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» Ship of Fools   »   » Oblivion   » Pricing labor: pay equity, fair wages, and negotiating compensation etc.

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Source: (consider it) Thread: Pricing labor: pay equity, fair wages, and negotiating compensation etc.
RuthW

liberal "peace first" hankie squeezer
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First, a couple of illustrative anecdotes from shipmates:

quote:
Originally posted by Josephine:
The first job offer I got when I left college was at an engineering company. They offered me $10,000. Given that the only writers I knew at the time were journalists, and given what journalists made, that wasn't awful. I took it.

And after a year, because of my stellar performance, I was offered a 20% raise. And shortly after that, I learned that the man who had held the position before I was hired had been making $30,000.

quote:
Originally posted by tclune:
Two men are offered wildly different salaries for what amounts to the same job at companies where I work. The primary determinant of what you make is what you made at your last job.

FWIW, this is why I did consulting work for a couple of years -- consultants aren't paid that way. My salary literally doubled when I returned to regular employment because of how I could present my previous pay rate while consulting. But a good friend of mine who was hired to do exactly the same job at the same company made literally half of what I was making.

And a summary of the provisions of Proposition N in Long Beach, CA, on the ballot next month:
  • Requires hotels with more than 100 rooms to pay workers a minimum of $13 per hour.
  • Says service charges (tips) are paid entirely to the hotel worker performing services for the customers from whom the service charges are collected - hotels can't skim some off the top.
  • Gives hotel workers five paid days off per year for sick leave, vacation, or personal necessity.

Full text here if anyone wants to read the fine print. For reference, minimum wage in California is $8/hour.

The discussion on the 2012 US presidential election thread, where Josephine was saying fair pay is fair pay and tclune was saying people get paid according to how much they're able to leverage, reminded me of my experience last time I negotiated a lease at work for a couple of copier machines. I wanted the salespeople to just give me their prices. The salespeople for the various companies from which I got bids all treated it as game in which they competed with each other to land the contract, and one actually protested when I made my decision, saying he should have been given a chance to see if he could give us a better price -- he wanted another round of the game. That of course made me wonder if I could have significantly reduced our costs by playing the game longer. Had I been buying a desktop printer, I would have just gone to Office Depot and paid the price on the label.

Laws prohibiting employers from discrimination based on sex, race, ethnic origin etc and the way pay is determined in some jobs seem to be operated under assumptions similar to those I was making when leasing a copier: there's a fair price for labor, it shouldn't be too hard to figure out what it is, and everybody should get that same fair price. But in many jobs the way pay is determined is based on a complex set of factors that employees may or may not know about. Some people have a lot of leverage when they negotiate their pay; they have scarce, valuable skills, or a huge reputation in their field, or a powerful union. For others it's entirely one-sided; the employer sets the pay and the employee can take it or leave it -- and lets bear in mind that leaving it is not a realistic option for a lot of people in this economy.

And finally, some prompting questions, meant to start discussion, not describe its scope: is there really such a thing as fair pay? Will it be fair for workers in hotels with more than 100 rooms to get $13/hour while the workers in smaller hotels don't have the law guaranteeing them the same pay for the same work? Is it fair that two people doing the same job don't get the same pay because one has better negotiating skills? Is fairness in compensation for labor even possible? If so, is it desirable?

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cliffdweller
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You raise a lot of good but complex questions. Picking off the low-hanging fruit first, let me repeat a comment I made on the prior thread:

quote:
Originally posted by RuthW:
First, a couple of illustrative anecdotes from shipmates:

[QUOTE]Originally posted by tclune:
[b]Two men are offered wildly different salaries for what amounts to the same job at companies where I work. The primary determinant of what you make is what you made at your last job.

Very common, yes. And as someone who really, really sucks at these sorts of negotiations, I detest it. But more importantly, just want to point out that what this effectively does is disincentivize company loyalty. Under such a (again, common) system, personnel with the most seniority will inevitably make the lowest wages, because they have no immediate prior salary to leverage in negotiations. The highest paid will be the least loyal, the job-hopping opportunists who use each job as a mere stepping stone to leapfrog to the next. Of course, I realize company loyalty went out the window long, long ago, making this post really an exercise in nostalgic reverie.

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tclune
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As I tried to say in the other thread, I think that the notion of intrinsic worth of a given job is naive. I don't see any reason in nature that a CEO should make more than a janitor, for example. The notion of "fair wages" seems to require that there be such a thing as objective value of a job. Barring that, ISTM that the alternative is to value the job by leverage.

It strikes me as perfectly reasonable to say that all people will get the same hourly rate, regardless of what they do. The rationale being that there is no obvious basis for deciding that taking an hour of my life is worth less than taking an hour of yours.

Alternatively, leaving it up to folks to claw the most money out of an employer that they can seems pretty much what's left. Of course, passing "equal pay" laws is one way of applying leverage. My point in the other thread was that such laws are just a different way of applying leverage, and do not reflect any real virtue beyond that. I find it offensive when folks insinuate that they are being just (and it is just a happy accident that "justice" is to their economic benefit) when in fact they are playing power politics. Of course, YMMV.

It is entirely reasonable to skew the field in various ways. For example, we know that CEOs had little interest in maximizing their income when the top marginal tax rate was 90%. It seems clear to me that re-instituting such a tax rate would have the effect of radically lowering the disparity of income. Folks with the most leverage would not necessarily find it in their interest to piss off everyone else by squeezing every last ounce of income out of their organization when it would just go to the government anyway.

But this doesn't change the leverage approach to income setting: it just makes running roughshod over the rest of the company less personally rewarding than spreading the wealth and basking in the glow of the gratitude of those with less power. Call me perverse, but that seems like progress over our current system.

--Tom Clune

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Beeswax Altar
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My church needed some masonry done. We solicited bids from three sources. The first was a big company out of a big city that specialized in the restoration of old buildings. The second was a union mason. The third was apparently a general builder. Bid number one was the highest by far. Bid number 2 was $3,000 less. Bid 3 was $4,000 less than Bid 2. My junior warden is a master carpenter. He figured the big company needed so much more just to make it worth their time. So, the question became would the union mason be worth $4,000 more. The junior warden was friends with both men and very familiar with their work. He said the general builder actually had more time on the wall because he had been laying brick his entire life. We went with bid 3 and were very pleased with his work. The other 2 bidders thought they had qualifications that justified them charging more. Another church might have paid more assuming they contractors charging more would do a better job.

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cliffdweller
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aside:

quote:
Originally posted by tclune:
As I tried to say in the other thread...

Alternatively, leaving it up to folks to claw the most money out of an employer that they can seems pretty much what's left. Of course, passing "equal pay" laws is one way of applying leverage. My point in the other thread was that such laws are just a different way of applying leverage, and do not reflect any real virtue beyond that. I find it offensive when folks insinuate that they are being just (and it is just a happy accident that "justice" is to their economic benefit) when in fact they are playing power politics. Of course, YMMV.

...It is entirely reasonable to skew the field in various ways.
But this doesn't change the leverage approach to income setting: it just makes running roughshod over the rest of the company less personally rewarding than spreading the wealth and basking in the glow of the gratitude of those with less power. Call me perverse, but that seems like progress over our current system.

--Tom Clune

fwiw, this seems much clearer than what you said (or what I understood) on the other thread. I believe I now get your point and can cease
[brick wall]

carry on.

[ 20. October 2012, 16:37: Message edited by: cliffdweller ]

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Arethosemyfeet
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I'm very glad to not be personally responsible for negotiating my salary. I teach maths and physics, the laws of supply and demand say I could probably get paid a lot more if the salary scales were abolished, but I'd hate to do the negotiating and I can't convince myself that I'd deserve to be paid 50% more than the history teacher. I'm happy to be in a sector with strong unions and clear pay and working conditions, and a strong culture of equal pay for equal work.
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cliffdweller
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quote:
Originally posted by Arethosemyfeet:
I'm very glad to not be personally responsible for negotiating my salary. I teach maths and physics, the laws of supply and demand say I could probably get paid a lot more if the salary scales were abolished, but I'd hate to do the negotiating and I can't convince myself that I'd deserve to be paid 50% more than the history teacher. I'm happy to be in a sector with strong unions and clear pay and working conditions, and a strong culture of equal pay for equal work.

Wanna discuss why full faculty deserve to receive 50-70% more (prorated hourly) than adjuncts?

agh, I'm digressing into rant... never mind...

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Arethosemyfeet
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quote:
Originally posted by cliffdweller:
Wanna discuss why full faculty deserve to receive 50-70% more (prorated hourly) than adjuncts?

agh, I'm digressing into rant... never mind...

I'm afraid I haven't a clue what you're talking about, check my location [Smile] .
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cliffdweller
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No problem-- it was a self-serving and tangental rant. Carry on.

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Ender's Shadow
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quote:
Originally posted by Arethosemyfeet:
I'm very glad to not be personally responsible for negotiating my salary. I teach maths and physics, the laws of supply and demand say I could probably get paid a lot more if the salary scales were abolished, but I'd hate to do the negotiating and I can't convince myself that I'd deserve to be paid 50% more than the history teacher. I'm happy to be in a sector with strong unions and clear pay and working conditions, and a strong culture of equal pay for equal work.

And lo, there is a persistent shortage of maths and physics teachers, because they will get paid more in another job than the history teacher. Therefore it is entirely reasonable, for staff retention reasons, to pay teachers in shortage subjects more than than their colleagues.

I used to work in IT. The public sector employer I worked for introduced a job evaluation scheme based on levels of skills demonstrated in the job. A few years later they had to introduce a 'market supplement' for IT staff because they had the option of higher paid employment elsewhere. This is because IT staff make a visible, measurable contribution to the bottom line by their projects; therefore there will be competition for our skills while we can be shown to make the company more by our presence than we are being paid. Bucking markets is a BAD IDEA; they will come and bite you.

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The Silent Acolyte

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quote:
Originally posted by cliffdweller:
Wanna discuss why full faculty deserve to receive 50-70% more (prorated hourly) than adjuncts?

A tangential question, or not, I feel obliged to point out that you are asking completely the wrong question.

The right question is to ask how these charities (non-profit institutions of higher learning are charities) justify screwing the adjuncts?

To ask your question is to pit worker against worker.

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Belle Ringer
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A friend discovered about ten years ago that her assistant, her junior in skills and responsibility and time with the company and time in the career field, was paid (had been paid for years) significantly more than she was.

She fussed at the boss, whose response was, "he asked for it, you didn't."

To the boss, fair is whatever people are satisfied with well enough that they don't ask for more. To my friend, fair is the boss calculating the worth to the company measured by things like level and quality of work, and paying accordingly, employees trust the boss to pay fairly and don't ask for more because if the boss pays fairly any request for more is asking for an unfair amount.

Different standards for calculating "fair" cause mis-communication.

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cliffdweller
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quote:
Originally posted by The Silent Acolyte:
quote:
Originally posted by cliffdweller:
Wanna discuss why full faculty deserve to receive 50-70% more (prorated hourly) than adjuncts?

A tangential question, or not, I feel obliged to point out that you are asking completely the wrong question.

The right question is to ask how these charities (non-profit institutions of higher learning are charities) justify screwing the adjuncts?

To ask your question is to pit worker against worker.

plus your version better serves my self-serving rant.

[Overused]

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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner

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3rdFooter
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quote:
Originally posted by Ender's Shadow:

I used to work in IT. The public sector employer I worked for introduced a job evaluation scheme based on levels of skills demonstrated in the job. A few years later they had to introduce a 'market supplement' for IT staff because they had the option of higher paid employment elsewhere. This is because IT staff make a visible, measurable contribution to the bottom line by their projects;

After 20+ years in the IT industry, all on the demand side, I would love to see this traceable visibility. Frankly, I call.

Many 'professions' including IT, law, accounting and marketing would be hard pushed to explain the value of the work they do.

quote:

therefore there will be competition for our skills while we can be shown to make the company more by our presence than we are being paid. Bucking markets is a BAD IDEA; they will come and bite you.

See, back in the good old days, the public sector used to underpay but offered plenty of learning opportunities and straight experience that those not promoted to higher things could sell in the market for bigger bucks. Thus we ignored the market trends somewhat, the tax-payer got cheaper labour and industry got a supply of trained experienced staff. Extensive outsourcing has put paid to this. The low entry wages probably also put a bit of a brake on overall wage inflation.

Actually paying heed to market trends has proved a rather BAD IDEA. We have let the market pick the pricing model and are getting bitten by the price of basic contracting staff.

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saysay

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quote:
Originally posted by Belle Ringer:
She fussed at the boss, whose response was, "he asked for it, you didn't."

I had a colleague in the business school who used to swear that any differences in how much men and women were paid were likely due to the fact that all of our women graduates simply accepted the first offer a company made them in terms of salary, while most of our male graduates negotiated a higher starting salary.

It was more complicated than that, though, since women who took a harder line in negotiating were more likely to be seen as 'not a team player' while men were more likely to be seen as 'assertive' and the type the company should employ. Making the situation even more complicated were people's fields of concentration... etc. etc.

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I'll tell you all about it when I see you again"
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cliffdweller
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quote:
Originally posted by saysay:
quote:
Originally posted by Belle Ringer:
She fussed at the boss, whose response was, "he asked for it, you didn't."

I had a colleague in the business school who used to swear that any differences in how much men and women were paid were likely due to the fact that all of our women graduates simply accepted the first offer a company made them in terms of salary, while most of our male graduates negotiated a higher starting salary.

It was more complicated than that, though, since women who took a harder line in negotiating were more likely to be seen as 'not a team player' while men were more likely to be seen as 'assertive' and the type the company should employ. Making the situation even more complicated were people's fields of concentration... etc. etc.

Pay equity is complicated by many things, that no doubt being one. Another would be the tendency for women to choose "mommy tracks" (taking breaks in career for childrearing) more often then men (at least until recently). Of course those things (whether or not women tend to ask for what they want, how they're perceived when they are, and who stays home w/ young children) are all culturally determined as well (with the addition of the obvious biological factor). Major sociological shifts like this don't happen as quickly or easily as it may initially seem.

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Ender's Shadow
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quote:
Originally posted by 3rdFooter:
quote:
Originally posted by Ender's Shadow:

I used to work in IT. The public sector employer I worked for introduced a job evaluation scheme based on levels of skills demonstrated in the job. A few years later they had to introduce a 'market supplement' for IT staff because they had the option of higher paid employment elsewhere. This is because IT staff make a visible, measurable contribution to the bottom line by their projects;

After 20+ years in the IT industry, all on the demand side, I would love to see this traceable visibility. Frankly, I call.

Many 'professions' including IT, law, accounting and marketing would be hard pushed to explain the value of the work they do.

Come step out of the sea and look back.

When I phone up my utility company, they don't have to look for my file on paper, they find it on computer. When I want to pay for something by credit card, there's a confirmation that the card is still valid. ATMs give me money. Policeman on the beat can identify stolen / uninsured / untaxed car immediately. DNA testing. Word processing. Spreadsheets. Email - saving how many stamps per year? Supermarket know exactly what they are selling - so can restock immediately. These all represent enormous savings...

quote:
Originally posted by 3rdFooter:
quote:
Originally posted by Ender's Shadow:

therefore there will be competition for our skills while we can be shown to make the company more by our presence than we are being paid. Bucking markets is a BAD IDEA; they will come and bite you.

See, back in the good old days, the public sector used to underpay but offered plenty of learning opportunities and straight experience that those not promoted to higher things could sell in the market for bigger bucks. Thus we ignored the market trends somewhat, the tax-payer got cheaper labour and industry got a supply of trained experienced staff. Extensive outsourcing has put paid to this. The low entry wages probably also put a bit of a brake on overall wage inflation.

Actually paying heed to market trends has proved a rather BAD IDEA. We have let the market pick the pricing model and are getting bitten by the price of basic contracting staff.

My point about market wages was a reflection of the reality that if you don't pay what's out there, you WILL lose staff. I entirely agree that there are other issues that aren't reflected in outsourcing prices, but the core problem - staff enticed away by higher wages elsewhere - is something which the public sector can't avoid when it happens.

--------------------
Test everything. Hold on to the good.

Please don't refer to me as 'Ender' - the whole point of Ender's Shadow is that he isn't Ender.

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tclune
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quote:
Originally posted by Ender's Shadow:
Come step out of the sea and look back.

When I phone up my utility company, they don't have to look for my file on paper, they find it on computer. When I want to pay for something by credit card, there's a confirmation that the card is still valid. ATMs give me money. Policeman on the beat can identify stolen / uninsured / untaxed car immediately. DNA testing. Word processing. Spreadsheets. Email - saving how many stamps per year? Supermarket know exactly what they are selling - so can restock immediately. These all represent enormous savings...

Sorry, but you don't have a clue. It's not your fault -- technical education of any sort is horrifyingly bad at helping their charges see the world through any eyes but their own.

For me, the nature of my job radically changed when I worked for one of the sharpest businessmen I ever met. He required everyone he hired to read the company business plan. And he explained clearly that "the bottom line" is not just some waffly business expression. There are things that are overhead and things that are profit centers. Never the twain shall meet. Just being good for the business doesn't mean a damned thing if you don't show up in the revenue stream.

You get paid because you are good for the business. Everybody does. But most folks don't show up as a source of revenue on the P&L. And that's a problem. Once I understood this concept, I pushed to include software maintenance contracts in what we offered to customers. They would pay a yearly fee for the software like they did for the hardware. Viola! Suddenly, we appeared as a line item in the revenues column. That fundamentally changes how an operation is viewed within the business.

You (and every other techie on the planet) has been brainwashed to believe that you're amazingly important to the bottom line, but you continue to show up on the books as nothing but overhead. You are a drain on the business.

Change how the business accounts for you. Find any activity that you do for customers that the company can actually bill for. Instead of "saving the company forty-three million dollars a year" or some such BS, show up as having generated twenty one thousand dollars of billings for the company. That small amount of real money is worth ninety seven trillion bluster dollars.

Just one last small story. I worked for another man and tried pulling the "savings" BS (I was so frigging stupid at the time that I didn't even know that I was BSing). I carefully prepared a presentation showing that he would save tens of thousands of dollars of my time if he just spent a few hundred dollars on a software package that I wanted. He listened politely and then said, "Yeah, but I've already paid for your time." If you understand the truth he was presenting, you are well on your way to understanding the difference between BS and P&L.

--Tom Clune

[ 21. October 2012, 00:35: Message edited by: tclune ]

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lilBuddha
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Funny that. Much of management are not in the direct revenue stream, but their contribution is valued still.

ETA: Side note on employee value: I read a study that indicated, in general, tall people are paid more than short people with equivalent backgrounds.

[ 21. October 2012, 04:24: Message edited by: lilBuddha ]

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Arethosemyfeet
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quote:
Originally posted by Ender's Shadow:
My point about market wages was a reflection of the reality that if you don't pay what's out there, you WILL lose staff. I entirely agree that there are other issues that aren't reflected in outsourcing prices, but the core problem - staff enticed away by higher wages elsewhere - is something which the public sector can't avoid when it happens.

Which is why the capitalist system is inherently unjust. Pay has nothing to do with how hard you work or how skilled you are or even how valuable your work is. It's simply luck of the draw and how greedy and demanding you're willing to be.
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Ender's Shadow
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quote:
Originally posted by Arethosemyfeet:
Which is why the capitalist system is inherently unjust. Pay has nothing to do with how hard you work or how skilled you are or even how valuable your work is. It's simply luck of the draw and how greedy and demanding you're willing to be.

You're jumping too far in your conclusions here. Classical economics argues that employers will evaluate the contribution of the marginal employee to the firm (the one making the lowest contribution) and add more until that contribution equals the cost of that employee. This, of course, is a gross oversimplification, but gives us an insight to how things work.

If the employees cost more to employ than they are contributing, then someone has got to pay the difference. Somehow. If you impose a minimum wage, then if employers would take on more staff because their firm has become more profitable, they won't. If you cap the amount people can be paid, then they won't necessarily be employed by the most productive firm. But note that ideally people will be rewarded in accordance with their amount of effort, because that is reflected in their value to the employer. That some skills are in short supply and so people need to be paid more to exercise those skills, should be balanced by more people gaining those skills in the medium term; there is a clear role for government in providing suitable training in that way. However at some point people are being paid for the effort required to gain those skills and the additional responsibilities that go with their role; if you don't recognise that in some way, of which pay is a good means, then people will choose an easier life. For instance I declined the extra pay of being 'on call', as well as offers of overtime, because the extra money wasn't worth it to me.

But a lot of the whinging about pay distribution being unfair - except that associated with executive pay - reflects choices that people make when they are young. If you choose to study arts not sciences, then you don't have a right to complain if later in life scientists are paid a lot more than you.

As ever, capitalism is not ideal, but it's the best option we've got; all the others really don't work as well at raising the poor out of poverty in the medium term.

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Test everything. Hold on to the good.

Please don't refer to me as 'Ender' - the whole point of Ender's Shadow is that he isn't Ender.

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Taliesin
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I don't know how relevent (to the thread) this is, but my husband has worked for the same company for 9 years. He started at a very low place because he wrecked his career by taking time out to raise children.
He jumped side and up a couple of times, but then hit a ceiling because he'd come an unusual route.

they kept saying, you don't have this or that kind of experience. So he did a lot of extra work - unpaid - to get the experience and became a very valuable member of that dept. Eventually he applied for and got a promotion that was only advertise internally and carried a salary that was a 30% increase.

HR said, yes we want you to do the job (to the best of your considerable ability and without supervision or further training) but we can only pay £-- because company policy says no one can have more than 10% pay increase.

WTF.

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Arethosemyfeet
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quote:
Originally posted by Ender's Shadow:
As ever, capitalism is not ideal, but it's the best option we've got; all the others really don't work as well at raising the poor out of poverty in the medium term.

That is not borne out by the evidence. Social democracy has a far better record on this front than free market capitalism. Norway, Sweden, Finland, Denmark, Germany all have more regulation of the market and less poverty than Britain and the US. The wages of those at the bottom end of society have actually gone down in real terms in Britain since the 1970s. Besides, just because some other systems are worse doesn't mean we've found the best.

Studying sciences or humanities is rarely solely a matter of choice, it is a matter of talent and enjoyment. I studied maths and physics because I enjoyed them and was good at them. The student who studied history won't have worked any less hard than I did, and they certainly don't have an easier job now. In any case, a system that punishes for 50 years choices made at age 16 or even earlier is an incredibly poor one.

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Curiosity killed ...

Ship's Mug
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Ender's Shadow, you're basing your argument on classic economics. Do all the basic underlying assumptions of classic economics hold after the banking crisis and the growth of India and China? Can we assume continuing economic growth? Will pricing of materials and wage costs still follow those ideas? How good are we being at costing in environmental and other costs?

I'm unconvinced we can continue worshipping at the shrine of the free market, and suspect the current pain is part of a bigger change in how we order the world economically and socially.

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Mugs - Keep the Ship afloat

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Doublethink.
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I work in the NHS, I have a friend who works the same profession I do privately. She makes double what I do for half the number of hours per week. I have the option to do this. I don't because I believe in the public provision of healthcare free at point of use. (Despite the currently shitty conditions and being used a as political football all the damn time.)

It's not all about the money, for every worker.

One important concept of 'fair' in terms and conditions is to be able to earn enough to cover your basic needs, and to have enough leave provision to have a decent family/private life.

The rationale being that companies ultimately exist to serve society and the market exists to serve us, not the other way round. The provisions we make to allow them to work, we make so that they can deliver to all of us a standard of living we want/need.

Frankly, it horrifies me that anyone could have only 5 days paid leave a year - and that somehow vacation time and sick leave are being seen as a equivalent.

Legislation is supposed to be there to prevent the profit motive from destroying the lives of the working poor.

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All political thinking for years past has been vitiated in the same way. People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome. George Orwell

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tclune
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quote:
Originally posted by lilBuddha:
Funny that. Much of management are not in the direct revenue stream, but their contribution is valued still.

I'm sure you think this is funny, but the reality is that management is the part of business that has been squeezed more than any other. It is a rare company that has anywhere near the management staff that it had thirty or forty years ago. The reason is that middle managers are nothing but overhead.

--Tom Clune

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Sober Preacher's Kid

Presbymethegationalist
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quote:
Originally posted by Curiosity killed ...:
Ender's Shadow, you're basing your argument on classic economics. Do all the basic underlying assumptions of classic economics hold after the banking crisis and the growth of India and China? Can we assume continuing economic growth? Will pricing of materials and wage costs still follow those ideas? How good are we being at costing in environmental and other costs?

I'm unconvinced we can continue worshipping at the shrine of the free market, and suspect the current pain is part of a bigger change in how we order the world economically and socially.

We've known the classical economics is not a sufficient description of economics since the 1930's, in both political and academic circles that matter in the US, UK and other countries.

The sort of economics Ender's Shadow is using, marginalism, has distinct limitations that its practitioner's are loathe to admit. Marginalism focuses on the margin, which is a derivative, like speed is a derivative of position. If we want to know the actual pay function of a firm, the margin is information but we need more information than that, the derivative does not completely describe the function.

Marginalism also defines itself in a supply/demand framework and assumes that participants are equal; it refuses to look at power inequalities. Of course if you have market power and don't want it questioned, that is if you are part of the capitalist elite, this framework is very attractive. Focus on power inequalities is a hallmark of Marxism and Socialism which is why the political version of marginalism, Liberalism, is anti-Marxist.

Keynesianism began as an attempt to correct the flaws of Liberalism as an economic theory while keeping the good bits (relatively free markets at the local level). It was a wrap-around to take care of a few of the pesky, insoluble leftovers. It quickly absorbed a few socialist in the name of equality and demand management (think pensions, which stabilize consumption and promote social equity). In the 1940's and 50's, the mainstream Keynesian answer to pricing labour was Unions and Free Collective Bargaining. Unions equalized market power between employer and employee and let both sides engage in informed collective bargaining between market equals.

Mainstream Keynesianism, as practised in policy circles from the 1940's-1960's has a flaw in that you have to be a bit inconsistent about the details and about money & government when you switch between the micro and macro levels. This inconsistency was systematically attacked starting in the 1970's, which saw a revival of marginalism and Liberalism in the form of Neoliberalism.

The policies of neoliberalism, by trying to recreate the policies of the classic liberalism of the 1920's managed to reproduce the 1930's in the form of the current economic depression.

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NDP Federal Convention Ottawa 2018: A random assortment of Prots and Trots.

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RuthW

liberal "peace first" hankie squeezer
# 13

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quote:
Originally posted by tclune:
quote:
Originally posted by lilBuddha:
Funny that. Much of management are not in the direct revenue stream, but their contribution is valued still.

I'm sure you think this is funny, but the reality is that management is the part of business that has been squeezed more than any other. It is a rare company that has anywhere near the management staff that it had thirty or forty years ago. The reason is that middle managers are nothing but overhead.

--Tom Clune

Except they're not. No one is. It's just a feature of the way these things are accounted for that says some people are overhead and others produce revenue. The real truth is that every position in a company or organization contributes to what the company or organization does or produces. If all the apparently non-revenue-producing workers were to vanish, companies wouldn't function. The people with the billable hours are the proximate cause of the revenue, but they are not the sole cause, and the folks being called overhead are a necessary cause of that revenue.

I recently read this article in Slate about the value of good supervisors. Folks at the Stanford Graduate School of Business studied the value of supervisors in a large company and found that

quote:
Replacing a supervisor from the bottom 10 percent of the pool with one from the top 10 percent increases output about as much as adding a 10th worker to a nine-worker team.
So I'm pretty dubious about the claim that middle managers are all overhead.

[ 21. October 2012, 22:39: Message edited by: RuthW ]

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Doublethink.
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# 1984

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I think a fundamental problem with a lot of business analysis, is the false premise that a business exists either solely or primarily to make a profit.

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All political thinking for years past has been vitiated in the same way. People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome. George Orwell

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Latchkey Kid
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This was explicitly the policy of a telcom I worked for.
"The purpose of .... is to make money"

No mention of providing a telecommunications service. No concern for customers. No concern to act ethically (and I read carefully). If they had a group going out and robbing banks that would have been OK as far as the policy was concerned.

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'You must never give way for an answer. An answer is always the stretch of road that's behind you. Only a question can point the way forward.'
Mika; in Hello? Is Anybody There?, Jostein Gaardner

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Belle Ringer
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quote:
Originally posted by Latchkey Kid:
This was explicitly the policy of a telcom I worked for.
"The purpose of .... is to make money"

No mention of providing a telecommunications service. No concern for customers. No concern to act ethically (and I read carefully). If they had a group going out and robbing banks that would have been OK as far as the policy was concerned.

That sounds about right, the only question management would ask about a proposed bank robbery is: "what's the downside?", not is it ethical or legal.
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tclune
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quote:
Originally posted by RuthW:
So I'm pretty dubious about the claim that middle managers are all overhead.

As I said up-thread, pretty much everyone who works for a company contributes to it. That's not what I'm saying. But saying that they are overhead is as bland a statement as saying that you are speaking prose. It's simply a fact that they don't show up in the reveneue stream. That's not an attack, but a fact.

Now, I will go on to make another point that is more like a criticism: once I understood how my CEO viewed the business, I changed the way that I worked. For example, I rewrote the fundamental support of our medical device so that it was run by an interpreter. What this means is that it was very easy to change the report generation, the database, the analysis, and even what data the instrument collected. I did that so that we had an enhanced opportunity to bill for software custom work. My goal was to put the software department "below the line," and it changed the way we looked at what our job was. We were substantially more entrepeneurial. In truth, we were substantialy more in line with what the CEO wanted us to be.

There is a very unhealthy attitude among techies that their job is computers, not the business of the company that they work for. This focus on contributing to the bottom line, at least for me, transformed that mindset into something that was much more congenial to the companies that I have worked for.

I think that the traditional middle manager used to suffer from a similar focus on things that were not really central to the business. Breaking out of that mindset is important to maximizing your value to the organization. And looking for ways to show up on the revenue stream is the "royal road" to getting with the program. Or so ISTM.

--Tom Clune

[ 22. October 2012, 01:11: Message edited by: tclune ]

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Enoch
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When you say 'compensation', do you mean what we'd call 'wages' or do you mean the amount of compensation paid for things like industrial injuries, things given up, etc?

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Brexit wrexit - Sir Graham Watson

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tclune
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# 7959

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quote:
Originally posted by RuthW:
I recently read this article in Slate about the value of good supervisors. Folks at the Stanford Graduate School of Business studied the value of supervisors in a large company and found that

quote:
Replacing a supervisor from the bottom 10 percent of the pool with one from the top 10 percent increases output about as much as adding a 10th worker to a nine-worker team.
So I'm pretty dubious about the claim that middle managers are all overhead.
Just one more point: this Stanford study makes absolutely no sense to me. Glossing over the strange notion that you could rank managers top to bottom so that you could identify the top 10% from the bottom 10%, could you honestly tell the difference between the performance of a group that had 9 members and one that had 10?

--Tom Clune

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cliffdweller
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If it's a manufacturing company, surely that would be easy to calculate. How many widgits per hour (WPH) did the 9 person team produce v. the WPH of the 10 person team.

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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner

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tclune
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quote:
Originally posted by cliffdweller:
If it's a manufacturing company, surely that would be easy to calculate. How many widgits per hour (WPH) did the 9 person team produce v. the WPH of the 10 person team.

Your notion of manufacturing seems stuck in the 1930s.

--Tom Clune

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cliffdweller
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quote:
Originally posted by tclune:
quote:
Originally posted by cliffdweller:
If it's a manufacturing company, surely that would be easy to calculate. How many widgits per hour (WPH) did the 9 person team produce v. the WPH of the 10 person team.

Your notion of manufacturing seems stuck in the 1930s.

--Tom Clune

Probably. I've never worked in manufacturing, in fact, every place I've worked for the last 40 years has been a non-profit, so my experience is based more on what I see in movies or American sitcoms. Perhaps not the most accurate picture.

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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner

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RuthW

liberal "peace first" hankie squeezer
# 13

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quote:
Originally posted by tclune:
Just one more point: this Stanford study makes absolutely no sense to me. Glossing over the strange notion that you could rank managers top to bottom so that you could identify the top 10% from the bottom 10%, could you honestly tell the difference between the performance of a group that had 9 members and one that had 10?

If they're all showing up in the revenue stream, wouldn't it be really easy to measure and compare their performance? If you really can't measure their performance, then figuring out what they ought to get paid could be done by lottery.

quote:
Now, I will go on to make another point that is more like a criticism: once I understood how my CEO viewed the business, I changed the way that I worked. For example, I rewrote the fundamental support of our medical device so that it was run by an interpreter. What this means is that it was very easy to change the report generation, the database, the analysis, and even what data the instrument collected. I did that so that we had an enhanced opportunity to bill for software custom work. My goal was to put the software department "below the line," and it changed the way we looked at what our job was. We were substantially more entrepeneurial. In truth, we were substantialy more in line with what the CEO wanted us to be.

There is a very unhealthy attitude among techies that their job is computers, not the business of the company that they work for. This focus on contributing to the bottom line, at least for me, transformed that mindset into something that was much more congenial to the companies that I have worked for.

I think that the traditional middle manager used to suffer from a similar focus on things that were not really central to the business. Breaking out of that mindset is important to maximizing your value to the organization. And looking for ways to show up on the revenue stream is the "royal road" to getting with the program. Or so ISTM.

Sounds like a recipe for turning internal support staff into support staff for customers and thus jacking up the bill. If I were one of those customers I'd be somewhat less than thrilled.

And what about support staff who really can't be put into the revenue stream? In the 90s I worked the switchboard/receptionist desk at a subsidiary of United Technologies that manufactured and repaired aircraft components. I can't imagine their customers would have been happy about seeing an extra little fee on their bills to cover the charge imposed for me routing phone calls and computerized faxes and tracking down project managers and quality control people to answer questions for customers. And what about HR? Someone's got to keep the company in line with the employment laws and company personnel policies -- how do you propose they show up in the revenue stream?

I understand completely that you'd want to pay people more who were contributing more to the revenue stream. It's just that that doesn't really happen. Very frequently it is the people who do the actual work who are at the bottom of the pay scale. The guys at the United Technologies facility who did the hands-on work of manufacture and repair were paid far less than the managers and the people in quality control. The work of the guys on the floor had the most direct connection to the revenue stream, but weren't paid anything near what the managers and QC folks got. Or even what the HR manager got -- she was pure overhead but making a very pretty penny.

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tclune
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# 7959

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quote:
Originally posted by RuthW:
If they're all showing up in the revenue stream, wouldn't it be really easy to measure and compare their performance? If you really can't measure their performance, then figuring out what they ought to get paid could be done by lottery.
<snip>
Sounds like a recipe for turning internal support staff into support staff for customers and thus jacking up the bill. If I were one of those customers I'd be somewhat less than thrilled.

I guess I'm really bad at expressing myself. I thought that I had made it clear that this was about an attitude adjustment, not about the amount of money you brought in. What is important is to see the business through the eyes of the owner (or top management, if you work for a publicly traded company that is not closely held.)

Once you do that, one of two things will happen: 1. You'll leave because you don't share their vision. I did that when Philips took over the medical operation of Agilent.
2. You will become a better employee. The amount of money that folks who aren't directly involved in sales are ever going to generate is not a huge part of the company's bottom line. It is more a matter of the attitude than the cash.

Consider the interpreter that I created for our medical device. This was something that made a lot of difference to the customers, and they were happy to pay for the opportunity to get a custom machine that did just what they want. A few examples:
1. Each hospital seems to have its own standard for counting radioactivity (which was part of our device.) Some want to count to a particular number of decay counts, because they use the square root of the counts to estimate the standard deviation. Some like to run multiple measurements and apply a Student's T-test to toss out outliers and repeat until they get a good reading, etc. The approach that was used was decided in-house by the physicist on staff with the involvement of the medical staff. We were the only device that would implement their particular protocol. The small additional billing for having a custom machine that did just what they wanted was a source of joy for them, not a burden.

2. Many customers had particular desires on how to format their medical reports. It was a matter of considerable aggrevation to them to have what was at that time the usual "take it or leave it." Getting the information that they wanted on the reports, and having it on the location that they wanted to see it, was something that delighted the customers. They did not feel ripped off by the incremental cost of getting just what they wanted -- they simply had never had the option before.

3. One interesting relatively common practice was that hospitals had medical researchers who would use our imaging device at night with animals when there wasn't a large patient load. The researchers were irritated by the standard databases of similar machines -- they had to enter phony insurance data before the machines would work, and they didn't have the ability to enter the research-specific data that they needed to track. Because we could customize the machine, we could create a research database that tracked the information that they needed. Again, the researchers did not feel ripped off by this for-fee service -- they were thrilled.

4. We actually found completely new uses for the machine because of the flexibility of the interpreter. We made sales to a company that manufactured something called a flood source, because we could program the device to calibrate the flood source and then print out a report specifying the actual uniformity of the radiation in the source. These people could not have afforded to buy a commercial instrument to do this, because it would have been a one-off and thus extravagantly expensive. Our custom development costs added about 10% to the cost of our standard commercial instrument. Again, the customer was thrilled.

In short, if you think that this kind of focus means that you are looking for ways to steal from the customer, I have expressed myself poorly. What looking to the bottom line does is open up your view of your job in a way that is beneficial to the company -- something that generally reflects value to the customer or it just doesn't succeed.

--Tom Clune

[ 23. October 2012, 00:00: Message edited by: tclune ]

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RuthW

liberal "peace first" hankie squeezer
# 13

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Thanks, Tom -- I had clearly misunderstood what you meant. I can definitely see the value in looking at your job that way for some workers, maybe a lot of them.

It seems to me, however, that the proposal that workers should be entrepreneurial about their jobs presumes certain conditions under which a lot of people don't work. The local hotel workers who would like to get $13/hour and 5 days of leave a year -- and who have seen their efforts to unionize repeatedly squelched -- would to my way of thinking do better to consider their health and not try to do more back-wrenching labor that will benefit the people at the top of the company hierarchy and not them. Making more beds in a shift is not going to get them a raise; it's going to put them on disability. At best.

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ken
Ship's Roundhead
# 2460

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Tom, what have those good things you did for the medical instrumentation have to do with whether workers count as overheads or not? One the one hand you were improving the serrvice to customers, (& for all your earlier disdain about "techies" it seems to have been a technological improvement, not a management one); on the other hand you have a sttement about accounting practices.

Nor is it anything to do with workers aligning themselves with the business of the company. Or rather this one event was about that, because in this case the bosses did seem to know what business they were in - but they often don't. There are just as many times when managrment gets it wrong (more times I suspect), whens workers have ideas for changing processes that might improve the service to the customer and management just ignore them or worse. Sometimes on principle. "Its not your job to think, you are here to do what I tell you." A lot of managers - a lot of whole industries would rather have obedient automatons than workers with any kind of intellectual, imaginitive, emotional involvment in what they are doing.

And fascinating though it is none of this is relevant to the OP in the slightest. The original question is which of the various models proposed for setting wages actually operate in real life, and whether or not they are fair, and whether or not it matters. Your contributions assume that one of them is in fact the case and that it doesn't matter whether its fair or not, and then go on to describe how to game the system and get more money out of it. All very interesting but not really the same topic at all.

[ 24. October 2012, 14:04: Message edited by: ken ]

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Ken

L’amor che move il sole e l’altre stelle.

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tclune
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# 7959

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quote:
Originally posted by ken:
Tom, what have those good things you did for the medical instrumentation have to do with whether workers count as overheads or not?

Creating custom software resulted in billings generated by the software group directly. In my business, software is typically not billed for separately -- you buy the device, and software in included.

Yes, it is true that the company would be unable to sell the instrument without software, but it is not a separate line item. My point -- which took me a long time to become clear on, and apparently is equally obscure to many folks here -- is that showing up as a separate billable item makes a huge difference in how you are viewed within the organiztion and in how you view your job.

First, you have direct contact with the customers. If you aren't engaged in a technical business, you may have a hard time recognizing how polluted any information is that flows through the sales department. If a salesman visits a customer who wants him to go away, and so says that he would never consider buying any instrument that didn't have a propeller on it, the salesman comes running back insisting that everyone in the world demands that there be a propeller on their medical imaging device.

But, when you get contact with the real customers, you find out that there are lots of ordinary things that mean a lot to the customer but don't survive the filtering process. If you go on-site because you are customizing their product, you gain a lot of really valuable insight. Saying that this is a side-effect of the company's billing for your services, and could be achieved by other means again misses the point -- companies don't do such things if you aren't part of the revenue generating process.

There are so many aspects to being involved directly in the P&L that are very hard to communicate if you've never been part of the process. One of the most important things that I learned from my old CEO was the difference between mass marketing and custom marketing. If you are going to make a million of something, the price will be based on the cost of production. If you are making one-offs, the price will be based on the value to the customer.

This has HUGE ramifications for how you should run your company -- and before Ed explained this, I never quite got why the many start-ups I worked for were badly run. Every start-up I'd worked for before had come to a point where some fast-talking sleezoid would suggest that "we could sell a million of our device" if only we would... Ed was the first man I ever worked for who, when approached this way said, "Not interested. We're in the business of selling ONE, not a million." We did not lose focus by chasing mirages. He was a very good boss.

The top guy is probably a businessman first and foremost. If you hope to understand what he wants (or, if need be, understand that he really is a fool and you should get your resume together), you need to view the business through those eyes. In my experience, the way to accomplish that is to find a way for the company to bill for your services.

--Tom Clune

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Posts: 8013 | From: Western MA | Registered: Jul 2004  |  IP: Logged
RuthW

liberal "peace first" hankie squeezer
# 13

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Fine, but what does any of that have to do with whether or not the amount that people get paid can be set in a fair manner and if so what that fair manner is? Your techie people apparently have leverage and the ability to change their position in their organization. I personally have an extremely tiny bit of leverage and no ability to change my position in the organization I work for, though I would if given the opportunity point out that how well I do one part of my job does have an effect on one aspect of our revenue stream. People making beds in the local hotels have been prevented from gaining the leverage that unionization would bring, and so have gotten people in non-profit organizations to advocate for them and put a measure on the ballot -- these private sector workers will get a raise if the voters want them to get it.

Is any of this fair? Can pricing labor be fair? Should it be fair? When I was a teenager I frequently complained that things weren't fair, and my father always responded, "Life isn't fair." One day I finally lost my temper and asked him, "So what are you doing about that?!" Life is still not fair, but I never had to hear that inane response from him.

Posts: 24453 | From: La La Land | Registered: Apr 2001  |  IP: Logged
tclune
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# 7959

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quote:
Originally posted by RuthW:
Fine, but what does any of that have to do with whether or not the amount that people get paid can be set in a fair manner and if so what that fair manner is? Your techie people apparently have leverage and the ability to change their position in their organization.

Well, I can only speak to what I know. And, unfortunately, most techies can't buy a vowel when it comes to understanding the business they are in. Relative to this thread, the point is that you need to understand your value to the company and maximize it if you want to exert any leverage to increase your salary. Whether that serves the ultimate good of society or not is above my pay grade.

--Tom Clune

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Posts: 8013 | From: Western MA | Registered: Jul 2004  |  IP: Logged
ken
Ship's Roundhead
# 2460

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quote:
Originally posted by tclune:
Relative to this thread, the point is that you need to understand your value to the company and maximize it if you want to exert any leverage to increase your salary. Whether that serves the ultimate good of society or not is above my pay grade.

But it also happens to be the subject of this conversation [Smile]

quote:
Originally posted by tclune:

First, you have direct contact with the customers. If you aren't engaged in a technical business, you may have a hard time recognizing how polluted any information is that flows through the sales department.[...]

But, when you get contact with the real customers, you find out that there are lots of ordinary things that mean a lot to the customer but don't survive the filtering process.

That's all very specific to just one kind of business though. Everywhere has its own quirks.

I used to work for a very large American company. A large part of my job was installing and maintaining system software and utilities on computers that were used by programmers to develop application software that was used by the central administration of the company, such as the accountants and lawyers and punlic affairts department and so on. The applications used by the people who made stuff to sell, and the applications used by the people who sold the stuff were run on different computers in different buildings (indeed countries). There was no way my individual contribution - which was in some ways highly technical, absurdly so - was every going to appear on a bill sent to anybody.

Right now I do a similar job for a university. I took a pay cut when I came here and get paid less than I would if I was still in the private sector - which is really the kind of thing this topis is about it seems to me - but the day-to-day job is basically the same thing, minor details changed due to changes in how we use computers. Which aren't really important of course because the job isn't really about computers its about helping people do what they need to do, which is why the second dumb question you ask someone with a problem, rught after "is it switched on?" really is "what are you actually trying to do?" And - this is hardly a state secret - we sometimes find ourselves sitting between the central administration of the university (which includes our bosses) and the students and academics and researchers (who if we have to grout out our brains and replace them by corproratophiliac clones, we could call "customers", though I never would to their faces). That is, we often know more about what the students and academics, those "customers", want than the management does and we can find ourselves explaining to our bosses in middle-management why something is important - because they tend to be focussed on the internals of the organisation, they are sometimes too inward-looking, and they often don't see enough tf the people they are actually working for - who in this case are those "customers" the students and researchers, because the institution is meant to be for them.

Sometimes its a lot worse than that of course. Back in the private sector I was once on a project that was meant to fail. Quite literally, the managers in charge of it wanted it to fail. They didn't tell anyone of course. I only found out later. So aligning our "technical" contribution to the stated needs of the management was completely pointless. They didn't care. They would probably have prefered us to work badly than well - not that they could say that. They ended up with quite a lot of money because of their deliberate failure, and being paid more than those who had worked for the project to succeed. Is that fair or moral?

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Ken

L’amor che move il sole e l’altre stelle.

Posts: 39579 | From: London | Registered: Mar 2002  |  IP: Logged
tclune
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# 7959

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quote:
Originally posted by ken:
quote:
Originally posted by tclune:
Relative to this thread, the point is that you need to understand your value to the company and maximize it if you want to exert any leverage to increase your salary. Whether that serves the ultimate good of society or not is above my pay grade.

But it also happens to be the subject of this conversation [Smile]

Is it? My impression is that it's mostly about bitching that somebody else is making more than you are. If you actually want to consider fairness, as I mentioned at the start of the thread, it is hard to see any basis for paying anyone more than anyone else. "Equal pay for equal work" is really not that at all -- it is "I want more money, but I don't want true equality with folks who are earning less than me." It's BS masquerading as social justice AFAICS.

--Tom Clune

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Dafyd
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# 5549

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quote:
Originally posted by tclune:
Relative to this thread, the point is that you need to understand your value to the company and maximize it if you want to exert any leverage to increase your salary.

I think there's a difference between understanding your value to the company as perceived by your accounting department and your actual value to the company.

The accounting department may well for their convenience divide workers into overhead and revenue generation. And then they may come to mistake this administrative convenience for a fact about the actual nature of the jobs that are being done. But that doesn't mean that it is in any way a fact about the actual value of people's jobs. It's like dividing plants into fruit and vegetables and then insisting that this culinary classification tells you something significant about botany.

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we remain, thanks to original sin, much in love with talking about, rather than with, one another. Rowan Williams

Posts: 10567 | From: Edinburgh | Registered: Feb 2004  |  IP: Logged
cliffdweller
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# 13338

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quote:
Originally posted by Dafyd:
quote:
Originally posted by tclune:
Relative to this thread, the point is that you need to understand your value to the company and maximize it if you want to exert any leverage to increase your salary.

I think there's a difference between understanding your value to the company as perceived by your accounting department and your actual value to the company.

The accounting department may well for their convenience divide workers into overhead and revenue generation. And then they may come to mistake this administrative convenience for a fact about the actual nature of the jobs that are being done. But that doesn't mean that it is in any way a fact about the actual value of people's jobs. It's like dividing plants into fruit and vegetables and then insisting that this culinary classification tells you something significant about botany.

Tom offers good advice from the worker's standpoint-- there's wisdom in figuring out what is valuable to the boss and then making an effort to communicate your work product to him/her in terms that will be appreciated. Grating, perhaps, but a reality of life.

otoh, it strikes me that any boss who cannot appreciate the value of "overhead" personnel and how their work contributes to the bottom line is too stupid to be in a position with any more authority than a kindergarten crayon monitor. I am resigned to the reality that in some cases, that is precisely the state of affairs.

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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner

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RuthW

liberal "peace first" hankie squeezer
# 13

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quote:
Originally posted by tclune:
quote:
Originally posted by ken:
quote:
Originally posted by tclune:
Relative to this thread, the point is that you need to understand your value to the company and maximize it if you want to exert any leverage to increase your salary. Whether that serves the ultimate good of society or not is above my pay grade.

But it also happens to be the subject of this conversation [Smile]

Is it? My impression is that it's mostly about bitching that somebody else is making more than you are.
If that's your impression, then I am the one who has not been clear. I really did mean for the topic of this conversation to be whether fairness in pay is possible and desireable. I do tend to think everything should be fair! Fair, I tell you! But if this is exposed as an unrealistic expectation on my part, it wouldn't be the first time such a thing has happened.

quote:
If you actually want to consider fairness, as I mentioned at the start of the thread, it is hard to see any basis for paying anyone more than anyone else.
I wonder how it would be if everyone got exactly the same hourly rate of pay and the only difference in people's pay came from some people working more hours. Probably the stuff of science fiction of the Ursula Le Guin sort, I realize.

quote:
"Equal pay for equal work" is really not that at all -- it is "I want more money, but I don't want true equality with folks who are earning less than me." It's BS masquerading as social justice AFAICS.
True equality eludes us, yes, but couldn't we lessen the level of inequality?
Posts: 24453 | From: La La Land | Registered: Apr 2001  |  IP: Logged
Soror Magna
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# 9881

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My memory of how the concept of pay equity began goes somewhat as follows: someone noticed that there were jobs that were typically done by men that paid more than comparable jobs done by women. "Comparable" in this context means the jobs had similar levels of, for example:
  • educational requirements i.e. high school, trade ticket, Ph.D.
  • decision-making, independence
  • professional or personal liability, consequences of error
  • physical effort, dexterity, volume, pace of work
  • reading, writing and speaking skills
  • interpersonal skills, supervision, training others
  • technical skills, operating equipment, using tools
  • environmental hazards in the workplace, other risks

The example I remember hearing a lot was truck drivers and nurses* - some training and education, but not a degree; long days and shift work; some physical effort; specialized technical skills and knowledge; record-keeping and complying with legal requirements; errors could injure or kill oneself or others; and so on. Truck drivers (predominantly male) made much more money than nurses (predominantly female) even though their levels of skill, training and effort were comparable. Pay equity aims to eliminate the discrepancies in pay between "gendered" occupations.

Even getting equal pay for equal work was a battle. It wasn't that long ago that it was considered PERFECTLY REASONABLE to pay a woman less than a man IN THE SAME JOB because the man was supporting a family, but the woman was just ... oh, I don't know, earning pin money or looking for a husband. For those who have no idea how one could possibly compare jobs, here's a start:
Tips on How to Implement Pay Equity

There are four job evaluation factors required by the Canadian Human Rights Act: skill, effort, responsibility and working conditions. Pay equity is "likely to improve employee morale, reduce workforce turnover and increase the ability to predict wage costs."

@ RuthW: I have often fantasized about everyone being paid the same amount of money. One positive is that no one would be in a job they hated just because it paid really well.

*Remember, this was in the Sixties and Seventies. Obviously the pay situation is vastly different today, due not just to pay equity, but also the aging population, higher nursing qualifications, and the price of gas. And Sandy Pope is challenging James Hoffa. [Biased]

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"You come with me to room 1013 over at the hospital, I'll show you America. Terminal, crazy and mean." -- Tony Kushner, "Angels in America"

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