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What about this situation: X and Y are places with similar cost of living, but people in X have lower wages and they are used to live cheaper (i.e. they buy le
by zura 15y ago
What about this situation:
X and Y are places with similar cost of living, but people in X have lower wages and they are used to live cheaper (i.e. they buy less goodies, etc..) than in Y.
In other words, maybe it would be better (more fair) to compare costs of living instead of average salaries?
- balsamiq 15y agoI think that's too subjective. We look at average local salaries as a way to see "what does the local market say this job is worth right now?" - basically deferring the range to what the market decides is fair.
- zura 15y agoOn the other hand, you seem to use cost of living comparison for profit sharing. Quote from: http://blogs.balsamiq.com/team/2011/09/12/profitsharing/ http://blogs.balsamiq.com/team/2011/09/12/profitsharing/ "9. then all weighed by the cost of living in each location: this is important because it's fair. The fact that we're using cost of living instead of average wages is even more fair (i.e. Italy has low wages relative to the cost of living)." The last sentence, regarding Italy, corresponds to the situation I described. So, if it is fair for profit sharing, then it also seems logical to treat it as fair for salaries as well.
- phamilton 15y agoCompetitive wages are incentive to not leave. Profit sharing is incentive to do good things. The former must be dependent upon local wages. The latter is able to incorporate fairness.
- zura 15y agoI wouldn't differentiate it regarding fairness. Salary + Profit == Compensation for the work done. Compensation should be fair.