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We already see it working well with professional sports; salary differences of professional athletes on the same team are absolutely humongous; yet Tom Brady do

by astura 8y ago

We already see it working well with professional sports; salary differences of professional athletes on the same team are absolutely humongous; yet Tom Brady doesn't get bullied for making more than his teammates. Better yet, other football players can look at Tom Brady's salary and know what they have to do to get a similar salary. Everyone knows they make less than their boss, yet people don't bully their boss. Nurses know they make less than doctors, but they don't bully them. Adjunct professors don't bully full professors. So we can "handle" non-transparent pay when its built into job duties and titles, so it's not that much of a stretch to extend it to employees with similar job duties and titles. The government sector already has transparent pay and ~17% of private companies have transparent pay, yet we don't see bullying there. In fact, some preliminary research suggests employees feel more valued and feel their pay if fairer when there is pay transparency. When people don't know what their colleagues are making they tend to assume they are being underpaid. If you're seeing mass bullying then you've got a problem that can't be solved simply by hiding salaries. >think of what often happens to the best pupil in the class, where you have "grades transparency" What? What happens to them? They get to speak at graduation? The vast majority of adults are mature enough to understand that different people have different work outputs, different value to the company, and therefore have different salaries. We also are mature enough to understand that tenure and seniority are rewarded. We already accept that people get promotions at different intervals, and we already accept that only one person gets the "employee of the month" parking spot and spot bonus.

TimesOldRoman 8y ago
In sports, it is always fairly clear who contributes to a win, and to what degree. In my experience, business do a horrible job of measuring performance. It's 95% subjective.
- citrablue 8y ago
  It's only been the last 5-6 years that baseball has really looked objectively at "what contributes to a win". Most front offices now use that information, but as of 6-7 years ago, it was not at all clear. Teams pay salaries based on market price, not what actually contributes to wins. In an efficient market, these correlate, but sports contracts are by no means efficient. The Padres' handed $144 million last winter to Eric Hosmer, who never projected to be much above average. There's still a ways to go.
- astura 8y ago
  Salary is a poor measure of performance because there's no salary transparency so nobody can negotiate their salary effectively!! It's a tautology! A self fulfilling prophecy. Athletes get paid based on market rate, past performance, future potential, and a whole bunch of other factors (union agreements, budget, need, fan preference, health, cost of living, etc., etc.) they are not paid based on "contribute to win rate." It's just like every other employee though. Lawyers probably don't contribute to the company's success more than the engineers, but lawyers are paid more because of the market rate. In fact, since athletes have long term contracts that specify their pay no matter how well they play, and indeed, even if they play at all, their pay is even further removed from current performance than most other employees. It's not uncommon for an athlete to not play an entire season and still make millions of dollars, it's what fans called "dead money." Bobby Bonilla hasn't played baseball in the last 15 years yet he was paid $1.19 million this year by the Mets. That's twice as much as Jacob DeGrom was paid, who is a Cy Young finalist. Objectively Jacob DeGrom contributed to more wins than Bobby Bonilla. Take a look at Rusney Castillo, he's being paid $72.5 million to pay minor league baseball. No minor leaguer is worth $70+ million. However, it's financially advantageous for the Red Sox to keep him in the minor leagues due to the luxury tax, so he remains overpaid. https://www.bostonglobe.com/sports/redsox/2018/03/10/contract-keeps-rusney-castillo-minor-league-limbo/efIg6waR2S6RsxB4rKF3LK/story.html https://www.bostonglobe.com/sports/redsox/2018/03/10/contrac...

by astura 8y ago

TimesOldRoman 8y ago

In sports, it is always fairly clear who contributes to a win, and to what degree. In my experience, business do a horrible job of measuring performance. It's 95% subjective.

citrablue 8y ago
It's only been the last 5-6 years that baseball has really looked objectively at "what contributes to a win". Most front offices now use that information, but as of 6-7 years ago, it was not at all clear. Teams pay salaries based on market price, not what actually contributes to wins. In an efficient market, these correlate, but sports contracts are by no means efficient. The Padres' handed $144 million last winter to Eric Hosmer, who never projected to be much above average. There's still a ways to go.
astura 8y ago
Salary is a poor measure of performance because there's no salary transparency so nobody can negotiate their salary effectively!! It's a tautology! A self fulfilling prophecy. Athletes get paid based on market rate, past performance, future potential, and a whole bunch of other factors (union agreements, budget, need, fan preference, health, cost of living, etc., etc.) they are not paid based on "contribute to win rate." It's just like every other employee though. Lawyers probably don't contribute to the company's success more than the engineers, but lawyers are paid more because of the market rate. In fact, since athletes have long term contracts that specify their pay no matter how well they play, and indeed, even if they play at all, their pay is even further removed from current performance than most other employees. It's not uncommon for an athlete to not play an entire season and still make millions of dollars, it's what fans called "dead money." Bobby Bonilla hasn't played baseball in the last 15 years yet he was paid $1.19 million this year by the Mets. That's twice as much as Jacob DeGrom was paid, who is a Cy Young finalist. Objectively Jacob DeGrom contributed to more wins than Bobby Bonilla. Take a look at Rusney Castillo, he's being paid $72.5 million to pay minor league baseball. No minor leaguer is worth $70+ million. However, it's financially advantageous for the Red Sox to keep him in the minor leagues due to the luxury tax, so he remains overpaid. https://www.bostonglobe.com/sports/redsox/2018/03/10/contract-keeps-rusney-castillo-minor-league-limbo/efIg6waR2S6RsxB4rKF3LK/story.html https://www.bostonglobe.com/sports/redsox/2018/03/10/contrac...