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Very bad idea. This almost always incentivizes to exploit for short term financial results at the expense of long term sustainability. For example, you can cut down customer support department to save money which would increase your profit (and therefore bonus for an employee who made that decision). In longterm you probably won't have customers. Executive pays often follow this rule and you can find vast number of stories how they ruined companies for short term gain and bonus cashouts.


OK, but if you substitute "product's long term financial success" for "product's financial success", I think the point still stands.

Could add in factors for customer retention and customer satisfaction, for example.

Everyone on the team should share responsibility for figuring out what will make the customer's happy with the product and how to deliver on those things.


The criteria "product's long term financial success" doesn't have a lot of meaning. Does it mean my bonus is withheld until 5 years? What if something else goes wrong in such long time frame (like economy tanks) which wasn't my fault? What if someone unrelated contributes to 5-year success and I get to share the glory?

The point is that measuring performance off of single metric is incredibly tricky. In the field of reinforcement learning this is known as reward function engineering and its one of the hardest thing to get right for even well specified problems. Employee actions would need to have short term as well as long term focus (exploitation vs exploration). Most actions have consequences that won't reveal itself completely until sometime in future. The current "state of the art" technique is to use stock vest schedule with hope that employee would care to grow his/her future stock vest.




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