Compensation, Incentives and Risk: Economic Theory and Russian Practise

Mr. Pechersky set out to examine a specific feature of the employer-employee relationship in Russian business organisations. He wanted to study to what extent the so-called "moral hazard" is being solved (if it is being solved at all), whether there is a relationship between pay and performance, and whether there is a correlation between economic theory and Russian reality. Finally, he set out to construct a model of the Russian economy that better reflects the way it actually functions than do certain other well-known models (for example models of incentive compensation, the Shapiro-Stiglitz model etc.). His report was presented to the RSS in the form of a series of manuscripts in English and Russian, and on disc, with many tables and graphs. He begins by pointing out the different examples of randomness that exist in the relationship between employee and employer. Firstly, results are frequently affected by circumstances outside the employee's control that have nothing to do with how intelligently, honestly, and diligently the employee has worked. When rewards are based on results, uncontrollable randomness in the employee's output induces randomness in their incomes. A second source of randomness involves the outside events that are beyond the control of the employee that may affect his or her ability to perform as contracted. A third source of randomness arises when the performance itself (rather than the result) is measured, and the performance evaluation procedures include random or subjective elements. Mr. Pechersky's study shows that in Russia the third source of randomness plays an important role. Moreover, he points out that employer-employee relationships in Russia are sometimes opposite to those in the West. Drawing on game theory, he characterises the Western system as follows. The two players are the principal and the agent, who are usually representative individuals. The principal hires an agent to perform a task, and the agent acquires an information advantage concerning his actions or the outside world at some point in the game, i.e. it is assumed that the employee is better informed. In Russia, on the other hand, incentive contracts are typically negotiated in situations in which the employer has the information advantage concerning outcome. Mr. Pechersky schematises it thus. Compensation (the wage) is W and consists of a base amount, plus a portion that varies with the outcome, x. So W = a + bx, where b is used to measure the intensity of the incentives provided to the employee. This means that one contract will be said to provide stronger incentives than another if it specifies a higher value for b. This is the incentive contract as it operates in the West. The key feature distinguishing the Russian example is that x is observed by the employer but is not observed by the employee. So the employer promises to pay in accordance with an incentive scheme, but since the outcome is not observable by the employee the contract cannot be enforced, and the question arises: is there any incentive for the employer to fulfil his or her promises? Mr. Pechersky considers two simple models of employer-employee relationships displaying the above type of information symmetry. In a static framework the obtained result is somewhat surprising: at the Nash equilibrium the employer pays nothing, even though his objective function contains a quadratic term reflecting negative consequences for the employer if the actual level of compensation deviates from the expectations of the employee. This can lead, for example, to labour turnover, or the expenses resulting from a bad reputation. In a dynamic framework, the conclusion can be formulated as follows: the higher the discount factor, the higher the incentive for the employer to be honest in his/her relationships with the employee. If the discount factor is taken to be a parameter reflecting the degree of (un)certainty (the higher the degree of uncertainty is, the lower is the discount factor), we can conclude that the answer to the formulated question depends on the stability of the political, social and economic situation in a country. Mr. Pechersky believes that the strength of a market system with private property lies not just in its providing the information needed to compute an efficient allocation of resources in an efficient manner. At least equally important is the manner in which it accepts individually self-interested behaviour, but then channels this behaviour in desired directions. People do not have to be cajoled, artificially induced, or forced to do their parts in a well-functioning market system. Instead, they are simply left to pursue their own objectives as they see fit. Under the right circumstances, people are led by Adam Smith's "invisible hand" of impersonal market forces to take the actions needed to achieve an efficient, co-ordinated pattern of choices. The problem is that, as Mr. Pechersky sees it, there is no reason to believe that the circumstances in Russia are right, and the invisible hand is doing its work properly. Political instability, social tension and other circumstances prevent it from doing so. Mr. Pechersky believes that the discount factor plays a crucial role in employer-employee relationships. Such relationships can be considered satisfactory from a normative point of view, only in those cases where the discount factor is sufficiently large. Unfortunately, in modern Russia the evidence points to the typical discount factor being relatively small. This fact can be explained as a manifestation of aversion to risk of economic agents. Mr. Pechersky hopes that when political stabilisation occurs, the discount factors of economic agents will increase, and the agent's behaviour will be explicable in terms of more traditional models.

Rhetorics and Practices of Modernisation in Russian Industry: a Reflective Analysis of Organisational Cultures in Transition

This research was based on the results of a case study of a large confectionery factory in the Russian city of Samara. The concept of paternalism is clear in many features of the life of Russian enterprises, including the rhetoric and strategy of the management, relationships within the labour force and the stereotypical expectations of workers. The concept also has a much wider bearing, embracing the spheres of state policy, the social, and family relationships, that is every sphere of social life in which the patriarchal, communal, stereotyped way of thinking of the Soviet people is reproduced. A substantial proportion of the state's role in providing social protection for the population is carried out through enterprises. In spite of low salaries and the absence of career opportunities, female workers were as strongly attached to the enterprise as to their homes. Romanov's research showed how the development of capitalism in industries in Russia is destroying the cultural and social identities of female workers and is contributing to gender inequality. Interpersonal relations are becoming increasingly utilitarian and distant and the basic features of the patriarchal type of administrative control are becoming blurred. This control is becoming more subtle, but gender segregation is preserved in the new framework and indeed becoming more obvious, being reproduced both at the departmental level and in the hiring policy of the enterprise as a whole.

Using Smalltalk as a Reflective Executable Meta-Language

Object-oriented meta-languages such as MOF or EMOF are often used to specify domain specific languages. However, these meta-languages lack the ability to describe behavior or operational semantics. Several approaches used a subset of Java mixed with OCL as executable meta-languages. In this paper, we report our experience of using Smalltalk as an executable and integrated meta-language. We validated this approach in incrementally building over the last decade, Moose, a meta-described reengineering environment. The reflective capabilities of Smalltalk support a uniform way of letting the base developer focus on his tasks while at the same time allowing him to meta-describe his domain model. The advantage of our this approach is that the developer uses the same tools and environment

MITEP: REFLECTIVE JOURNEY

This research looks at the use of the Interactive Student Notebook (ISN) in the math classroom and the impact on student achievement as part of the MiTEP program. A reflective critical analysis of the MiTEP program discusses impact on teacher pedagogy, leadership, and connections to people and resources. The purpose of the study stemmed from the lack of student retention, poor organizational skills, and the students’ inability to demonstrate college readiness skills such as how to study, completing homework, and thinking independently. Motivation also stemmed from teacher frustration. The research was conducted at Linden Grove Middle School in Kalamazoo Michigan in a strategic math class. Twenty-two sixth graders, thirty-two seventh graders, and forty eighth graders were part of the study.Students were given the Strategic Math Inventory (SMI) test in week 1 of the class and again at the end of a 12 week marking period. Students participated in an attitude survey to record their feelings about the use of the ISN in the strategic math classroom. The data compared the control group (the previous year’s [2012-2013] growth data) to the experimental group, the current year’s (2013-2014) growth data. Both groups were statistically similar in that the mean average was about a 4th grade level equivalency and the groups had similar numbers of grade level students. The significant findings were in the amount of growth made using the ISN. The control group started with a mean average of 586.6 and ended with a mean average of 697.1, making about one year’s growth from a 4th to a 5th grade level equivalency. The experimental group started with a mean average of 585.2 and ended with a mean average of 744.2, making about two years growth from a 4th to a 6th grade level equivalency. This is double the growth of the control group. The Cohen’s test resulted in a score of 0.311 which describes that the teaching method, the use of the ISN in the math classroom had a medium impact on student growth.

Radiometric Method for Emissivity Retrieval in High Reflective Materials

High reflective materials in the microwave region play a very important role in the realization of antenna reflectors for a broad range of applications, including radiometry. These reflectors have a characteristic emissivity which needs to be characterized accurately in order to perform a correct radiometric calibration of the instrument. Such a characterization can be performed by using open resonators, waveguide cavities or by radiometric measurements. The latter consists of comparative radiometric observations of absorbers, reference mirrors and the sample under test, or using the cold sky radiation as a direct reference source. While the first two mentioned techniques are suitable for the characterization of metal plates and mirrors, the latter has the advantages to be also applicable to soft materials. This paper describes how, through this radiometric techniques, it is possible to characterize the emissivity of the sample relative to a reference mirror and how to characterize the absolute emissivity of the latter by performing measurements at different incident angles. The results presented in this paper are based on our investigations on emissivity of a multilayer insulation material (MLI) for space mission, at the frequencies of 22 and 90 GHz.

Reconstructing Arguments: Formalization and Reflective Equilibrium

Traditional logical reconstruction of arguments aims at assessing the validity of ordinary language arguments. It involves several tasks: extracting argumentations from texts, breaking up complex argumentations into individual arguments, framing arguments in standard form, as well as formalizing arguments and showing their validity with the help of a logical formalism. These tasks are guided by a multitude of partly antagonistic goals, they interact in various feedback loops, and they are intertwined with the development of theories of valid inference and adequate formalization. This paper explores how the method of reflective equilibrium can be used for modelling the complexity of such reconstructions and for justifying the various steps involved. The proposed approach is illustrated and tested in a detailed reconstruction of the beginning of Anselm’s De casu diaboli.

Building the capacity for learning and change through reflective conversation

Conversation is central to the process of organizational learning and change. Drawing on the notion of reflective conversation, we describe an action research project, "learning through listening" in Omega, a residential healthcare organization. In this project, service users, staff, members of management committees, trustees, managers, and central office staff participated in listening to each other and in working together towards building capacity for creating their own vision of how the organization could move into the future, according to its values and ethos. In doing so they developed ways of engaging in reflective conversation that enabled progress towards a strategic direction.

Modeling Reflective Bistability in Vertical-Cavity Semiconductor Optical Amplifiers

The characteristics of optical bistability in a vertical- cavity semiconductor optical amplifier (VCSOA) operated in reflection are reported. The dependences of the optical bistability in VCSOAs on the initial phase detuning and on the applied bias current are analyzed. The optical bistability is also studied for different numbers of superimposed periods in the top distributed bragg reflector (DBR) that conform the internal cavity of the device. The appearance of the X-bistable and the clockwise bistable loops is predicted theoretically in a VCSOA operated in reflection for the first time, to the best of our knowledge. Moreover, it is also predicted that the control of the VCSOA’s top reflectivity by the addition of new superimposed periods in its top DBR reduces by one order of magnitude the input power needed for the assessment of the X- and the clockwise bistable loop, compared to that required in in-plane semiconductor optical amplifiers. These results, added to the ease of fabricating two-dimensional arrays of this kind of device could be useful for the development of new optical logic or optical signal regeneration devices.

Experimental analysis of a photovoltaic concentrator based on a single reflective stage immersed in an optical fluid

This article reviews all the experimental tests carried out to analyze the performance of a FluidReflex photovoltaic concentrator. This novel concentrator concept consists of a single reflective stage immersed in an optical fluid. The presence of the fluid entails significant advantages. It not only allows a high system optical efficiency and increases the attainable concentration but also enhances the heat dissipation from the cell. In addition, the electrical insulation is improved, and the problem of water vapor condensation inside the module is avoided. A complete characterization is addressed in this paper. Among the experimental results, a measured optical efficiency of 83.5% for a concentration of 1035× stands out