Michael Church on open allocation:

When open allocation is in play, projects compete for engineers, and the result is better projects. When closed allocation is in force, engineers compete for projects, and the result is worse engineers.

When you manage people like children, that’s what they become. Traditional, 20th-century management (so-called “Theory X”) is based on the principle that people are lazy and need to be intimidated into working hard, and that they’re unethical and need to be terrified of the consequences of stealing from the company, with a definition of “stealing” that includes “poaching” clients and talent, education on company time, and putting their career goals over the company’s objectives. In this mentality, the only way to get something decent out of a worker is to scare him by threatening to turn off his income– suddenly and without appeal. Micromanagement and Theory X are what I call the Aztec Syndrome: the belief in many companies that if there isn’t a continual indulgence in sacrifice and suffering, the sun will stop rising.

The whole thing is a great read.

There’s also some great discussion about it by a reader and the author. Michael Church again:

I don’t know what the best approach to rewarding important-but-not-desired projects is. Large bonuses are usually a sign of something broken, and “performance-based bonuses” turn after entitlements in peoples’ minds after one year. Promotions for citizenship are a good idea, but how does one define promotions without creating the sort of power dynamic that open allocation is supposed to prevent?

I think the ultimate answer involves ownership, which is more than just notional equity. People will do the grungy work associated with something they own. Bonuses aren’t real ownership, because there’s no guarantee of another one. Nor am I talking about equity, which has its own issues (largely rooted in VCs being stingy and setting ~0.1% caps on engineer grants). To make OA work, you probably need a culture where people are encouraged to take ownership– not behave like an employee. Very few corporate cultures actually exist like that. In most companies, an ownership attitude gets you fired.