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Behind the Business Bust
June 24, 2009
It's good to pinpoint blame when you're suffering. Plus it's good to know what went wrong so it doesn't happen again (at least any time soon).
With that in mind, Aubrey C. Daniels' new book, "OOPS! 13 Management Practices that Waste Time and Money (and what to do instead)," may be worth passing along to your staff. The book uses behavioral science—the same discipline behind behavioral economics, the field embraced by the Obama administration and a growing number of economists—to assess and attempt to correct management mistakes, including:
• Downsizing: Lay-offs offer a short-term fix, but in the end they fix little. What they do is decrease morale and reduce productivity, says Daniels. It's better to ask all employees to participate in the process of making the organization efficient and effective.
• Annual Bonuses: A year-end lump sum that's not tied to a specific achievement does nothing to promote loyalty and top-notch performance, he says. Companies need to break the bonus habit, the author stresses.
• Over-valuing smart, talented people: The banking and mortgage crisis revealed that smart, talented people can quickly learn bad behavior, says Daniels. The author demonstrates why you should already have many smart, talented people, and why money and time are better spent developing the people you have rather than trying to entice and buy 'talent.'
• Automatic pay raises: Don't reward employees for simply showing up; pay raises should be performance-based, not automatic, Daniels recommends.
"If there's a silver lining to the economic crisis," the author notes, "it's that it offers a once-in-a-lifetime opportunity to rethink and reform the way we run our organizations, using an approach grounded in science and research rather than dubious habits. By using the insights of behavioral science to understand and improve the performance of individuals, we can transform our organizations, and put our economy back on the right track."
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