005-Concept of Potential Performance Curve (Part 3)

Considering Selfishness

As I mentioned in the Chapter “Concept of Potential Performance Curve (Part 1)”, the PPC is the maximum return employees can provide. When employees just work at their best without any selfishness, they can provide a return at the PPC level. Selfishness, however, is a person’s basic instinct. When John knows he is providing $10 an hour return for the restaurant and only getting $5 an hour wage back, and looking at Sue providing only $6 an hour without any problem, he might consider working just like Sue or looking for another job that has better pay.

Even if John just likes working hard and still provides $10 an hour in return, people like David and Sue might try in some way to stop John from working hard. They might group and isolate John at work. When John needs any help at work, they might just give John a hard time.

Either way, the Actual Performance Curve (APC) will decrease from APC1 to APC2 and eventually meet the wage line. That means eventually, the boss or employer will not earn anything in production if the boss or employer does not do anything to prevent this from happening. Here the APC is a curve showing the actual return that employees provide. This APC must be lower than the PPC since employees cannot provide more return than their maximum potential. It is logical consistency. The curve is shown in Figure 3.1.

Fig.3.1

Figure 3.1 shows the APC has decreased from APC1 to APC2, and it will decrease until it reaches the wage line. This topic is a reflection of “001-Lazy. No Judge! It is Economics!”

In the next topic, I will bring out some ways that Employers and managers are doing to deal with PPC and Push up the APC of employees.