5 ms·

Can you elaborate a bit about what you mean by inefficient? People mean a lot of different things when they use the word “efficient” in a financial/economic con

Can you elaborate a bit about what you mean by inefficient? People mean a lot of different things when they use the word “efficient” in a financial/economic context.

domlebo70 7y ago
Well would you pay 10 dollars a liter to fill your car up, when you can get perfectly good fuel for $1.50 a liter?
- mouzogu 7y ago
  very bezosian. not sure you could, or should, apply this analogy to a human being though.
- benreesman 7y ago
  I’m not sure I follow the analogy, but I certainly pay extra for high-octane gasoline when I’m filling up a performance automobile.
  - uk_programmer 7y ago
    But you wouldn't pay £1.30 for high octane petrol when you could pay £1.25 across the road.
- fsloth 7y ago
  There is a difference between a team of people, and the set of people working individually. An extreme example - there is a reason a SEAL team is called a team. This is the problem with wage discussions. People equate a measurable commodity like gasoline to the number of hours worked at a specific job. Sometimes this is a sufficient analogue, but often times reward mechanisms are more complex than that. There is a good reason rewards mechanisms in jobs are a lively field of academic study. People just forget this does not only apply to top managers.
  - uk_programmer 7y ago
    I am a contractor and I would expect to be paid the market rate for my skillset. The market rate for a .NET developer in the UK is about £350-400 a day (outside of London) in the UK. An Angular JS developer gets between £450 and £500. Thus at the moment (despite not being fond of it) I am (re-)learning Angular JS in my spare time so I can go for these higher paid roles. The same is generally true for the salaried market. I appreciate there is a bit of a difference with a team of people. But generally how else are you going to gauge the compensation of any individual reliably other than market rate?
    - fsloth 7y ago
      "But generally how else are you going to gauge the compensation of any individual reliably other than market rate?" If you were a business owner, what would be the correct referral market rate if the people whose compensation you are gauging is a tight knit team with years of experience on your specific business and customer needs?
      - Xylakant 7y ago
        Another thing that often gets forgotten is the cost of (long term) employees leaving. They take so much institutional knowledge with them. I'm currently watching a case unfold at a client where all people with intimate knowledge of a crucial component left - the cost of training up new people on that component will eclipse any reasonable increase in wage that they could have given to the team, not even accounting for the increase in bug-rate while the new folks figure out all the pitfalls that software tends to accumulate over time. Documentation helps, but people knowing their way around the code is better.
        uk_programmer 7y ago
        I think us developer overstate how important we think this is. Unless time to market is a consideration then they will probably just accept throwing people at it and then get some poor souls to clean up afterwards.
- throwqwerty 7y ago
  but people aren't commodity goods so what exactly does that example prove?
bufferoverflow 7y ago
They are paying more than they have to for the low skilled workers. Which means that extra money is not going towards hiring better high skilled workers or just more workers in general. Everything else being equal, an average business would be outcompeted if they did something like that. If you still think what they are doing is efficient, take it further and further. Start increasing the salaries more and more. Very soon you will be able to afford one worker. A very expensive janitor maybe?
- Seenso 7y ago
  > They are paying more than they have to for the low skilled workers. Which means that extra money is not going towards hiring better high skilled workers or just more workers in general. > Everything else being equal, an average business would be outcompeted if they did something like that. You're operating using an oversimple mental model. For instance: you appear to believe a person will make a fixed contribution in a role, regardless of their wage. That's obviously false when you consider things like the demotivating effects of being underpaid or under-appreciated.

Can you elaborate a bit about what you mean by inefficient? People mean a lot of different things when they use the word “efficient” in a financial/economic context.

domlebo70 7y ago

Well would you pay 10 dollars a liter to fill your car up, when you can get perfectly good fuel for $1.50 a liter?

mouzogu 7y ago
very bezosian. not sure you could, or should, apply this analogy to a human being though.
benreesman 7y ago
I’m not sure I follow the analogy, but I certainly pay extra for high-octane gasoline when I’m filling up a performance automobile.
- uk_programmer 7y ago
  But you wouldn't pay £1.30 for high octane petrol when you could pay £1.25 across the road.
fsloth 7y ago
There is a difference between a team of people, and the set of people working individually. An extreme example - there is a reason a SEAL team is called a team. This is the problem with wage discussions. People equate a measurable commodity like gasoline to the number of hours worked at a specific job. Sometimes this is a sufficient analogue, but often times reward mechanisms are more complex than that. There is a good reason rewards mechanisms in jobs are a lively field of academic study. People just forget this does not only apply to top managers.
- uk_programmer 7y ago
  I am a contractor and I would expect to be paid the market rate for my skillset. The market rate for a .NET developer in the UK is about £350-400 a day (outside of London) in the UK. An Angular JS developer gets between £450 and £500. Thus at the moment (despite not being fond of it) I am (re-)learning Angular JS in my spare time so I can go for these higher paid roles. The same is generally true for the salaried market. I appreciate there is a bit of a difference with a team of people. But generally how else are you going to gauge the compensation of any individual reliably other than market rate?
  - fsloth 7y ago
    "But generally how else are you going to gauge the compensation of any individual reliably other than market rate?" If you were a business owner, what would be the correct referral market rate if the people whose compensation you are gauging is a tight knit team with years of experience on your specific business and customer needs?
    - Xylakant 7y ago
      Another thing that often gets forgotten is the cost of (long term) employees leaving. They take so much institutional knowledge with them. I'm currently watching a case unfold at a client where all people with intimate knowledge of a crucial component left - the cost of training up new people on that component will eclipse any reasonable increase in wage that they could have given to the team, not even accounting for the increase in bug-rate while the new folks figure out all the pitfalls that software tends to accumulate over time. Documentation helps, but people knowing their way around the code is better.
      - uk_programmer 7y ago
        I think us developer overstate how important we think this is. Unless time to market is a consideration then they will probably just accept throwing people at it and then get some poor souls to clean up afterwards.
throwqwerty 7y ago
but people aren't commodity goods so what exactly does that example prove?

bufferoverflow 7y ago

They are paying more than they have to for the low skilled workers. Which means that extra money is not going towards hiring better high skilled workers or just more workers in general. Everything else being equal, an average business would be outcompeted if they did something like that. If you still think what they are doing is efficient, take it further and further. Start increasing the salaries more and more. Very soon you will be able to afford one worker. A very expensive janitor maybe?

Seenso 7y ago
> They are paying more than they have to for the low skilled workers. Which means that extra money is not going towards hiring better high skilled workers or just more workers in general. > Everything else being equal, an average business would be outcompeted if they did something like that. You're operating using an oversimple mental model. For instance: you appear to believe a person will make a fixed contribution in a role, regardless of their wage. That's obviously false when you consider things like the demotivating effects of being underpaid or under-appreciated.