The pay-for-performance dilemma

To recapitulate briefly, I believe that the basis for most of the problems we have with merit pay plans is the fact that the great majority of people think their own job performance is above average. Even a well-administered merit pay plan cannot give positive feedback to this majority. The consequence is likely to be that the individual's self-esteem is threatened. Too often one copes with such a threat by demeaning the importance of the job or by derogating the source—that is, disparaging the boss or management in general.In addition, merit pay emphasizes the direct relationship between job performance and dollar rewards, thereby detracting from intrinsic motivation in the work itself. A system that would switch the emphasis to rewards for self-development and opportunities for greater responsibility would seem to serve both individual and organizational goals in a more effective manner.     

On the desirable degree of flexibility of exchange rates

Zusammenfassung Zur Frage der optimalen Wechselkurs-Flexibilit?t. — Im Text und in der Tabelle wird erkl?rt, welche Kombinationen von Wechselkurspolitik, Nachfragesteuerung und Einkommenspolitik geeignet sind, Zahlungsbilanzungleichgewichte zu korrigieren, die sich aus binnenwirtschaftlichen Expansions- oder Kontraktionsprozessen ergeben (F?lle I–IV), und welche Kombinationen geeignet sind, binnenwirtschaftliche Ziele zu erreichen, ohne da\ Ungleichgewichte der Zahlungsbilanz geschaffen oder verst?rkt werden. Zu den binnenwirtschaftlichen Zielen, die in diesem Rahmen behandelt werden, geh?ren die Milderung oder Neutralisierung importierter Kontraktions- und Expansionsprozesse (F?lle V–VIII), hausgemachter Unterbesch?ftigung oder übernachfrage (F?lle IX und X) und binnenwirtschaftlich verursachter Konjunkturschwankungen (F?lle XI und XII). Au\erdem wird gezeigt, welche Kombinationen der Wechselkurspolitik mit der Geld- und Einkommenspolitik geeignet sind, eine importierte Inflation zu bek?mpfen und das reale Wirtschaftswachstum zu beschleunigen oder zu verlangsamen, ohne da\ unerwünschte Zahlungsbilanzungleichgewichte entstehen (F?lle XIII–XV).

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Résumé Le degré désirable de la flexibilité des cours des changes. — Le texte et le tableau expliquent quelles combinaisons de politique des cours des changes, politique monétaire-fiscale, et politique du revenu sont propres à empêcher ou corriger les déséquilibres de balance des paiements, déséquilibres qui résultent d’expansions ou de contractions à l’intérieur (les cas I à IV), et quelles combinaisons de ces politiques peuvent — sans créer ou aggraver des déséquilibres de balance des paiements — servir à atteindre des objectifs nationaux tels que l’atténuation ou la neutralisation des expansions ou contractions importées (cas V à VIII), le sousemploi ou la demande excessive à l’intérieur (cas IX et X), et les fluctuations de conjoncture causées à l’intérieur (cas XI et XII). Ensuite, il est démontré que d’autres combinaisons de ces trois politiques peuvent réduire une inflation importée et accélérer ou ralentir l’accroissement économique sans causer des déséquilibres indésirables de la balance des paiements (cas XIII à XV).

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Resumen El grado deseable de flexibilidad en los tipos de cambio. — En el texto y el cuadro se explica, con qué combinatión de política cambiaria, política de demanda y politica de ingreso pueden corregirse desequilibrios de la balanza de pagos, que resultan de procesos interiores de expansión y contractión (casos I–IV), y qué combinaciones se prestan a la consecución de objetivos económicos domésticos, sin que surjan o se acrecienten desequilibrios de la balanza de pagos. Entre los objetivos domésticos que se consideran aquí figura la reductión o neutralization de procesos importados de contracción y expansión (casos V–VIII), de subempleo o exceso de demanda de origen doméstico (casos IX y X) y de fluctuaciones coyunturales provocadas desde adentro (casos XI y XII). Además se ense?a qué combinaciones de política cambiaria y de políticas monetaria y fiscal pueden combatir una inflatión importada y acelerar o retardar el crecimiento económico sin que surjan desequilibrios indeseados de la balanza de pagos (casos XIII–XV).

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Riassunto Il grado desiderabile della flessibilità dei cambi. — Nel testo e nella tabella vengono spiegate quali combinazioni di politica dei cambi, regolazione della domande, e politica dei redditi sono adatte a correggere squilibri della bilancia dei pagamenti che risultano da processi economici interni de espansione o di contrazione (casi I–IV) e quali combinazioni sono adatte a raggiungere obiettivi economici interni senza che siano creati o rafforzati squilibri della bilancia dei pagamenti. Degli obiettivi economici interni, che sono trattati in questo ambito, fanno parte l’attenuazione o neutralizzazione di importati processi di contrazione e espansione (casi V–VIII), sottoccupazione o eccesso di domanda fatti in casa (casi IX e X) e variazioni congiunturali causate all’interno (casi XI e XII). Inoltre vengono mostrate quali combinazioni della politica dei cambi con la politica monetaria e dei redditi sono adatte a combattere un’inflazione importata e ad accelerare o ritardare l’espansione economica reale senza che sorgano indesiderati squilibri della bilancia dei pagamenti (casi XIII–XV).

     

Biofuels technology development in Southern Africa

ABSTRACT

The benefits of biofuels depend on the feedstock, conversion pathway and local context. This paper assesses biofuels technology readiness and developments to provide foresight to biofuels development in Southern Africa. Efficient conversion pathways, coupled with biomass from waste or high-yielding energy crops, will reduce both the costs of biofuels production, and the environmental impacts. Compared to petroleum fuels, the current commercial biofuels (ethanol, biogas and biodiesel) typically offer carbon emission reductions of 30–50% but are marginally more expensive. The extent of biofuels market penetration will therefore be influenced by mandates (blending targets) and subsidies (green premium). Advanced biofuels promise greater efficiencies and carbon emission reductions at reduced cost but will require further research and development to reach commercialisation. If developed appropriately, biofuels can reduce carbon emissions and improve energy security, while enabling sustainable agriculture and improved natural resources management.     

Correlates of Narrow Bracketing

Behavior often deviates from standard predictions because individuals evaluate the consequences of choices separately (i.e., narrow bracketing) rather than jointly. The main existing theories classify different narrow bracketing phenomena as either (i) choice errors caused by cognitive limitations, or (ii) strategies to achieve self‐control. Using an online experiment, we find consistent evidence for theory (ii): mental budgets and narrow goals are related to each other and to measures of self‐control, but are distinct from other forms of narrow bracketing. Evidence for the complementary theory (i) is less consistent: few choice bracketing phenomena are related to each other and to cognitive skills.     

The South African Financial Cycle and its Relation to Household Deleveraging

This paper considers the extent to which South African households have deleveraged, since the global financial crisis of 2007/2008. We extend the official South African Reserve Bank business cycle methodology to date financial cycles, from which we identify the peaks and troughs of the South African financial cycle going back to 1966. Our composite financial cycle index peaks in April 1974, January 1984 and May 2007; it has bottomed out in July 1979 and February 1999. Thus, we still await the trough. We further compare and contrast the deleveraging process in the current downward phase to the experiences from previous financial cycles. We find that the average period of the financial cycle in South Africa is much longer (approximately 17.3 years) than that of the business cycle (approximately 5.8 years), and that deleveraging has not yet matched the degree of deleveraging seen in previous downward phases. Our results suggest that further deleveraging is necessary, before we can expect to turn the financial corner.     

The Way to the Top: Career Patterns of Fortune 100 CEOS

How have the CEOs of Fortune 100 companies worked their way to the top position? Are there several paths to the top, or have most present‐day CEOs moved up the ranks in a similar fashion? We examine the employment trajectories of all of the current Fortune 100 CEOs across their entire working careers to answer these questions. The analysis developed in this article is carried out in two steps. We first use sequence analysis to find the patterns that are characteristic of the career paths of these CEOs . We then apply clustering techniques to identify distinct groups of career paths that have led individuals to the uppermost management level. Our results show that the careers of the Fortune 100 CEOs have largely followed traditional career paths that are symbolized by steady progression toward more responsibility, little mobility between firms and industries, and a strong focus on general management functions. © 2015 Wiley Periodicals, Inc.     

On economic applications of the genetic algorithm: a model of the cobweb type

This paper explores the idea of using artificial adaptive agents in economic theory. In particular, we use Genetic Algorithms (GAs) to model the learning behavior of a population of adaptive and boundedly rational agents interacting in an economic system. We analyze the behavior of a GA in two versions of a model of the cobweb-type, one in which firms make only quantity choices, and the other one in which firms first decide to exit or to stay in the market, and subsequently decide how much to produce. We present simulations with different coding schemes and interpret the rather surprising differences between the results for different setups by employing the mathematical theory for GAs with state-dependent fitness functions. In particular, we explain the relationship between coding and convergence properties of GAs.     

Creating a global mindset

Why are some companies highly successful in spotting and exploiting global opportunities, while others mismanage them or miss them entirely? The answer could lie in the company's mindset, a topical subject currently doing the rounds at numerous executive education seminars. The term corporate mindset refers to how the company sees the world and how this affects its actions. For companies operating on a global scale, developing a global corporate mindset presents a formidable managerial challenge. The corporate mindset determines to what extent management encourages and values cultural diversity, while simultaneously maintaining a certain degree of strategic cohesion. Developing a global corporate mindset and a group of global managers as its main flag bearers has become a key prerequisite for successfully competing and growing in worldwide markets. © 2000 John Wiley & Sons, Inc.