The fact that reward is proportionate to risk works in both directions. Everyone knows that if you offer great rewards, people will take great risks. But few see the whole pattern. Few realize that if you cap rewards, people stop taking risks.
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1/2 Underlying assumptions here -1)reward is monetary in nature & 2)risk taking behavior is guided purely by financial return considerations. I always thought risk takers were driven by a combination of factors (a multivariate problem) than just dollar returns.
I'm not assuming rewards are purely monetary. This principle holds no matter what they consist of.
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Okay in that case I am just getting confused as I am finding it hard to see external methods successfully capping intangible rewards criteria. A very interesting thought to ponder over though! thanks
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