Wednesday, December 17, 2008

Ponzi Scheme shows peter principle rather than brain drain theory is correct

When institutions such as corporations, government agencies and universities jack up executive salaries, they are contributing to the Peter Principal rather than combating brain drain.

To combat brain drain, they say they have to offer big salaries to attract top talent to their organizations. Pay more rather than standing by as top talent is "brain drained" away.

I hear this theory all the time, especially expressed among educational institutions. It's articulated there, but applies to many forms of business and government alike.

Now we see what the very top of the pay scale is capable of. Yet another scandal. Both those who were perpetrators of the Ponzi scheme and the many "best and brightest" who fell for it.

The Peter Principle where "people tend to Rise to their levels of incompetence" seems more accurate most of the time.

If institutions weren't so burdened by fear of brain drain, they could save lots of money on executive salaries.

Maybe top talent doesn't always command top dollar.

Insisting that top talent requires top dollar is kind of an insult to the many folks who are so committed to their work that they, in some cases, even volunteer.

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