Why Does Freakonomics: A Rogue Economist Explores The Hidden Side Of Everything Say About Incentives?

As the year ended and payday finally arrived, my salary still hadn't hit my bank account. I headed straight to the finance department to sort it out, but Sarah Thompson dismissed me impatiently. "You picked up those coupons last week, didn't you? The ones for "Spend 2,000, save 1,000". You got ten of them, adding up to $10,000. Your salary is $8,000, and that extra $2,000 is a perk." I stared at her, stunned. No one had said a word about this when the coupons were handed out. Worse, they could only be redeemed at our boss's supermarket, where commodities were ridiculously marked up. Items that cost $19.99 at a regular supermarket went for $49.99 there, more than double the price. It dawned on me that the boss was just shuffling money from one pocket to another, which meant I had been basically working for free. I shoved the coupons back at her. "I don't want these. Just deposit the cash into my bank account." Michael Wright walked over with a frown. "What's all the yelling? We gave you an extra $2,000, and you are not even grateful? You're stirring up trouble for nothing. You'd spend your salary on stuff anyway. We're just making it convenient." My voice rose, shaking with fury. "What you're doing is illegal!" He laughed, cold and scornful. "Then sue me. I manage things here. You think I'd be scared by a minor employee like you?" Right then, my phone buzzed with a text notification: [Lisa Matthews, congratulations on securing the Enforcement Officer position at the tax bureau.]

"You guys know what the situation is like in this industry this year. I need to cut our end-of-the-year bonus by half in order to overcome this difficult period." My boss, Peter Hurley, claims that things are difficult in the industry right now, yet his wrist still showcases the luxury watch that he's just bought. My 20,000-dollar bonus is reduced to 700 dollars. In addition, I also received a plaque that says "Award for Outstanding Contribution". "This plaque is worth a lot, Soren. It represents the acknowledgement this company has for you. Don't be so petty when it comes to money." As I stare at the plaque in my hand, I can't help but scoff furiously. "Fine. I won't be that petty when it comes to money. I hope you won't be that petty either when you're paying next month's rent." Peter is stunned momentarily. "What do you mean by that?" I toss the plaque into the trash can. "What I mean is, I'm the landlord of this building. From next month onward, the rent will be increased ten times. If you refuse to accept the new rent, you can pack up and scram."

After half a month of nonstop overtime, I secured a contract worth over ten million, pulling the company back from the brink of collapse. My boss, Richard Gray, was overjoyed. At the celebration party, he called me the pillar of the company and announced that he would reward me with a bonus. However, when the end of the month came, and I opened my payslip, I froze. Negative 250 dollars. A negative commission? I actually owed the company 250 dollars? I immediately called the finance department, asking if there was a mistake on my payslip. They replied, "No mistake. This is the cost calculation formula that Mr. Gray personally instructed us to use. He said you'd understand once you saw it." I went straight to Richard for an explanation. He laughed. "The contract that you signed, after factoring in the concessions, upfront resources, and hidden expenses, left the company with a net loss of 150 thousand. Since the loss was due to your personal decisions, you're responsible for five percent. That totals to 7500. "Considering how hard you worked, we deducted it from your base salary first. But your salary wasn't enough, so you still owe the company 250. Don't worry. The company treats its employees well. We'll write that off." Soon after, he awarded 100 thousand dollars to the newly arrived intern. I watched the newcomer, probably connected to Richard, cheerfully treat the entire company to dinner with her bonus, and something inside me just snapped. From that day onward, I did the bare minimum. I clocked in. I clocked out. Nothing more. Later, when a critical project went catastrophically wrong and the company faced a colossal compensation demand, Richard came begging me to fix it. I just smiled and said, "Sorry, Mr. Gray. I've already resigned. If there are any problems, you can ask the intern who got the 100 thousand dollar bonus to handle it."

I was the best surgical hand in the department, and after three flawless operations in a row, I got slapped with an official reprimand and had my entire month's bonus docked. I wasn't having it. I marched straight to the Medical Affairs Office to hash it out with the manager, Gerald Sneed. "I've given this hospital ten years! Name one time I wasn't the first one in when it mattered! Last year, I pulled five surgeries back-to-back and collapsed on my feet by the end of it! What exactly did I do wrong that you're cutting my bonus over?" I was good at what I did, but my life outside the hospital was no easier. Mortgage, car payment, my kid's basketball lessons. I had been counting on that month's bonus to cover it, and now it was gone. I wasn't letting this slide. Since when did a successful surgery count as a mistake? Given my standing at the hospital, Manager Sneed didn't dare go toe-to-toe with me. Instead, he tried to smooth things over. "Dr. Cole, during that surgery you ran at three in the morning two nights ago, you drank two bags of glucose solution off the books, and it ended up billed to the patient. The family found out and accused us of overcharging. It's already blowing up online. Our hands are tied here." That's when it came back to me. That emergency surgery two nights ago had been a mess. It wasn't even supposed to be mine. I had already been on my feet in the OR for thirty-six straight hours, but the deputy director came looking for me and swore no one else could pull it off. So I gritted my teeth and scrubbed in. The surgery went perfectly. And somehow, that was what it got me. I took a breath and changed my tone. "I understand completely. This one's on me. I'll take a month off, go home, and think it over." Manager Sneed, pleased with himself for scoring one against me, approved the leave on the spot. What he didn't expect was that only a week later, the hospital director himself would call, begging me to come back to work.

For the past three months, I've slept only three hours every day just so my team and I can create an app. Thanks to our hard work, the app goes absolutely viral to the point we've garnered over 100 million registered users on the first week of its launch. At the afterparty, my wife, Stacie Woodward, announces that her godbrother, Tory Frost, who's the PR manager, will be the one receiving the million-dollar bonus. She then tosses me a few 50% discount coupons that can be used in shopping malls as my bonus. "You're just a code monkey—why do you need that much money anyway? You can have these discount coupons. Use them on anything you want. At least buy some nice clothes for yourself. Don't go around wearing these rags. You'll just end up humiliating me more." I plead to her in a low tone, "Have you gone crazy, Stacie? My dad needs the money for the best medication in order to save his life! Can you please stop joking around?" But Stacie clings to Toby's arm, looking high and mighty. "Your dad's dying, isn't he? He might as well stop wasting the public resources! I can always choose him a better grave and hold a nice funeral for him when his time comes!" As I look at Stacie's smug face, I just smile at her instead of getting mad at her. She must have forgotten that the app's core algorithm and the user growth model are built using my private, undisclosed technology stack. That means the copyright is mine and has nothing to do with the company. I just smile while nodding at Stacie. That night, I activate the technology stack's self-destruct and migration protocols.

My name becomes the sensational topic on the trending list thanks to my company's employees, who have cyberbullied me relentlessly. It all started when an intern named Cecily Plinkton posted a complaint on her social media feed, claiming that the seafood thermidor, a new food item that had just gotten released in the company's cafeteria, was sold for 14 dollars, which was four dollars more expensive than before. "What a scum company! Are the higher-ups that crazy over money? They're just leeching from us white-collar peeps repeatedly!" The entire Internet doesn't hesitate to curse me out. They claim that I'm a cold-blooded capitalist who's greedy enough to charge her own employees for lunch. No one cares about the fact that I've been shelling out my own money in order to upgrade the cafeteria's food choices just so I could make the employees happier. Every day, they get to eat over hundreds of dishes to their fill for free. Every week, the expensive dishes, such as lobsters and crabs, are charged at the net price. Thanks to these free benefits, the administrative department has been suffering from almost a one-million-dollar loss every year. So, I announce that the food prices in the cafeteria will be changed to reflect the current market's prices. At the same time, I've fired the head chef and the kitchen staff and left the meal preparation to another company that produces instant meals. As soon as the announcement is made, the entire company goes into a frenzy. The employees all crowd outside my office while begging me to bring back the benefits with tears streaking down their cheeks.