8 Apr 2010

When The Reward Is Great, The Effort To Succeed Is Great

This parable is all over the Internet, yet I heard about it just yesterday.  I think it's telling when you review your firm's successes and sit down to determine staff compensation.

As the late Adrian Rogers said, "you cannot multiply wealth by dividing it."
 
An economics professor at a local college told his class that socialism was destined to ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. 

That class had insisted that in a socialist economy, no one would be poor and no one would be rich --- a great equalizer. Everyone could be successful.

The professor said, "OK, we will have an experiment in this class on socialism".  All the grades on each test in the class would be averaged and everyone would receive the same grade.  

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset, and the students who goofed off were very happy. 

As the second test rolled around, the students who studied little had studied even less, and the ones who studied hard decided they wanted a free ride too, so they studied little.  The second test average was a D.  No one was happy. 

When the 3rd test rolled around, the average score was an F!

The scores never increased after that as bickering, blame and name-calling all resulted in hard feelings, and no one would study for the benefit of anyone else.  As a result, everyone in the class got an F for the semester.