You are the new HR director of a company selling enterprise software. The company hired to you to overhaul the incentive system for newly hired salespeople. Drawing on the insights of prospect theory and other behavioral belief biases we have encountered in this course, list at least 2 features of the incentive scheme that you would design (briefly explain why).
Suppose Calvin and Hobbes are playing the following game. Calvin goes first and picks one of three options, which specifies how much they each get. Hobbes can either accept or reject – if Hobbes rejects they both get nothing.
Option 1: Calvin gets $18 and Hobbes gets $2
Option 2: Calvin flips a coin – if it is heads Calvin gets $18 and Hobbes gets $2; if it is tails Calvin gets $2 and Hobbes gets $18
Option 3: Calvin gets $2 and Hobbes gets $18
a.Would we expect Hobbes to accept Option 1?
b.Would we expect Hobbes to accept Option 2 if he cares mostly about distributive fairness?
c.Would we expect Hobbes to accept Option 2 if he cares mostly about procedural fairness?
Take two of the interventions discussed in the “Process Compliance” section of Class 9, and discuss how they fit into the EAST framework introduced in Class 1. Make sure to choose interventions such that you discuss at least two different EAST categories.
One of the major changes at Tessei was switching the cleaners’ uniforms from pale blue (which blended in with the train) to bright red/pink. Discuss this in the context of operational transparency, and how it relates to the perception of this as a 3K job.
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