3 ms·

Or phrased another way, 10% of employees deliver 50% of the value. If you use pay as a (very) rough proxy for value. When phrased that way it seems conservative

by eloff 7y ago

Or phrased another way, 10% of employees deliver 50% of the value. If you use pay as a (very) rough proxy for value. When phrased that way it seems conservative. Of course 10% of the people deliver half the value, I would have pegged it more like 10% deliver 80% of the value. And maybe it is more that way, because pay doesn't scale with value in most careers. CEOs being one of the few exceptions - and the value often dubious.

djrobstep 7y ago
This is incredibly circular. "The reason these people are highly paid is because they deliver value." "But what is value?" "Why it's what people get paid of course!" In reality, pay isn't at all a proxy for anything humans actually value. If it was, nurses and teachers would be extremely highly paid, while advertising executives and sharepoint consultants would be paid less than zero.
- derefr 7y ago
  > pay isn't at all a proxy for anything humans actually value Sure it is: pay is a proxy for how valuable a tool you are in your own boss's game of office politics. Executives and consultants are both incredibly powerful fiefdom-building tools within a company. Nurses and teachers, given their principles (and the horizontally-bureaucratic "slave of many masters" nature of medicine and education), are nearly the opposite.
- shoo 7y ago
  i agree that it is necessary to clearly separate "value delivered" from "value extracted". but i think you also need to talk about "value for who?" Who gains?. Who loses? e.g. advertising executives can deliver a large amount of value to the owners of companies by helping those companies generate demand and increase sales. But perhaps at the same time they create or destroy value for the people on the receiving end of the advertising (in the best case, discovering a product or service that genuinely helps them, in the worst case, tricking them into consuming a product or service that is harmful). There is probably also value destruction, spread in small amounts over large populations and large timescales, in terms of the opportunity cost of committing resources to producing whatever product or service was sold, instead of doing something else with those resources that would benefit a larger group of people, or a future group of people who don't exist yet. e.g. "i helped my mate Frank deliver a large amount of value by driving the getaway car after Frank robbed the bank". Frank has a business that generates value for himself. I helped Frank deliver that value from the bank to himself. Frank gives me a cut of the value. It is possible that we also may generate value for various other stakeholders by improving the velocity of currency throughout the local economy.
- tryptophan 7y ago
  >nurses and teachers would be extremely highly paid Nurses do quite well in the US. Its actually one of the best (education / ($ * time)) investments you can make. In the UK, they do terribly. In the usa teachers don't do so well either. Some would argue that the government involvement prevents their true value from being discovered. (Could you imagine trying to get your CS skills valued by society? I see tons of complaints about _management_ not valuing their workers properly(despite the comparatively high salaries for CS jobs). Do you think the government's/voters' assessment would be higher or lower?). >advertising executives and sharepoint consultants would be paid less than zero. Well, unless the people who hire them are total idiots in reality, perhaps the world is a bit more complicated than that and you may be missing part of the picture? Some things may be dumb/inelegant, and the engineer mindset takes over and make you angry at _such imperfection_ and how you could do it better! But at the end of the way it works well enough.
- eloff 7y ago
  Pay is a rough proxy for how much your employer values your product. Presumably your employer makes a profit out of your work, or they would fire you. This is the efficient market hypothesis applied to the labor market.
- atemerev 7y ago
  Pay is how other people value your work, by definition. Perhaps some people are not acting rationally in that regard... but nevertheless.
mikeash 7y ago
10% of employees deliver 50% of the scented flowers, if you use pay as a rough proxy for scented flowers. Big if, there.
- eloff 7y ago
  See what I wrote below about pay as a proxy, I won't copy and paste because it's against the rules. I think your objection is you are defining value as something other than economic value. I think from the context it should be obvious that's what I'm talking about, but I've got a whole thread of comments showing people didn't get it.
  - mikeash 7y ago
    I’m not entirely sure what the difference is between economic value and other sorts of value. My objection boils down to pay being an approximation of value and rarity. Picking fruit is extremely valuable but the pay is shit because workers are plentiful. Looking at employees as a product, pay is the price, value provided is essentially demand, and the relationship between the two depends heavily on supply.
    - eloff 7y ago
      Yes that's true, supply heavily skews the value of pay as a proxy for value. But to be fair I did call it out as being a very rough proxy. The idea was just to look at it from another angle and see if it makes sense.
scarface74 7y ago
So you think athletes deliver more “value” than teachers or doctors?
- TheSpiceIsLife 7y ago
  10% of athletes deliver more value than 50% of doctors and teachers. Probably.
  - scarface74 7y ago
    What type of “value” do athletes create?
    - malvosenior 7y ago
      Entertainment?
    - gerhardi 7y ago
      Culture, entertainment, motivation, thrill and experiences also for the spectators. It is well known that people around the world have enjoyed also watching sports for thousands of years. But as mentioned in another comment, only the very best make any real money from being an athlete.
- mynameishere 7y ago
  I don't. And the market bears that out. The median athlete earns zero.
  - scarface74 7y ago
    Yes and if you want to be pedantic, neither does the hobbyist developer. But if you are “earning zero”, you’re not a “worker” then are you?
- eloff 7y ago
  You are putting words in my mouth, because I didn't say anything of the sort. However, I'll take that position. Athletes provide a little value to a lot of people, versus teachers and doctors who provide lots of value to a very limited number of people. Athletes have way more leverage. The same can be true for authors, entertainers, computer programmers, etc. When it comes to getting paid it's all about leverage.
patientplatypus 7y ago
That's such utter and total dogshit.
- dang 7y ago
  Maybe so, but please don't post unsubstantive comments here.
deleted 7y ago
[deleted]
ivanhoe 7y ago
Those 10% wouldn't deliver anything without work and skills of the other 90%, so it's very hard to say who delivers the real value to the economy, it's a product of a group effort usually.
- malvosenior 7y ago
  That's definitely not true. Anyone who's ever worked in an office can tell you that most employees don't actually add much value and there are always a few superstars carrying the whole company. When you look at skill and talent distribution this shouldn't be shocking at all.
  - munk-a 7y ago
    Skill levels in offices definitely vary, but unless the person is utterly incompetent (and those people are few and far between) it's likely that people aren't more than 4-5x as productive as others in extreme cases and most people would likely fall within something like a 70% range. If someone feels like they do 99.999% of the work in an office of 50 people, they're probably just self-centered and lack any awareness of what the other 49 people are doing.
    - malvosenior 7y ago
      It's not that they're incompetent, it's just that they follow the rules designed by the really competent people. Such that nearly anyone could do their job. One of the scaling factors of excellent people is the ability to design systems others can leverage.
      - munk-a 7y ago
        Yea, people who can inspire competence are quite valuable to a company - but, while there certainly is a natural aptitude, people management is a trained profession now, and someone that is being people managed and gaining that benefit could likely have followed a different career path and become a people manager themselves - so there is cause for some pay disparity but that position isn't something that is unique to the individual.

by eloff 7y ago

djrobstep 7y ago

This is incredibly circular. "The reason these people are highly paid is because they deliver value." "But what is value?" "Why it's what people get paid of course!" In reality, pay isn't at all a proxy for anything humans actually value. If it was, nurses and teachers would be extremely highly paid, while advertising executives and sharepoint consultants would be paid less than zero.

derefr 7y ago
> pay isn't at all a proxy for anything humans actually value Sure it is: pay is a proxy for how valuable a tool you are in your own boss's game of office politics. Executives and consultants are both incredibly powerful fiefdom-building tools within a company. Nurses and teachers, given their principles (and the horizontally-bureaucratic "slave of many masters" nature of medicine and education), are nearly the opposite.
shoo 7y ago
i agree that it is necessary to clearly separate "value delivered" from "value extracted". but i think you also need to talk about "value for who?" Who gains?. Who loses? e.g. advertising executives can deliver a large amount of value to the owners of companies by helping those companies generate demand and increase sales. But perhaps at the same time they create or destroy value for the people on the receiving end of the advertising (in the best case, discovering a product or service that genuinely helps them, in the worst case, tricking them into consuming a product or service that is harmful). There is probably also value destruction, spread in small amounts over large populations and large timescales, in terms of the opportunity cost of committing resources to producing whatever product or service was sold, instead of doing something else with those resources that would benefit a larger group of people, or a future group of people who don't exist yet. e.g. "i helped my mate Frank deliver a large amount of value by driving the getaway car after Frank robbed the bank". Frank has a business that generates value for himself. I helped Frank deliver that value from the bank to himself. Frank gives me a cut of the value. It is possible that we also may generate value for various other stakeholders by improving the velocity of currency throughout the local economy.
tryptophan 7y ago
>nurses and teachers would be extremely highly paid Nurses do quite well in the US. Its actually one of the best (education / ($ * time)) investments you can make. In the UK, they do terribly. In the usa teachers don't do so well either. Some would argue that the government involvement prevents their true value from being discovered. (Could you imagine trying to get your CS skills valued by society? I see tons of complaints about _management_ not valuing their workers properly(despite the comparatively high salaries for CS jobs). Do you think the government's/voters' assessment would be higher or lower?). >advertising executives and sharepoint consultants would be paid less than zero. Well, unless the people who hire them are total idiots in reality, perhaps the world is a bit more complicated than that and you may be missing part of the picture? Some things may be dumb/inelegant, and the engineer mindset takes over and make you angry at _such imperfection_ and how you could do it better! But at the end of the way it works well enough.
eloff 7y ago
Pay is a rough proxy for how much your employer values your product. Presumably your employer makes a profit out of your work, or they would fire you. This is the efficient market hypothesis applied to the labor market.
atemerev 7y ago
Pay is how other people value your work, by definition. Perhaps some people are not acting rationally in that regard... but nevertheless.

mikeash 7y ago

10% of employees deliver 50% of the scented flowers, if you use pay as a rough proxy for scented flowers. Big if, there.

eloff 7y ago
See what I wrote below about pay as a proxy, I won't copy and paste because it's against the rules. I think your objection is you are defining value as something other than economic value. I think from the context it should be obvious that's what I'm talking about, but I've got a whole thread of comments showing people didn't get it.
- mikeash 7y ago
  I’m not entirely sure what the difference is between economic value and other sorts of value. My objection boils down to pay being an approximation of value and rarity. Picking fruit is extremely valuable but the pay is shit because workers are plentiful. Looking at employees as a product, pay is the price, value provided is essentially demand, and the relationship between the two depends heavily on supply.
  - eloff 7y ago
    Yes that's true, supply heavily skews the value of pay as a proxy for value. But to be fair I did call it out as being a very rough proxy. The idea was just to look at it from another angle and see if it makes sense.

scarface74 7y ago

So you think athletes deliver more “value” than teachers or doctors?

TheSpiceIsLife 7y ago
10% of athletes deliver more value than 50% of doctors and teachers. Probably.
- scarface74 7y ago
  What type of “value” do athletes create?
  - malvosenior 7y ago
    Entertainment?
  - gerhardi 7y ago
    Culture, entertainment, motivation, thrill and experiences also for the spectators. It is well known that people around the world have enjoyed also watching sports for thousands of years. But as mentioned in another comment, only the very best make any real money from being an athlete.
mynameishere 7y ago
I don't. And the market bears that out. The median athlete earns zero.
- scarface74 7y ago
  Yes and if you want to be pedantic, neither does the hobbyist developer. But if you are “earning zero”, you’re not a “worker” then are you?
eloff 7y ago
You are putting words in my mouth, because I didn't say anything of the sort. However, I'll take that position. Athletes provide a little value to a lot of people, versus teachers and doctors who provide lots of value to a very limited number of people. Athletes have way more leverage. The same can be true for authors, entertainers, computer programmers, etc. When it comes to getting paid it's all about leverage.

patientplatypus 7y ago

That's such utter and total dogshit.

dang 7y ago
Maybe so, but please don't post unsubstantive comments here.

deleted 7y ago

[deleted]

ivanhoe 7y ago

Those 10% wouldn't deliver anything without work and skills of the other 90%, so it's very hard to say who delivers the real value to the economy, it's a product of a group effort usually.

malvosenior 7y ago
That's definitely not true. Anyone who's ever worked in an office can tell you that most employees don't actually add much value and there are always a few superstars carrying the whole company. When you look at skill and talent distribution this shouldn't be shocking at all.
- munk-a 7y ago
  Skill levels in offices definitely vary, but unless the person is utterly incompetent (and those people are few and far between) it's likely that people aren't more than 4-5x as productive as others in extreme cases and most people would likely fall within something like a 70% range. If someone feels like they do 99.999% of the work in an office of 50 people, they're probably just self-centered and lack any awareness of what the other 49 people are doing.
  - malvosenior 7y ago
    It's not that they're incompetent, it's just that they follow the rules designed by the really competent people. Such that nearly anyone could do their job. One of the scaling factors of excellent people is the ability to design systems others can leverage.
    - munk-a 7y ago
      Yea, people who can inspire competence are quite valuable to a company - but, while there certainly is a natural aptitude, people management is a trained profession now, and someone that is being people managed and gaining that benefit could likely have followed a different career path and become a people manager themselves - so there is cause for some pay disparity but that position isn't something that is unique to the individual.