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Wednesday, August 7, 2013
The Myth of Bottom-Line Compensation
The Easterlin Paradox states - beyond a certain threshold, rising incomes don't bring happiness. The focus on monetary benefits raise an employee's performance to a certain level - beyond that, the law of diminishing returns sets in. It takes more that just the "input" of compensation to drive for performance, it requires a certain "internal state" of the employee called - the level of happiness.