effect on women. Use will shrink the breast tissue, cause male-pattern hair growth and baldness, deepening of the voice, clitoral enlargement, and cessation of the menses. Many of these effects are irreversible

Microeconomics

Microeconomics

Microeconomics is the branch of economics dealing with the economic matters of the individual or firm. Microeconomists would deal with such issues as a firm’s break even point, its fixed and variable costs, and if and when a firm should cease its operations.

Microeconomics also accords importance to types of markets, logically since the niche a business occupies determines its pricing policies. In a competitive market, no particular company has any power as to price setting. In that sense, firms are price takers; price is determined by the market (demand and supply). An exception is if the firm is able to distinguish itself by its product, if the product is unique, then the producer has some say. Any one firm is free to enter and exit the industry.

A monopolistic market has a few firms; it is in between a competitive market and a perfect monopoly. Monopolistic industries have barriers to entry, limiting the number of firms that have access to the market niche. A perfect monopoly has decision-making power over prices it sets, since it is the industry. In some countries, such as Canada, there are laws to protect the population from abuse that could stem from such a situation, but in developed countries there usually are few troubles due to monopolies.

An important part of economics is game theory, or how individuals make strategic decisions. A known conundrum in this theme is better known as the Prisoner’s Dilemma, and is thought in introductory political science as well as economics courses. Two prisoners are being interrogated and face serious charges, but there is insufficient evidence against them. If both keep quiet, they both go free. If one talks while the other says nothing, the one who talked gets a lighter sentence and his duped companion gets a heavier one. If they both talk, they both get a medium sentence.

Economics. Economics is extremely useful as a form of employment for economists (John Kenneth Galbraith). Megan Jorgensen (Elena)

In this case, the dominated strategy would be to remain quiet. There is the problem of trust and that they cannot communicate with each other, but more importantly to talk would be better for either of them, because it would reduce the burden of consequences. The Nash equilibrium is for both to betray their accomplice. The Nash equilibrium refers to the actions of players in a game that strategically take into account the other players’ likely moves. The paradigm is often used in economics when firms set prices.

Utility is also a microeconomic concept, it refers to the amount of happiness one derives from an activity, measured in utils. Utils decrease with each repetition of the activity, called diminishing marginal utility. One encounters such decreasing utility when one compares the amount of pleasure derived from the first cookie after one has been hungry for many hours, to cookie number 48 long after one has achieved satiation.

The author makes an interesting point about the relation between problem solving in academia and the real business world (Porter, 1998). He points out that geographical parameters all but vanished from his contemporaries’ economic analysis, due to globalization and its impact on productivity growth. Outsourcing attenuated the significance of location without eliminating it.

He takes a rather optimistic approach, suggesting that almost any industry business can achieve success with the correct methodology and if they sell something that is unavailable elsewhere.

Further, a firm’s prosperity depends on its securing of resources such as human capital, a condition that is conducive in Quebec given the province’s education policy. Although many (Universite du Quebec a Montreal) UQAM and UdM (Universite de Montreal) students protested Harper’s budget adjustments, tuition for residents is much more affordable than the United States.

Geography preconditions transportation, which along with technology add to the list required elements. Defining clusters as a conglomeration of firms in related industries, Porter mentions the examples of Wall Street, Hollywood and High Point for the United States, perhaps for French Canada the correspondents would be Mont-Tremblant and Montreal’s interconnected underground shopping malls network. Cluster theory outlines gains such as improvements in information flow, reduced transaction cost, and the old strength of numbers rule. Thus, the article conveys the argument that clustering provides a competitive advantage, despite the superfluous competition that other companies entail.

Reference:

Porter, M.E. (1998). The Adam Smith address: Location, clusters, and the “New” microeconomics of competition. National Association for Business Economics, January, 7-13.

Microeconomics: Real World

The author makes an interesting point about the relation between problem solving in academia and the real business world (Porter, 1998). He points out that geographical parameters all but vanished from his contemporaries’ economic analysis, due to globalization and its impact on productivity growth.

Outsourcing attenuated the significance of location without eliminating it. He takes a rather optimistic approach, suggesting that almost any industry business can achieve success with the correct methodology and if they sell something that is unavailable elsewhere.

Further, a firm’s prosperity depends on its securing of resources such as human capital, a condition that is conducive in Quebec given the province’s education policy. Although many (Universite du Quebec a Montreal) UQAM and UdM (Universite de Montreal) students protested Harper’s budget adjustments, tuition for residents is much more affordable than the United States.

Geography preconditions transportation, which along with technology add to the list required elements. Defining clusters as a conglomeration of firms in related industries, Porter mentions the examples of Wall Street, Hollywood and High Point for the United States, perhaps for French Canada the correspondents would be Mont-Tremblant and Montreal’s interconnected underground shopping malls network.

Cluster theory outlines gains such as improvements in information flow, reduced transaction cost, and the old strength of numbers rule.  Thus, the article conveys the argument that clustering provides a competitive advantage, despite the superfluous competition that other companies entail.

Reference:

Porter, M.E. (1998). The Adam Smith address: Location, clusters, and the  “New” microeconomics of competition. National Association for Business Economics, January, 7-13.

Many of us like to think of financial economics as a science, but complex events like the financial crisis suggest that this conceit may be more wishful thinking than reality (Andrew Lo). Photo: Megan Jorgensen (Elena)

Seven Steps to a Greener Lifestyle

Seven Steps to a Greener Lifestyle

Many people are looking to take action to improve the environment, whether it’s at home, work or in their communities. In order to ease into eco-friendly lifestyle, try adopting a new green practice each day of week. Indeed, with a few simple changes in our daily routine, we can significantly reduce our carbon footprint:

Monday: Walk it out! Reduce your carbon footprint by walking or biking to pick up last minute items.

Tuesday: Green your caffeine. Consider purchasing a travel mug or tumbler to cart your coffee to work. In Canada, many coffee shops offer a discount on your morning java if you bring your own thermos.

Wednesday: Go paperless. Look for ways to cut down on printing. At work, consider sending information via email. If you must, print double-sided and make sure to use recycled paper. At home conduct your banking online. Consider purchasing a chalk broad so the family can jot down to-do lists and keep track of activities paper free.

Green Lifestyle. Photo by Elena

Thursday: Keep the pedal off the metal. Taking your foot off the pedal can do more than save you from a speeding ticket. Driving the speed limit on the highway not only saves gas, it produces less smog.

Friday: Avoid the super soaker. Instead of soaking in the tub, take a short shower. Showers use far less water than bath making them friendly on the environment and your wallet.

Saturday: Clean naturally. Before rolling up your sleeves and diving into your summer cleaning, pick up cleaning products that are made with plant-based, biodegradable cleaning ingredients. For example, Green Works line natural cleaners are a great option as they remove dirt and grime without leaving harsh chemical fumes and residues behind.

Sunday: Let Mother Nature dry your clothes. Make use of a sunny day and line-dry your laundry. Clothes dryers are one of the most energy inefficient household appliances.

(West End Times)

The Crash of 1929

The Crash of 1929

Wall Street Lays en Egg

On September 3, 1929, the market averages reached a peak that was not to be surpassed for a quarter of a century. The “endless chain of prosperity” was soon to break; general business activity had already turned down months before. Prices drifted for the next day, and on the following day, September 5, the market suffered a sharp decline known as the “Babson Break”.

This was named in honor of Roger Babson, a frail, goateed, pixyish-looking financial adviser from Wellesley, Massachusetts. At a financial luncheon that day he had sad. “I repeat what I said at this time last year and the year before, that sooner or later a crash is coming.” Wall Street professionals greeted the new pronouncements from the “sage of Wellesley,”, as he was known, with their usual derision.

As Babson implied in his statement, he had been predicting the crash for several years and he had yeat to be proven right. Nevertheless, at two o`clock in the afternoon, when Babson`s words were quoted on the “broad” tape (the Dow Jones financial-news tape, which is an essential part of the furniture in every brokerage house across the country), the market went into a nosedive. In the last frantic hour of trading, two million shares changed hands – American Telephone and Telegraph went down six points, Westinghouse – seven, and U.S. Steel – nine points. It was a prophetic episode, and after the Babson Break the possibility of a crash, which was entirely unthinkable a month before, suddenly became a common subject for discussion.

Confidence faltered. September had many more bad that good days. At times the market fell sharply. Bankers and government officials assured the country that there was no cause for concern. Professor Irving Fisher of Yale, one of the progenitors of the intrinsic-value theory, offered his soon-to-be-immortal opinion than stocks had reached what looked like a “permanently high plateau”.

Eggs. Wall Street Lays en Egg. Illustration by Elena

By Monday, October 21, the stage was set for a classic stock-market break. The declines in stock prices had led to calls for more collateral from margin customers. Unable or unwilling to meet the calls, these customers were forced to sell their holdings. This depressed prices and led to more margin calls and finally to a self-sustaining selling wave.

The volume of sales on October 21 zoomed to over 6 million shares. The ticker fell way behind, to the dismay of the tens of thousands of individuals watching the tape from brokerage houses around the country. Nearly an hour and forty minutes had elapsed after the close of the market before the last transaction was actually recorded on the stock ticker.

The indomitable Fisher dismissed the decline as a “shaking out of the lunatic fringe that attempts to speculate on margin”. He went on to say that prices of stocks during the boom had not caught up with their real value and would go higher. Among other things, the professor believed that the market had not yet reflected the beneficent effects of Prohibition, which had made the American worker “more productive and dependable”.

On October 24, later called “Black Thursday,” the market volume reached almost 13 million shares. Prices sometimes fell $5 and $10 on each trade. Many issues dropped 40 and 50 points during a couple of hours. On the next day, Herbert Hoover offered his famous diagnosis: “The fundamental business of the country… is on a sound and prosperous basis.”

Tuesday, October 29, 1929, was among the most catastrophic days in the history of the New York Stock Exchange. Only October 19 and 20, 1987, rivaled in intensity the panic on the Exchange. Over 16,4 million shares were traded on that day in 1929 (a 16-million-share day in 1929 would be equivalent to something like a billion-share day in 1990 because of the greater number of shares now listed on the New York Stock Exchange). Prices fell almost perpendicularly, and kept in falling, as is illustrated by the following table (in the end of this text), which shows the extent of the decline during the autumn of 1929 and over the next three years. With the exception of “safe” AT&T, which lost only three-quarters of its value, most blue-chips stocks had fallen 95 percent or more by the time the lows were reached in 1932.

Perhaps the best summary of the debacle was given by Variety, the show-business weekly, which headlined the story, “Wall Street Lays en Egg”. The speculative boom was dead and billions of dollars of share values – as well as the dreams of millions – were wiped out. The crash in the stock market was followed by the most devastating depression in the history of the country.

Security, High prices September 3, 1929, Low prices November 13, 1929, Low price for year 1932:

American Telephone and Telegraph Company:

High prices September 3, 1929 – 304

Low prices November 13, 1929 – 197 ¼

Low price for year 1932 – 70 ¼

Bethlehem Steel:

High prices September 3, 1929 – 140 3/8

Low prices November 13, 1929 78 ¼

Low price for year 1932 – 7 ¼

General Electric:

High prices September 3, 1929 – 396 ¼

Low prices November 13, 1929 – 168 1/8

Low price for year 1932 – 8 ½

Montgomery Ward:

High prices September 3, 1929 – 137 7/8

Low prices November 13, 1929 – 49 ¼

Low price for year 1932 – 49 ¼

National Cash Register:

High prices September 3, 1929 – 127 ½

Low prices November 13, 1929 – 59

Low price for year 1932 – 6 ¼

Radio Corporation of America:

High prices September 3, 1929 – 101

Low prices November 13, 1929 – 28

Low price for year 1932 – 2 ½

Sources:

Burton G. Malkiel. A Random Walk Down Wall Street, including a life-cycle guide to personal investing. First edition, 1973, by W.W. Norton and company, Inc