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Thank you for sharing Chris!

Any chance the book provides an x-axis title for that chart? It would be very helpful to know the units of time passing as the perceived value decreases.

If those units are months or years to would be much less dramatic than minutes or days.

I was hoping someone would ask that question. While it's not definitive, my best interpretation, based on what I read - is that this "decay" time is represented in days. I secretly wished that it were months, since then I probably wouldn't feel quite so much shame regarding the approximately five (5) months that separate the end of our performance management cycle - and when we finally get around to delivering the resulting outcomes (payments) to our employees - which you can assume was at least partly the source of my inspiration for the segment hinting at just setting $20 million on fire.

That fits with my experience that $100 delivered immediately earns as much appreciation as $500 delivered three weeks later.

Ah, sometimes this isn't discussed. However, customers feel it every day.


I had the same question as Ian, and I too hoped that the axis was not in days! I suspect that there is a correlation between the magnitude of reward on the y-axis and the decay on the x-axis.

To that point, I noticed that the Wiki page you linked talked about the value of the Smaller, Sooner Reward (SSR). This is an interesting corollary to your metaphor of burning money. It suggests that we can save money if we act faster. Instead of $5,000 per employee, I could spend $1,000 - if I can shorten the time delay.

So, for a fixed budget, I can have more options. (I am not advocating giving awards to 50,000 employees in your example, rather that you could have much more differentiation among the 10,000.)

So, all-in-all, another great post.

Out of curiosity, do you think that the same phenomenon is present with respect to time-off awards?

Yes, so that time-delay phenomenon cuts both ways, as you correctly pointed out. Recognition (sorry, EFFECTIVE recognition . . ) delivered more expeditiously, may in fact represent a "discount" for the employer, if it gets to the employee promptly. Who knew?

On the question of a more non-monetary award (time-off award, baseball tickets, dinner coupon, etc.), I think there's a different psychology and perception to all of that - and I think that's attributable almost exclusively to the fact that non-monetary recognition is not "convertible" in the same manner as cash - and consequently can't be exchanged as readily for a loaf of bread, or jar of peanut butter, up the street at the local Safeway.

And to pull the thread on this topic a little further, in an area I had not originally contemplated, there's apparently a relevant tangent to the issue of the effectiveness of executive compensation. I can thank another reader who was nice enough to forward me a link to an upcoming article in the Harvard Business Review (https://hbr.org/2016/10/the-case-against-long-term-incentive-plans).

This article makes perfect sense, given the central topic of both our articles (although I wrote mine first . . . I swear).

Extra time off ... hmmmm. Wonder what the message is to the employee rewarded for doing good work by being released from work?

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