Thursday, September 30, 2010

Incentives Matter

(1) – I had my first test of the semester last week in Financial Accounting. If you would like to see a copy of that test, drop me a note at Jhoyle@richmond.edu.

(2) - Several weeks ago I heard part of a story on National Public Radio. It was about British sea captains who were transporting prisoners to Australia in the 1700s. Unfortunately, many of the prisoners were dying along the way. So, the British government changed the way they paid the sea captains. They began to pay only for each prisoner who arrived in Australia alive. Not surprisingly, the death rate dropped to nearly zero almost immediately.

The punch line of the story was that incentives matter.

I am a believer that you can encourage people to do almost anything if you figure out the right incentives. With an incentive that matters, people can practically leap tall buildings in a single bound.

Like every teacher, I get frustrated by my students on occasion. I give an assignment and they don’t do it or they don’t put significant time into it. Assuming that the assignment is not too tough for them, why don’t they do better? That is an easy answer. They don’t have any incentive to do better.

I once asked a class: “if I gave you each $1 million to make an A on our next test, how many of you would make an A?” Every hand in class was raised quickly. So, it was not a question of ability – with the right incentive, everyone will do enough work to make an A.

Assuming that you don’t have a lot of extra millions to give out, what incentives can you use? Historically, teachers often fall back on the old standby “this is likely to be on the test” to motivate students to work. However, that is such a negative incentive. It tells the students “learn this or else.” That is hardly a way to build excitement for learning.

Personally, I prefer not to use incentives at all. I think learning should be fun and the reward of knowledge and understanding should be enough to motivate students to do the work that is necessary.

At the same time, I realize that is a bit naïve. Students are humans and they will always put their energy where they perceive the greatest immediate benefit. So, at times a more tangible incentive is needed.

On Monday and Wednesday of this week, in my financial accounting class, we covered accounts receivable. The weather has been cool and rainy and the students have seemed especially lethargic. The next test is not for 2-3 more weeks. I could tell that many of them were going to defer thinking about accounts receivable until that next test. I needed to get them cranked up. Last night, I sent them an email saying that I was going to start class off on Friday with one quick question on accounts receivable. No penalty if they missed it but I would give them 2 bonus points on their next test if they got it correct.

I’m hoping this will be the incentive they need to focus their attention on this topic. Two points is not a lot but it provides them with a tangible reason to learn this material now and not wait until the night before the test.

I will write later and let you know if this bonus question works or not. However, I am convinced that appropriate incentives do work. So, if you are having a class that is not responding in the way that you would like, step back and consider what incentives they have for doing better. Perhaps changing those incentives a bit will change your results.

Friday, September 24, 2010

VALUING YOUR STUDENTS WORDS

I have been tied up with the start of a new school year and have not had time to post anything. So, a good buddy of mine (and great teacher) Steve Markoff of Montclair State wrote the following. His words are ever so true and he says it better than I could have.

Thanks Steve!!!


We’ve probably heard the expression that you were born with two ears and one mouth, so we should listen twice as much as we talk. I remember the first time I heard this from an elementary school teacher over 40 years ago. Just how does this apply to teaching? How can we use this to become better teachers?

In order to listen more, we need three things:

1. Someone to listen to,

2. Something to listen to

3. A reason to listen


For too many of us, the answer to number 1 is “me”; after all, we have all the academic and professional qualifications along with all of the knowledge from our years of accounting – who better to listen to? It took me a long time to realize that there was someone else worth listening to in this exchange – the students.

So, now that we have someone else to listen to, we need something to listen to. As long as I am talking, there is nothing else to listen to except the sound of my own voice. What else is there to listen to? Answers to questions, that’s what. The math basically looks like this: more asking = more listening. If you ask a question, then you are going to get a response, and THAT gives you something to listen to. Have you ever thought about one of those people who you think of as “great conversationalists?” If you really take notice, all they mostly do is ask questions about YOU and open their ears and listen. Most of the time it is YOU doing the talking, but they are getting all the credit. Students frequently tell me know what a great teacher or explainer I am, when in fact I am mainly just asking and not doing that much explaining in the first place.

So far 1 and 2 sound easy, but one thing I’ve learned in life is this: People can know what to do and how to do it, but, unless they have a reason WHY they should do it – they won’t. When someone isn’t doing something, it’s one of three things. They either: a) don’t know WHAT to do – that’s easy – explain what you want done, b) they don’t know HOW to do it – also easy solution – train them. Show them how to do it. If they still aren’t doing it, then the solution is WHY – they don’t have a good enough reason for doing it.

A lot of us know that we SHOULD be asking more questions, and HOW to go about it, but we don’t have a compelling reason WHY. I’ve found that once I TRULY WANT TO HEAR my students, and then I have a good reason why. I have a real love affair with what is on the minds of my students. I can’t wait to hear what they have to say in class. As long as I honestly WANT TO HEAR them, I will be a better listener and, accordingly, since it is questions that start that process, I will naturally want to ask more and more questions.

So, if you want to ask more and tell less – create that COMPELLING REASON to listen – truly value what your students say. After all, if they had the winning LOTTO numbers, you would listen pretty closely, wouldn’t you? Well, they might not have that, but they have something that I think is worth its weight in teaching gold. Fall in love with what they say – the rest will become easy.

You have 2 ears and one mouth – so ASK twice as much as you TELL – my elementary school teacher gave me great teaching advice!

Friday, September 17, 2010

The best analogy of the day

I'm a regular reader of the Rabbit Room, a blog run by a group of Christian artists mostly around the Nashville area. They're a pretty amazing group of people - artistically talented as painters, writers, and musicians, mature, deep and thoughtful in their faith, and (importantly in terms of keeping me coming back) funny as all get out.

Recently they had a weekend get together where they had a numbr of speakers (and some kick-hiney food). One of the speakers was Walter Wanegrin, who wrote a book called The Book of The Dun Cow, a very powerful story where the protagonists are all animals fighting against Wyrm, the source of all evil in their world. It's insightful, thought provoking, and funny.

One of the bloggers expressed how inadequate he felt felt discussing literature wit Wanegrin (note: this came from the blogger - by all indications, Wanegrin is an estremely humble and engaging fellow). Anyway, here's the quote:

I felt a thousand things as he spoke, which I feel incapable of putting into adequate words. I feel like a clever monkey trying to explain to Beethoven (who is deaf and dead) the joys of flinging poo.
Every once in a while, you hear a phrase that just sticks with you. I think this one qualifies, and I've been there.

How The Financial World Views Itself

A former student of mine who works at a hedge fund just sent me this. For what it's worth, he says it's pretty accurate

My favorite is how the traders view sales. Note: the image originally came from MacroMan.

Monday, September 13, 2010

Need Some Inspiration?

There are times when every teacher needs some inspiration. There will always be days where everything goes wrong and the idea that anyone actually learns anything in your class seems remote. We all need inspiration now and then and I believe you should not ignore those needs. We are human.

One recommendation—the next time you are down and out about teaching, go to the video store and check out a movie from 1988 titled Stand and Deliver. You cannot possibly watch that movie without getting excited about the joys of teaching. It is the true story of a Los Angeles high school math teacher in a very poor area who drives his students to succeed on the AP test for calculus. He pushes them so hard that his students are accused of cheating because they do so well on the exam. They all forced to take the test a second time and they come back and pass it again.

No matter what the problems they encountered, the teacher did not let his students give up. He willed them to succeed.

It is just a wonderful story of how one teacher is able to make such a difference in the lives of so many young people by pushing them to be great. Watch it one night and you will be a better teacher the next day.

Wednesday, September 8, 2010

Spam, Spam, Spam, Spam

A couple of years back, I was on the train (coming back from a consulting gig), and, being an extrovert, I started talking with a guy sitting next to me. He was a "stock tout". In other words, he was one of those guys who sent out emails pushing one stock or another. He claimed it was a pretty profitable business.

Now I have some evidence backing him up.
Here's a pretty interesting piece on the market effects of internet stock spam spam. A couple of years ago, Well, Frieder and Zittrain did a study titled Spam Works: Evidence from Stock Touts and Corresponding Market Activity. They found that on spammers "touting" (i.e. pushing) a stock has some pretty significant effects on the touted stock's price and trading volume. Here's the abstract (emphasis mine):
We assess the impact of spam that touts stocks upon the trading activity of those stocks and sketch how profitable such spamming might be for spammers and how harmful it is to those who heed advice in stock-touting e-mails. We find convincing evidence that stock prices are being manipulated through spam. We suggest that the effectiveness of spammed stock touting calls into question prevailing models of securities regulation that rely principally on the proper labeling of information and disclosure of conflicts of interest as means of protecting consumers, and we propose several regulatory and industry interventions.

Based on a large sample of touted stocks listed on the Pink Sheets quotation system and a large sample of spam emails touting stocks, we find that stocks experience a significantly positive return on days prior to heavy touting via spam. Volume of trading responds positively and significantly to heavy touting. For a stock that is touted at some point during our sample period, the probability of it being the most actively traded stock in our sample jumps from 4% on a day when there is no touting activity to 70% on a day when there is touting activity. Returns in the days following touting are significantly negative. The evidence accords with a hypothesis that spammers "buy low and spam high," purchasing penny stocks with comparatively low liquidity, then touting them - perhaps immediately after an independently occurring upward tick in price, or after having caused the uptick themselves by engaging in preparatory purchasing - in order to increase or maintain trading activity and price enough to unload their positions at a profit. We find that prolific spamming greatly affects the trading volume of a targeted stock, drumming up buyers to prevent the spammer's initial selling from depressing the stock's price. Subsequent selling by the spammer (or others) while this buying pressure subsides results in negative returns following touting. Before brokerage fees, the average investor who buys a stock on the day it is most heavily touted and sells it 2 days after the touting ends will lose close to 5.5%. For those touted stocks with above-average levels of touting, a spammer who buys on the day before unleashing touts and sells on the day his or her touting is the heaviest, on average, will earn 4.29% before transaction costs. The underlying data and interactive charts showing price and volume changes are also made available.
If you're not convinced (or even if you are), I have a couple of names of people who are related to the former finance minister of Nigeria who need your help getting money out of the country (and are willing to share the profits with you). I'll give them to you for a small finder's fee. Just send me the routing number on your bank account and I'll take care of it electronically.

HT: The Psi-Fi Blog

Of course, with a title like that, it was inevitable


Sunday, September 5, 2010

Be A Student

If you are always the king, it is very difficult to understand what it is like to be a peasant.

Most college professors that I know have spent a long time being the experts in the classroom. They are the ones who walk in each day with all the knowledge. They are the people in charge. Trust me, that gets to be a very comfortable feeling. At times, teachers can forget the feeling of being a student.

Consequently, whenever possible, I try to take classes where I am the student. I prefer to take classes in subjects where I have little or no knowledge. Over the years, I have taken classes in jewelry making, Russian culture, portrait photography, creative writing, and ballroom dancing. I think I managed to be terrible in all of those classes. I like being the person in the room who is worried about looking stupid. I like sitting through a 75 minute class where I am bored to death after 10 minutes. I like taking a class where I listen to a teacher and try (sometimes hopelessly) to figure out what he would possibly be explaining.

If you have forgotten what it is like to be a student, it can be very difficult to be a good teacher. When is the last time you took a class so that you were the student and not the person in charge?

A few years back, I took a two-day class in large format photography (think Ansel Adams or Matthew Brady). For some reason, I really wanted to do well so I spent the first day of the class taking careful notes and making sure that I understood every step. I asked questions and focused my attention on every demonstration.

At the end of that first day, each of the four members of the class took two pictures with one of those huge cameras as we crouched under a black cloth. The teacher was going to develop those pictures overnight and we would critique them the following day.

I came back, the next morning, with great anticipation. I had been so careful to do everything correctly and I really wanted to see the finished product. I was so optimistic. When we walked in, the teacher informed us that “three sets of pictures were great but one set did not come out at all.”

Immediately, I felt my stomach clutch up as I mumbled to myself “Oh please, don’t let me be the one who messed up. I tried so hard to get it right.”

The pictures did not have names on them so the teacher held up the first batch and one of the students identified them as her pictures. I am now down to 1 chance in 3 for being the incompetent fool. “Okay,” I said to myself “you were so careful—surely, your pictures were fine. Surely, someone else made a mistake.”

The teacher held up another set of pictures and one of the other men in class held up his hand. Now, we are down to the final set of good prints. By elimination, the dummy will now be unmasked and the other three people and the teacher will know who failed to learn the lesson. I can actually hear my heart beating – no one wants to appear stupid. “I want mine to be good; I want mine to be good” I silently chant, almost in prayer.

Well, the last prints went to the other remaining student and I was left to confess that I was the person who apparently couldn’t complete the assignment. Everyone was nice and told me that such things often happen with these big cameras. But, one person in the group looked dumb, and it was me.

When I went to my own class the next day, where I was once again in control, I looked out at my students with a bit more awareness. No matter how hard you try, sometimes things go wrong and you feel stupid and feeling stupid does not often encourage learning. At least on that one day, I was a bit more careful with my explanations and I had a little more patience when the students did not grasp the concepts immediately. On that day, I was a better teacher. And, I was a better teacher for having been a student—not 40 years ago but on the previous day.

Take some classes. Take hard classes. Be brave and put yourself into the student role. The king and the peasants really need to work together and if you are always the king, it is very difficult to understand what it is like to be a peasant.

Friday, September 3, 2010

Here We Go Again

All good things (and summers) come to an end - we're starting back up at Unknown University. For the first time in four years, I get to teach the undergraduate introductory course. For many faculty, this would be a bad thing (a lot of my colleagues simply don't like teaching the core course). However, I find it to be one of m favorite classes - it's easy, and I get to be an energetit and somewhat goofy evangelist for the Finance Department.

While putting together my syllabus, I went looking for an appropriate quote or two (I usually stick a few in there, if only for my own amusement). I came across a perfect one for the Unknown Daughter. As I've mentioned before, she's extremely bright (I know, I'm biased). But she also hangs out with a great bunch of kids - she and her closest three girlfriends are all smart, creative, and nice. They now can have a group motto.

The quote (attributed to Mark Twain) is:
Knowledge is Power
Power Corrupts
Study Hard
Be Evil
Even better, you can buy a t-shirt with the motto at Cafe Press.

Thursday, September 2, 2010

Writing Assignments

I want my students to learn to write well. Good writing skills should be a requirement for any college education, regardless of the major. Writing well helps people think more logically. Sentences must follow sentences in a pattern that makes sense. Words need to be positioned so that ideas are clear. The message must be delivered in a fashion that can be understood by the intended reader. Today, the writings of many college students seem to be influenced heavily by Twitter and instant messaging.

How can a teacher assist students in developing good writing habits? I use a four-step approach. I grade each of these steps individually but I put the most emphasis on the finished product that comes from the final step.

First, students need something to write. I instruct them to create a problem or a question (within our discipline) that needs to be addressed. I give them guidance on arriving at their question. They then write a letter or memorandum to describe this issue in an understandable fashion. The reader must be able to comprehend the various aspects of the problem and the reason that it needs to be resolved.

Second, the students do the research necessary to arrive at a reasonable resolution for the problem they have created. Every person writes a response to explain the answer that they believe best solves the problem. Again, clarity is essential. The reader must be able to understand the recommendation and the rationale for following that approach.

Third, these first two writings assignments are collected in class and immediately given back, but to a different student. This second student is assigned to critique every aspect of the problem that was raised and the proposed solution. The critique should look at both the technical answer provided and the first student’s use of the English language. This reader must search for anything that prevents either of the first two assignments from being perfect. I have always felt that requiring an evaluation of this type makes both parties more careful. The original writer feels the pressure of having a peer assess the work. The second student must provide a critical evaluation of the technical answer and the written communication, a task not always encountered in school.

Fourth, the critique letter is given to the first student. Hopefully, the student will see the reason why some portions of the original letters were not clear or where the technical material was inaccurate. This student is given the opportunity to rewrite the first two assignments based on the advice provided in the critique. Students can make whatever changes they feel are needed. They have a chance, before they turn in the final letters, to have another member of the class provide advice.

I want each student to see the elements of what they wrote that were judged by their reader to be unclear and needing additional work. I am not an English professor but I have been well pleased by the improvements that I have seen between the original letters and the final versions.