“The Enthusiastic Employee” Author Interview

Here’s a very interesting interview with one of the authors of “The Enthusiastic Employee”. Updated 12/2/2006: Apparently you now have to sign up to view the interview. Here’s a tidbit of the interview to let you know if you want to sign up for a free account:

Knowledge@Wharton: Your research shows most workers are happy at a new job for about six months before the honeymoon ends. What goes wrong?

Sirota: We are often asked how to motivate employees. Our response is, that’s a silly question. The real question is: ‘How do you keep management from destroying motivation?’ When we look at the data we find that people coming to a new job are quite enthusiastic. Most of them are very happy to be there and looking forward to meeting their new coworkers. But as you study the data you find morale, or enthusiasm, declines precipitously after five or six months. One theory is that there is a natural honeymoon that is bound to end. And yet we find that in 10% of companies the honeymoon continues throughout a worker’s entire career. So there are organizations that are able to maintain enthusiasm.

As a general proposition it is hard to be enthusiastic about an organization that is not enthusiastic about you. Let’s look at a few specific things. One is job security. We expect employees to be enthusiastic, loyal and engaged in an organization, but with the slightest downturn or prospective downturn we get rid of them. They are expendable. They are treated like paperclips. How can you be loyal and committed to an organization that seems to have absolutely no concern about your job?

“The Enthusiastic Employee” at Amazon.

Article Clipping on the Internet

How many times have you been reading a print magazine and run across an article that would be of intense interest to one of your friends? This happens to me often, and when it does, I either rip out the article or give the magazine to my buddy (if it’s my magazine) or make a copy of the article, if I’m in the public library.

I also subscribe to Salon.com, a liberal online news magazine. On Sunday, I was talking to my mother about health issues and mentioned that today’s kids are the first generation to have a shorter life expectancy than their parents. This was from Growing Up Too Fat a recent Salon article. Like most of the articles, it was considered, well written, and entirely inaccessible to non subscribers. I would have loved to shot my mother the link to the article. This would have introduced her to Salon and its excellent journalism. However, I couldn’t do this easily because to view the article she’d either have to be a subscriber or view a commercial, neither of which she’d be willing to do.

Why isn’t the analog of the print article copying that we all have done available? I can think of a technical solution right off the top of my head that would generate a one time link that could only be used for a specific article (preventing someone from handing out subscriptions) and only once (preventing someone from posting the link to slashdot). My mother win, since she gets useful information via a reliable source (me). And Salon wins, because they’ve just gained exposure and also made me a happier subscriber.

There’s no reason why this same technology can’t be applied to any website that has subscription based revenues. Other than the development and the incremental bandwidth cost, it’s free to the website, and it exposes the website in a positive light to people who are, by definition, not subscribers.

Book Review: Saving Capitalism From the Capitalists

If you’ve seen ‘Meet the Fockers,’ you probably remember the scene where Greg’s parents have constructed a shrine to him, full of 8th place medals and the odd 10th place ribbon. Greg apparently didn’t do too well in competition, but his parents loved him anyway. Not everyone is so forgiving, and most people had competition. To rephrase that, most people hate losing at competition–winning is just fine, thank you very much. In a free market system as well, most firms and people don’t like competition–it forces firms to respond to customers and people to work harder. However, the overall benefits to society are larger in a system where everything is competitive.

Saving Capitalism from the Capitalists, by Rashuram Rajan and Luigi Zingales, examines competition from an academic perspective, choosing to focus on financial markets. As you’d expect from two economics professors, they argue that markets are the most powerful economic invention of all time, and the solution to many problems facing us today is to make them more prevalent. However, the central thesis of their book is that markets depend on governments for vital infrastructure (rule of law, contracts, etc) and thus depend on politics. Because of the nature of politics the interests of a focused few can outweigh the interests of a diffuse many. This means that government regulation of markets can be easily hijacked by those with disliking competition to smother it.

The authors examine many cases where this hijacking occurred, from developed and developing countries and many different time periods. They focus on finance because free flow of capital has a magnifying effect on competition since upstart produces of goods often need capital. The focus is on incumbent firms, who are usually the party with the will and ability to influence the government to put the needs of the few over the needs of the many.

Other issues they tackle include the emergence of financial markets, whether finance benefits the rich disproportinately, and how the free markets of the early 20th century were rolled back in the 1930s and what replaced them.

Well written, if dense, this book would have been average had the last chapter, which proposes solutions to the political vulnerabilty of markets, been omitted. However, with their proposed solutions, which build on the foundation that they laid out in previous chapters, I feel that this book is a useful read for anyone interested in knowing how the world works and might work better. In addition, I think it’s wise and brave of them to trumpet that current markets aren’t really free but instead are usually hijacked by powerful incumbent firms. This is something that you don’t hear economists acknowledge often enough.

“Saving Capitalism From the Capitalists” at Amazon.

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