When Markus Dohle, the chief executive of Random House, announced at the company holiday party that each and every employee who had been with the company for a year – from top executives to their secretaries – would be receiving a $5,000 bonus, the room erupted in cheers.
The decision by Random House was largely tied to the success of “50 Shades of Gray.” No employee anticipated or specifically worked toward the reward, so what effect will this bonus have on employee loyalty?
Explaining the nature of incentives is Dan Ariely, author and professor of behavioral economics at Duke University.