Friday, October 23, 2009

Using Neural Measures of Economic Value to Solve the Public Goods Free-Rider Problem

The end of the year is the time for performance reviews in laboratories across the world. The question is always about the metrics. Managers could use measures like the number of ICC profiles created, the lines of code written, or the ∆E precision improvement in the color transformation algorithm.

However, different employees contribute in different ways to the company's bottom line and it is always difficult to compare apples with oranges to fit everybody on a nice Gaussian curve. Would it not be nice if there was an objective way to measure employee performance like we measure a printer calibration chart?

Well, today's issue of Science magazine has an article that brings us closer to this more efficient and objective performance assessment tool. Antonio Rangel and co-workers at the California Institute of Technology in Pasadena describe in their paper Using Neural Measures of Economic Value to Solve the Public Goods Free-Rider Problem how they can measure a person's contribution potential using an fMRI scan. The authors write that those not having an fMRI scanner in their lab might be able to use a different physiological measure, like pupil dilation or facial electromyography.

I write "contribution potential" instead of "contribution" because the method measures a physiological quantity, not the dollar value of the work performed. However, the difference between contribution potential and contribution is in large part a function of the manager's ability to create a work environment in which researchers are excited and work synergistically creating a superadditive surplus. Therefore, the reward for the difference should go to the manager and not his workers. I expect the difference to be positive from the observation that with a long term GDP growth of between 2% and 3% they manage to create an investment return between 15% and 20% (see post of October 19).

With the Dow Jones Index up 50% since the beginning of the year, Swiss watchmakers are busy polishing their tourbillons in expectation of brisk sales of 240 K$ wrist watches with mechanical manually wound movements capable of 21'600 vibrations per hour and keeping the owner informed on time with the indication of: perpetual calendar with retrograde date hand, hours and minutes of mean solar time, day, month, leap year by hands, moon age, sidereal time, sky chart, phase and orbit of the Moon.