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2/26/2008

When bonuses are tied to profits

Where would these lead to? Essential services, transport companies, hospitals, schools and universities, etc, when the bonuses of their top executives, including staff, are tied to profits made, what would be the organisations' objectives and policies? Would the fees or prices of their goods and services ever come down? Coming down means lesser or no bonuses. So what? Profit for profit sake without looking at other intangibles or objectives can be very destructive. Just like managing a country for economic and monetary rewards and ignoring other values or the people's general well being, can lead to one certainty.

13 comments:

Anonymous said...

Singapore is no longer a country. For all intents and purposes, it is now a full-fledged corporation. Once you think of it this way, everything they do will then make sense.

redbean said...

yep. they should do away with national service as well and call the people employees or staff. can hire and fire too.

Sluggy said...

Nope, NS is needed. Which company dun need security guards? & somemore cheap labour?

They also hiring mah, with all the foreign talents, and can fire, like tat SIA union pilot guy.

This big corporation also many quitters, like the MP kids all studying abroad. =P

redbean said...

welcome to the blog, sluggy.

it is another way to look at it. security guards! ya, guards are also employees.

my point is that all the ceos will only care about profits to make sure they get big bonuses. so the consumers should brace up for more price, fees and fare hikes.

that is why it is bad for essential services to be privatised and run for profit only.

Matilah_Singapura said...

Bonuses SHOULD be tied to profits. However, if one is to have profits, one must also have the bidding of resources in an unfettered market. Then you get the proper "price-signal" mechanism of profits and losses.

Govt arseholes like to fancy themselves as "business" people. This really shows you how insecure they are. They can't function in a "real" world, so they join a world who controls people by force, juggles figures and facts, pretends to deliver "goods" and "services".

Deep down, these malfunctioning humans who join the public sector are secretly envious of those in the PRIVATE sector, especially the ones who are successful.

Not to be outdone, these misanthropes employed by and ball-licking The State, pass edicts to pay themselves huge salaries so they can be like their successful private sector brethren. They then embark on monopoly businesses and charge premium for sub-standard goods and services - keeping out TRUE market competition by regulation and licensing.

Any bloody fool who runs a monopoly can make a profit by charging high prices. Why not? There is no competition. Even if the public screams blue murder, eventually they'll shut up and pay up.

These days if you have a small cock or small tits (if you are female) you can, for a price, get "enhanced" by plastic surgery. Although your new dimensions will be "fake" (an illusion), who would care?

Similarly, if you are a fucking lazy bum without a conscience who finds life in the "real world" too difficult, just join the government, and become not just an "equal" to a successful private sector entrepreneur, but your very own Feudal Lord, complete with a bunch of serfs paying you tribute out of their productivity.

redbean said...

very hard to separate fiction from the real world. the truth or the tooth can be quite similar.

Anonymous said...

based on certain criterias/figures, our country shud have done extremely well.. there were even huge surpluses in collections that someone said shud be greatly admired.. based on those figures, big bonuses were accorded... perhaps promotion for a job well done.

ok.. high growth, good wages? but why are singaporeans increasingly educated to switch to no-frills goods, eat frozen food, relocate to remote ends of the country, tighten belts, lower expectations, run faster and retire at 70 or never...

so saved for the upper-income group and foreigners, this is the quality life the rest shud be considering; or did i get that incredibly wrong?

Matilah_Singapura said...

to redbean:

The key is to discover or in most politically related instances uncover the truth. Not because the "truth" is "good" or "moral" or to stroke one's ego and spiritual pride, but simply because when you know the truth you can see things as they are (not as they "should be") and that in itself will help you to make better CHOICES for your next course of action.

If you choose to not put the hard work in to discover the truth, you will always be making decisions based on false information.

to anon 11:12

> there were even huge surpluses in collections that someone said shud be greatly admired <

And many people believe that this is a "good thing". What they fail to realise is that the govt never creates money by trading. It's BIG SURPLUSES are simply the result of taking too much from the private citizens and private businesses.

Another economic myth in anon's post is HIGH GROWTH. When you look at the (money supply) inflation (over 20%) you will naturally get large increases in the price of stocks and real estate. Goods will rise in prices too, though not uniformly throughout the economy. Later down the track, there is an upward pressure on wages as firms expand and thus need to hire more people - driving the demand for labour.

High growth levels fuelled by credit expansion and currency inflation are unsustainable, in fact they are economically disastrous. One doesn't have to wait for the inevitable "crash" to become a "victim" of govt economic mismanagement.

Right now people are feeling the pinch through escalating costs of living. Those whose services are "in demand" have received about 20% more in their pay. Those who are not so much in demand are struggling to make ends meet, through no fault of their own.

And the govt still reckons that there is good "growth" - but what is the point if it is inflationary?

Also that flatulent old geezer LKY has claimed that the US recession won't affect Asia. Maybe so, but as I write this, you can bet that the Asian central banks (the cause of inflation) are gearing up for more "action".

The Thai govt announced a "stimulus" package yesterday — a bold exercise in fiscal policy — i.e. trying to "stimulate" the economy using tax cuts, to encourage "private investment". However, the govt has committed to spending HUGE on "national projects".

Tax cuts - menas govt get less money through tax revenue. Govt spending on big national projects. HOW CAN YOU SPEND MORE WHEN YOU HAVE LESS MONEY TO SPEND?

You and I can't do it - try as we may, and we'll get into deep shit.

So how can a govt do this? Voodoo? Magic?

No. Better still: it can borrow (placing the country in debt), or run deficit budgets (more debt) or inflate the money supply — which is always favored because it causes the illusion of "wealth" as stock and real estate prices rise.

I'd like to congratulate the Thai govt. They've just initiated an economic disaster. Of course it'll take a few years for the inevitable crash to occur.

So what to do? Make merry, and have fun. They will be printing billions of new baht... what a PARTY!

Anonymous said...

If there is a country that can engineer a brillant soft landing on high inflation, it has to be China.. they have the smartest/ shrewdest people on the planet with them. Singapore has alot to learn.

redbean said...

the learning cycle has reversed. they used to learn from us. now they have taken off. even their party leaders are younger than ours.

and they do not allow any leader to be entrenched in power for too long, a bit like the american system.

Matilah_Singapura said...

About 15 years ago, the Chinese govt contacted the major free-market and private enterprise educational institutions in the US and had entire libraries translated into Chinese.

Thee is definitely a free-market/individual liberty slant to how the Chinese are changing from communist to laissez faire. And they are doing it steadily, although IMO in a surprisingly quick pace.

Despite Chinese culture being outwardly "communitarian", I will tell you that the successful Chinese are no different from their Western counterparts in their individualistic pursuit of their own destiny. They are willing to dispense with those village traditions which no longer apply in todays empowered individual world.

redbean said...

china is now a big contradiction. the chinese are by nature capitalist and commerce people. communism came to china out of a necessity. a case of nothing else works and anything can do.

after so many years of deprivation under wrong system and wrong values and suppression by internal and external forces, they have finally broke free and to live life again, and in a hurry.

Anonymous said...

Doing business is a Chinese trait I suppose. Many other Asian countries outside of China have their economies dominated by Chinese, countries like Indonesia, Malaysia and Thailand for example. So it does not come as a surprise that the mainland Chinese are in such a hurry and are now so good in competing with the rest of the world.