Page 380 - Ray Dalio - Principles

b. Show candidates your warts. Show your job prospects the real picture,
especially the bad stuff. Also show them the principles in action,
including the most difficult aspects. That way you will stress-test
their willingness to endure the real challenges.

c. Play jazz with people with whom you are compatible but who will also challenge
you. You need people who share your tastes and style but who can
also push and challenge each other. The best teams, whether in
music, in sports, or in business, do all those things at the same
time.

8.6 When considering compensation,
provide both stability and

opportunity.

Pay people enough so that they’re not under financial stress, but
not so much that they become fat and happy. You want your
people to be motivated to perform so they can realize their
dreams. You don’t want people to accept a job for the security of
making a lot more money—you want them to come for the
opportunity to earn it through hard and creative work.

a. Pay for the person, not the job. Look at what people in comparable
jobs with comparable experience and credentials make, add some
small premium over that, and build in bonuses or other incentives
so they will be motivated to knock the cover off the ball. Never
pay based on the job title alone.

b. Have performance metrics tied at least loosely to compensation.While you
will never fully capture all the aspects that make for a great work
relationship in metrics, you should be able to establish many of
them. Tying performance metrics to compensation will help
crystallize your understanding of your deal with people, provide

good ongoing feedback, and influence how the person behaves on
an ongoing basis.
c. Pay north of fair. By being generous or at least a little north of fair
with others I have enhanced both our work and our relationships

and most people have responded in kind. As a result, we have
gained something even more special than money in the form of
mutual caring, respect, and commitment.