M18-S3 - Performance Related Rewards

We started this session discussing the Different models of profit:

• The economic concept of profit
• The accounting concept of profit

M18-S3 - Audio - Performance Related Rewards

This difference is important to understand to be able to design the right performance rewards. Problems in designing performance related rewards are:

• Accounting Myopia, where investments that benefit the company longer term are postponed to generate shorter term accounting profit.
• Controllability of results
• ROI as a performance related reward

We watched this TED talk: