5 ms·

If you permanently eliminate the position for one line worker, there is essentially zero impact to the company; it continues along with only a 0.01% drop of eff

by biot 14y ago

If you permanently eliminate the position for one line worker, there is essentially zero impact to the company; it continues along with only a 0.01% drop of efficiency. If you permanently eliminate the CEO position, there is multiple orders of magnitude greater impact to the company. That's why the compensation for each role is different.

delinka 14y ago
But that's not the comparison. It's CEO versus all the employees, not a single employee.
- biot 14y ago
  I thought the salient point was the relative compensation of the average CEO to the average employee. What insight do you gain by comparing a mass exodus of every employee to a vacation by a single CEO? Isn't it trivially obvious that if every single person in a company takes off at once, that the company is effectively stopped regardless of who you compare it to?
  - sbov 14y ago
    Because he gave his bonus to 10,000 employees, not 1 other random employee.
rayiner 14y ago
> That's why the compensation for each role is different. This is wrong. It's Econ 101. Salaries are the price of labor, and like any other market, the price of labor is the result of equilibrium in the supply and demand in the labor force.
DannoHung 14y ago
> If you permanently eliminate the CEO position, there is multiple orders of magnitude greater impact to the company. Has this been actually measured?
dredmorbius 14y ago
You've just reiterated the value theory of labor, first expressed by Karl Marx. I take it you're a Communist then, and follow Communist thinking in other economic thought as well. The classical economic theory of pricing holds that goods (and labor) are exchanged at a point where the supply and demand curves cross. This, according to the principles of free markets as expressed first by Adam Smith and subsequently refined, and has certain prerequisites including low barrier to entry, equal access to information, fair and open competition (and a lack of collusion on the part of either buyers and sellers), and a clear understanding of value. All of which undoubtedly hold true for the CEO employment market, I trust. https://en.wikipedia.org/wiki/Labor_theory_of_value https://en.wikipedia.org/wiki/Labor_theory_of_value https://en.wikipedia.org/wiki/Free_market https://en.wikipedia.org/wiki/Free_market
- biot 14y ago
  Oh jeez. Either I should have thought through my last sentence better, or followed my instinct by not participating in this discussion. You are correct on the supply & demand explanation. And no, I am not now nor have I ever been a member of the communist party. :)
  - dredmorbius 14y ago
    I make the point because you're not the first person I've heard use the same argument. Most recent that comes to mind was a banker interviewed on the BBC. I was listening, critically as I frequently do, and realized that the view he was espousing was flagrantly Marxist. Amusing, that.
- rayiner 14y ago
  I don't understand the down votes here. Other than the snark, it's right on point.
  - dredmorbius 14y ago
    The snark is also on point :)
- 14y ago
Produce 14y ago
>If you permanently eliminate the CEO position, there is multiple orders of magnitude greater impact to the company. Then why do companies with flat hierarchies exist and operate just fine? You don't need someone at the top because you don't need a top. See: * http://mariewiere.com/2012/03/04/a-company-that-manages-without-managers/ http://mariewiere.com/2012/03/04/a-company-that-manages-with... * http://agile-commentary.blogspot.co.uk/2009/09/bees-self-organize-why-cant-we.html http://agile-commentary.blogspot.co.uk/2009/09/bees-self-org... The interesting thing about people, and any social, intelligent agents is that they self-organize. Even bees (intelligent, social agents) do this: http://www.pnas.org/content/96/22/12611.full http://www.pnas.org/content/96/22/12611.full So do ants: http://en.wikipedia.org/wiki/Patterns_of_self-organization_in_ants http://en.wikipedia.org/wiki/Patterns_of_self-organization_i... We can even manage traffic without direction: http://thecityfix.com/blog/naked-streets-without-traffic-lights-improve-flow-and-safety/ http://thecityfix.com/blog/naked-streets-without-traffic-lig... The biggest myths of our societies are that we need a hierarchy, directions and managers. We're quite capable of leading ourselves and getting everything done. And more efficiently, no less.

by biot 14y ago

delinka 14y ago

But that's not the comparison. It's CEO versus all the employees, not a single employee.

biot 14y ago
I thought the salient point was the relative compensation of the average CEO to the average employee. What insight do you gain by comparing a mass exodus of every employee to a vacation by a single CEO? Isn't it trivially obvious that if every single person in a company takes off at once, that the company is effectively stopped regardless of who you compare it to?
- sbov 14y ago
  Because he gave his bonus to 10,000 employees, not 1 other random employee.

rayiner 14y ago

> That's why the compensation for each role is different. This is wrong. It's Econ 101. Salaries are the price of labor, and like any other market, the price of labor is the result of equilibrium in the supply and demand in the labor force.

DannoHung 14y ago

> If you permanently eliminate the CEO position, there is multiple orders of magnitude greater impact to the company. Has this been actually measured?

dredmorbius 14y ago

You've just reiterated the value theory of labor, first expressed by Karl Marx. I take it you're a Communist then, and follow Communist thinking in other economic thought as well. The classical economic theory of pricing holds that goods (and labor) are exchanged at a point where the supply and demand curves cross. This, according to the principles of free markets as expressed first by Adam Smith and subsequently refined, and has certain prerequisites including low barrier to entry, equal access to information, fair and open competition (and a lack of collusion on the part of either buyers and sellers), and a clear understanding of value. All of which undoubtedly hold true for the CEO employment market, I trust. https://en.wikipedia.org/wiki/Labor_theory_of_value https://en.wikipedia.org/wiki/Labor_theory_of_value https://en.wikipedia.org/wiki/Free_market https://en.wikipedia.org/wiki/Free_market

biot 14y ago
Oh jeez. Either I should have thought through my last sentence better, or followed my instinct by not participating in this discussion. You are correct on the supply & demand explanation. And no, I am not now nor have I ever been a member of the communist party. :)
- dredmorbius 14y ago
  I make the point because you're not the first person I've heard use the same argument. Most recent that comes to mind was a banker interviewed on the BBC. I was listening, critically as I frequently do, and realized that the view he was espousing was flagrantly Marxist. Amusing, that.
rayiner 14y ago
I don't understand the down votes here. Other than the snark, it's right on point.
- dredmorbius 14y ago
  The snark is also on point :)
14y ago

Produce 14y ago

>If you permanently eliminate the CEO position, there is multiple orders of magnitude greater impact to the company. Then why do companies with flat hierarchies exist and operate just fine? You don't need someone at the top because you don't need a top. See: * http://mariewiere.com/2012/03/04/a-company-that-manages-without-managers/ http://mariewiere.com/2012/03/04/a-company-that-manages-with... * http://agile-commentary.blogspot.co.uk/2009/09/bees-self-organize-why-cant-we.html http://agile-commentary.blogspot.co.uk/2009/09/bees-self-org... The interesting thing about people, and any social, intelligent agents is that they self-organize. Even bees (intelligent, social agents) do this: http://www.pnas.org/content/96/22/12611.full http://www.pnas.org/content/96/22/12611.full So do ants: http://en.wikipedia.org/wiki/Patterns_of_self-organization_in_ants http://en.wikipedia.org/wiki/Patterns_of_self-organization_i... We can even manage traffic without direction: http://thecityfix.com/blog/naked-streets-without-traffic-lights-improve-flow-and-safety/ http://thecityfix.com/blog/naked-streets-without-traffic-lig... The biggest myths of our societies are that we need a hierarchy, directions and managers. We're quite capable of leading ourselves and getting everything done. And more efficiently, no less.