Part of the problem was that it was an almost 600% block. Meaning that at 100% luck, we should have found almost 6 blocks. Had we been finding blocks at the 100%, you would have received a few smaller, but increasing payouts until you have shares across the whole 5nd. It sucks to be on that side of the variance, but it happens.

It reduces variance by spreading out the reward over a large number of shares. People hopping in and out, that are trying to capitalize on short term runs of luck, have little effect on the rewards of those of us that have been here mining all along. They are still rewarded for their work - like everyone else. But it's spread out over 5nd worth of shares. Any hash contributed would be rewarded proportionally for any blocks found during the 5nd. Unlike at Slush or another large pool, people notice when they haven't found a block for 3-4 hours and boom their hash rate goes crazy. Since it only takes about 1.5 hours to ramp up there.