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All these problems are evergreen. However, three modern trends are making them worse. The first is the enthusiasm for rewarding employees for performance. This is driven by the reasonable insight that paying everyone the same spurs no one to excel. Alas, paying for performance can also have perverse consequences. Banks that pay big bonuses for big profits give traders an incentive to take big risks. Institutions that reward relative performance (ie, did you perform better than your colleagues?) encourage unscrupulous co-workers to sabotage each other. Dancers at the Bolshoi are paid primarily according to the amount of time they spend on stage, so an understudy may not be completely heartbroken if the lead ballerina breaks an ankle.



