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.     

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.     

When do thick venture capital markets foster innovation? An evolutionary analysis

In this paper, we examine the trade off between different effects of the availability of venture capital on the speed of technological progress in an industry. We consider an evolutionary industry simulation model based on Nelson and Winter (1982), in which R&D efforts of an incumbent firm generate technological know-how embodied in key R&D employees, who might use this know-how to found a spinoff of the incumbent. Venture capital is needed to finance a spinoff, so that the expected profits from founding a spinoff depend on how easily venture capital can be acquired. Accordingly, thick venture capital markets might have two opposing effects. First, incentives of firms to invest in R&D might be reduced and, second, if spinoff formation results in technological spillovers between the parent firm and the spinoffs, the generation of spinoff firms might positively influence the future efficiency of the incumbent’s innovation efforts. We study the manner in which this tradeoff influences the effect of venture capital on innovation expenditures, speed of technological change and evolution of industry concentration in several scenarios with different industry characteristics.     

Operational performance of U.S. public rail transit and implications for public policy

In today's tough economic environment, governments at all levels face significant budget shortfalls and public rail transit systems must compete with other public services for government subsidies. It is critical that public rail transit systems be concerned with their operational performance and efficient use of resources. In this paper, we develop a methodology that measures a rail transit system's performance relative to that of other rail transit systems, compares its performance to an appropriate efficient benchmark system, and identifies the sources of its inefficiency. We analyze the relationship between public subsidies and operational performance of public rail systems and show an inverse relationship between subsidization and efficiency.