Comments on: Piecework, Political Economy and the Internet http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/ Out of the crooked timber of humanity, no straight thing was ever made Sun, 27 May 2012 05:09:40 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Andrew C http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234812 Andrew C Thu, 03 Apr 2008 12:54:14 +0000 http://crookedtimber.org/?p=6782#comment-234812 <i>But how could Wonkette actually reduce the quality of her blog in order to get her own back on Gawker?</i> Obviously no more posts about interns having ana! sex with married senators. But how could Wonkette actually reduce the quality of her blog in order to get her own back on Gawker?

Obviously no more posts about interns having ana! sex with married senators.

]]> By: Barry http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234687 Barry Wed, 02 Apr 2008 18:10:58 +0000 http://crookedtimber.org/?p=6782#comment-234687 And one obvious reason for people to be viewing old posts is that there is some buzz about the topic and/or the blogger. Example - if I had a blog, and became well-known next year, I'd expect a bunch of visits next year to this year's posts. Point two is good - it's in Nick's interest (and indirectly in the interests of all bloggers there) for viewers to move around within that site, once they landed there. And one obvious reason for people to be viewing old posts is that there is some buzz about the topic and/or the blogger. Example – if I had a blog, and became well-known next year, I’d expect a bunch of visits next year to this year’s posts.

Point two is good – it’s in Nick’s interest (and indirectly in the interests of all bloggers there) for viewers to move around within that site, once they landed there.

]]> By: dsquared http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234679 dsquared Wed, 02 Apr 2008 17:49:27 +0000 http://crookedtimber.org/?p=6782#comment-234679 <i>Consider, for instance, all the pageviews of stories you wrote months ago. Should they really count towards your productivity this month?</i> Obviously yes, unless people don't serve advertisements to old posts. Otherwise you're creating an obviously perverse incentive. Consider, for instance, all the pageviews of stories you wrote months ago. Should they really count towards your productivity this month?

Obviously yes, unless people don’t serve advertisements to old posts. Otherwise you’re creating an obviously perverse incentive.

]]> By: Felix http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234639 Felix Wed, 02 Apr 2008 14:43:04 +0000 http://crookedtimber.org/?p=6782#comment-234639 Two points: 1) an increase in pageviews is not necessarily an increase in productivity. Consider, for instance, all the pageviews of stories you wrote months ago. Should they really count towards your productivity this month? 2) The deflation in PVR is not <i>exactly</i> counter to the incentive of the PVR, since the number of bloggers incentivized by the PVR is greater than one. The incentive of the PVR is actually to increase your *proportion* of total pageviews, more than it is to increase the absolute number of total pageviews. In a weird way, it incentivizes bloggers to give their colleagues food poisoning more than it does to increase their own output in line with everybody else. Two points:

1) an increase in pageviews is not necessarily an increase in productivity. Consider, for instance, all the pageviews of stories you wrote months ago. Should they really count towards your productivity this month?

2) The deflation in PVR is not exactly counter to the incentive of the PVR, since the number of bloggers incentivized by the PVR is greater than one. The incentive of the PVR is actually to increase your proportion of total pageviews, more than it is to increase the absolute number of total pageviews. In a weird way, it incentivizes bloggers to give their colleagues food poisoning more than it does to increase their own output in line with everybody else.

]]> By: jackd http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234623 jackd Wed, 02 Apr 2008 13:36:00 +0000 http://crookedtimber.org/?p=6782#comment-234623 Great Zamfir (#16) hit the point I was considering. The deflation in PVR payment is exactly counter to the incentive of the PVR itself. In my own experience, thankfully long, long, ago, the only thing worse than being told the company has decided to lower piecework rates is the insult of a manager saying workers can make up the difference in volume. Great Zamfir (#16) hit the point I was considering. The deflation in PVR payment is exactly counter to the incentive of the PVR itself.

In my own experience, thankfully long, long, ago, the only thing worse than being told the company has decided to lower piecework rates is the insult of a manager saying workers can make up the difference in volume.

]]> By: Barry http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234615 Barry Wed, 02 Apr 2008 12:22:20 +0000 http://crookedtimber.org/?p=6782#comment-234615 "Sow hat’s the problem here? The guy makes nice money, will stand to make less money under the new rules and you need all that explenation to understand why he’s angry? Do you really need anything more to explain this situation?" Posted by Martin Wisse Actually, yes because most of us are Americans, and most Americans feel that a boss scre*wing over his employees is what Made America Great [1], and that interfering with it is Islamofascocommunosocialfemieconazism. [1] Sadly, it probably is. “Sow hat’s the problem here? The guy makes nice money, will stand to make less money under the new rules and you need all that explenation to understand why he’s angry?

Do you really need anything more to explain this situation?”

Posted by Martin Wisse

Actually, yes because most of us are Americans, and most Americans feel that a boss scre*wing over his employees is what Made America Great [1], and that interfering with it is Islamofascocommunosocialfemieconazism.

[1] Sadly, it probably is.

]]> By: John Quiggin http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234614 John Quiggin Wed, 02 Apr 2008 11:07:30 +0000 http://crookedtimber.org/?p=6782#comment-234614 Henry, my wages from CT have increased by 87120 per cent since I started blogging here (not counting my contribution to operating costs). Now I find out pageviews have increased even more. Are you tellng me you've been ripping me off all along? Henry, my wages from CT have increased by 87120 per cent since I started blogging here (not counting my contribution to operating costs). Now I find out pageviews have increased even more. Are you tellng me you’ve been ripping me off all along?

]]> By: Great Zamfir http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234609 Great Zamfir Wed, 02 Apr 2008 10:20:16 +0000 http://crookedtimber.org/?p=6782#comment-234609 Martin, I would say this story is relevant because it is a nice experiment with the kind of performance-based compensations people are trying to implement in many other lines of work too. In most cases, the discussion revolves around the question whether the relevant performance is measurable, but this specific case is interesting because performance measurement is relatively easy, and problems remain. Sure, the guy is complaining about a ay cut, but there is something interesting about his pay cut: the more succesful he is during three months, the higher his paycut at the end will be, forcing him to be even more succesful in the next three months to receive the same salary. This shows how 'performance based' compensation might result in a very different outcome than you would expect. Martin, I would say this story is relevant because it is a nice experiment with the kind of performance-based compensations people are trying to implement in many other lines of work too. In most cases, the discussion revolves around the question whether the relevant performance is measurable, but this specific case is interesting because performance measurement is relatively easy, and problems remain.

Sure, the guy is complaining about a ay cut, but there is something interesting about his pay cut: the more succesful he is during three months, the higher his paycut at the end will be, forcing him to be even more succesful in the next three months to receive the same salary.

This shows how ‘performance based’ compensation might result in a very different outcome than you would expect.

]]> By: Alex http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234606 Alex Wed, 02 Apr 2008 10:10:16 +0000 http://crookedtimber.org/?p=6782#comment-234606 But how could Wonkette actually reduce the quality of her blog in order to get her own back on Gawker? It's not as if there's much there in the first place... But how could Wonkette actually reduce the quality of her blog in order to get her own back on Gawker? It’s not as if there’s much there in the first place…

]]> By: Martin Wisse http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234602 Martin Wisse Wed, 02 Apr 2008 07:28:39 +0000 http://crookedtimber.org/?p=6782#comment-234602 Also, that gravatar thing sucks donkeys through straws. Also, that gravatar thing sucks donkeys through straws.

]]> By: Martin Wisse http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234601 Martin Wisse Wed, 02 Apr 2008 07:28:17 +0000 http://crookedtimber.org/?p=6782#comment-234601 That is, I understand the need for a discipline like economics to be more precise in describing situations like this, but it seems somewhat like arguing about angels dancing on pinheads... That is, I understand the need for a discipline like economics to be more precise in describing situations like this, but it seems somewhat like arguing about angels dancing on pinheads…

]]> By: Martin Wisse http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234599 Martin Wisse Wed, 02 Apr 2008 07:26:13 +0000 http://crookedtimber.org/?p=6782#comment-234599 Sow hat's the problem here? The guy makes nice money, will stand to make less money under the new rules and you need all that explenation to understand why he's angry? Do you really need anything more to explain this situation? Sow hat’s the problem here? The guy makes nice money, will stand to make less money under the new rules and you need all that explenation to understand why he’s angry?

Do you really need anything more to explain this situation?

]]> By: dsquared http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234595 dsquared Wed, 02 Apr 2008 05:16:48 +0000 http://crookedtimber.org/?p=6782#comment-234595 <i>But Denton’s not quite the anti-worker monster you’re painting him to be. For one thing, blogs generally (I’m sure CT is no exception) exhibit pageview growth significantly greater than general wage growth. So if Denton wants to keep his wages remotely in line with the prevailing standards, he can’t simply set a PVR and leave it at that: there needs to be some kind of deflator. </i> But this is just making the same point that Henry made when he said that "Denton wants to make sure that he captures all the productivity increase for himself". If he wants to keep wages "in line with prevailing standards", then he doesn't really want t pay piecework at all and it's unsurprising that in the long term his piecework-minus-deflator scheme isn't going to generate the favourable incentive effects associated with piecework. (The most famous example of what I'm talking about is the existence of the firm EDS, which exists because IBM tried to cap Ross Perot's sals commission out of a belief that they could keep his compensation "in line with prevailing standards" but still retain his services.) But Denton’s not quite the anti-worker monster you’re painting him to be. For one thing, blogs generally (I’m sure CT is no exception) exhibit pageview growth significantly greater than general wage growth. So if Denton wants to keep his wages remotely in line with the prevailing standards, he can’t simply set a PVR and leave it at that: there needs to be some kind of deflator.

But this is just making the same point that Henry made when he said that “Denton wants to make sure that he captures all the productivity increase for himself”. If he wants to keep wages “in line with prevailing standards”, then he doesn’t really want t pay piecework at all and it’s unsurprising that in the long term his piecework-minus-deflator scheme isn’t going to generate the favourable incentive effects associated with piecework.

(The most famous example of what I’m talking about is the existence of the firm EDS, which exists because IBM tried to cap Ross Perot’s sals commission out of a belief that they could keep his compensation “in line with prevailing standards” but still retain his services.)

]]> By: Henry http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234584 Henry Wed, 02 Apr 2008 02:18:28 +0000 http://crookedtimber.org/?p=6782#comment-234584 And for what it's worth, any increases in pageviews at CT will necessarily be greater than wage growth, given the vagaries of our internal compensation system ;) And for what it’s worth, any increases in pageviews at CT will necessarily be greater than wage growth, given the vagaries of our internal compensation system ;)

]]> By: Henry http://crookedtimber.org/2008/04/01/the-political-economy-of-piecework-on-the-internet/comment-page-1/#comment-234583 Henry Wed, 02 Apr 2008 02:16:37 +0000 http://crookedtimber.org/?p=6782#comment-234583 Felix, that is fair enough. I did have an extra bit in the original draft which I deleted about how piecework systems are also hard to pull off b/c of internal norms within firms as to who gets what, and perceptions of fairness/unfairness, but decided that my account was getting too complicated (but Miller talks about this too using simple social choice theory - it really is a lovely book). Nor do I think that Denton is a monster, really; just that if he wanted to maintain the kind of system that he wants to maintain, these actions weren't very wise. I strongly suspect that he will find himself moving willy-nilly to a more conventional system of wages, with some more moderate bonuses on top, precisely because these kinds of political economy of hierarchy questions are so difficult to resolve. Then, I am writing as an academic rather than an entrepreneur, obviously - there may be bits of business practices that are entirely non-transparent to folks like meself. Felix, that is fair enough. I did have an extra bit in the original draft which I deleted about how piecework systems are also hard to pull off b/c of internal norms within firms as to who gets what, and perceptions of fairness/unfairness, but decided that my account was getting too complicated (but Miller talks about this too using simple social choice theory – it really is a lovely book). Nor do I think that Denton is a monster, really; just that if he wanted to maintain the kind of system that he wants to maintain, these actions weren’t very wise. I strongly suspect that he will find himself moving willy-nilly to a more conventional system of wages, with some more moderate bonuses on top, precisely because these kinds of political economy of hierarchy questions are so difficult to resolve. Then, I am writing as an academic rather than an entrepreneur, obviously – there may be bits of business practices that are entirely non-transparent to folks like meself.

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