- Employed < 1 year: Severance=X
- Employed ≥ 1 year: Severance=2X
Obsidian, developers of Fallout: New Vegas, have found themselves in a similar situation recently. In their contract with Bethesda, Obsidian would only receive a bonus if the New Vegas received a Metacritic score of 85 or higher. The game has an 84. Therefore they receive no bonus, and this has likely led to their recent layoffs and the reported cancellation of an unnamed next-generation title. I'm guessing they needed that bonus to keep that team running. I feel bad for Obsidian, because as far as I'm aware they did pretty good work with Fallout: New Vegas.
Now, I'm not here to discuss how using Metacritic as a measure of how good a game is quite flawed because Metacritic pulls from reliable, trustworthy sources and other, less reliable sources. I'm here to talk about the mathematics of the situation and how
Graphically, Obisidian's situations can be represented as such
I think that people often underestimate the impact that a reward structure can have. Discontinuous ones such as the letter grade system, Obsidian's bonus, and my severance can have very harsh effects for falling just under the cutoff.
I don't think people understand just how important continuity is when we create functions (and these payoff systems are functions) for our life. Every real world phenomenon is continuous. Although things can seem sudden to the point of being an instantaneous difference, they never really are. Their change can be sharp, but it's always there. For example, the people who write the tax code understand this, although the marginal tax rate is a discontinuous function, it makes the actual amount of tax you pay a continuous (specifically, a continuous and increasing) function of your income. That is, until you start to talk about various tax exemptions and loopholes.
So what is it about continuous functions that makes them important? The important thing about a continuous function is that if you have a threshold on how much change you want in your output, there is some amount of change in your input that can be tolerated before breaching that threshold. To rephrase the problem with Obsidian's bonus payment function in these terms is that if you're sitting at a Metacritic score of 85, there is NO amount by which the score can go down and produce a small change in the bonus.
 The grade scale at my high school was:
- and F=69-0.