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My argument is that as the tech side of the organization takes on more and more of the operation of the business, it also needs to be taking on more of the rewa

My argument is that as the tech side of the organization takes on more and more of the operation of the business, it also needs to be taking on more of the rewards. For example if the expectation is that a engineering team designs, builds and maintains the machine twenty four hours a day that is responsible for the majority (if not all) of the firms profits then the majority of the rewards must flow there. One the other hand, traditional methods for doing this have fallen by the wayside. With performance overhangs and other chicanery, what was once a lottery ticket is now a lottery ticket that someone will almost certainly try to steal from you once it becomes worth something. Instead of rewarding engineers who keep the lights on, we make them look for another job every 2 years to keep with the market. People like to say tech is eating the world, tech is doing virtually all the killing but the hangers on seem to do the bulk of the eating.

shoo 5y ago
Ah, capitalism! The company makes surplus profits that can be extracted by shareholders (and executives and employees, although these get labelled as expenses, not profits) if it is able to sell goods or services at a price point much higher than the cost of producing the service. The cost of keeping the machine running is an operational expense. There is supply and demand in the labour market. If the team keeping the machine running generates $100m of profits for the company and costs $5m in compensation, but it is possible to hire a similar team at market rates to do a comparable job for $5m , then it doesn't make much sense to pay the team more than $5m. The excess value of $95 m generated by the team's activities can be captured as profit. It's also important not to neglect the contributions of other roles. The machine is only able to produce revenue because it is matched with customers who are a good fit for the service the machine delivers and are willing to pay for it. If there are no customers then the machine and the engineering team that support it produce no revenue. So arguably the sales team that is able to identify potential customers and help them understand if renting access to the machine could help them also provide a large amount of value to the company. If you take the same high performing engineering team that builds and operates a valuable service in one company, and drop them into a different business context where there are simply much fewer paying customers, or the sales team isn't able to deliver, then the value the engineering team are able to generate in the new situation may be zero or negative. Maybe most of the value generated by the service isn't due to the team who built and maintain it, but the surrounding business context. Leverage is a big thing. The highest paying roles are often in situations with more leverage (in huge orgs or huge projects), not because the work is necessary more skilled or harder than work in other smaller scale situations. If some of the salespeople and engineers believe they are getting paid disproportionately little compared to the value they create, they could consider banding together and starting their own venture where they would be the owners, not the employees. Much easier said than done, and much easier to stomach if starting in a situation where they have the financial safety net and career connections so they'll be okay if the business fails.

shoo 5y ago

Ah, capitalism! The company makes surplus profits that can be extracted by shareholders (and executives and employees, although these get labelled as expenses, not profits) if it is able to sell goods or services at a price point much higher than the cost of producing the service. The cost of keeping the machine running is an operational expense. There is supply and demand in the labour market. If the team keeping the machine running generates $100m of profits for the company and costs $5m in compensation, but it is possible to hire a similar team at market rates to do a comparable job for $5m , then it doesn't make much sense to pay the team more than $5m. The excess value of $95 m generated by the team's activities can be captured as profit. It's also important not to neglect the contributions of other roles. The machine is only able to produce revenue because it is matched with customers who are a good fit for the service the machine delivers and are willing to pay for it. If there are no customers then the machine and the engineering team that support it produce no revenue. So arguably the sales team that is able to identify potential customers and help them understand if renting access to the machine could help them also provide a large amount of value to the company. If you take the same high performing engineering team that builds and operates a valuable service in one company, and drop them into a different business context where there are simply much fewer paying customers, or the sales team isn't able to deliver, then the value the engineering team are able to generate in the new situation may be zero or negative. Maybe most of the value generated by the service isn't due to the team who built and maintain it, but the surrounding business context. Leverage is a big thing. The highest paying roles are often in situations with more leverage (in huge orgs or huge projects), not because the work is necessary more skilled or harder than work in other smaller scale situations. If some of the salespeople and engineers believe they are getting paid disproportionately little compared to the value they create, they could consider banding together and starting their own venture where they would be the owners, not the employees. Much easier said than done, and much easier to stomach if starting in a situation where they have the financial safety net and career connections so they'll be okay if the business fails.