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"But if you offer too much compensation, management and employees may begin to feel fat and happy and lose the motivation to maximize long-term value for shareh
by ruswick 13y ago
"But if you offer too much compensation, management and employees may begin to feel fat and happy and lose the motivation to maximize long-term value for shareholders."
God forbid if your employees are happy.
In all seriousness, I don't even remotely understand this mindset. Why would paying your employees less than they deserve or less than is optimal encourage them to "stay hungry." If anything, this is going to deter them from working inordinately hard or may drive them from the company altogether. If a company pays well, the employees have more to lose and are likely have a greater appreciation for their employer.
I just can't fathom how they expect that, by paying less than they ought to or less than their employees deserve, the employees will be more inclined to work hard.
This speaks to a fundament misinterpretation of employee motivation and is incredibly disquieting.
- zalew 13y agoEveryone knows a janitor won't clean the floor properly if he doesn't feel motivated to maximize long-term value for shareholders.
- ntomaino 13y agoPaying management less than they deserve would not encourage them to stay hungry. But paying them more than they deserve based on market dynamics could possibly cause them to lose motivation. This is definitely not a rule that occurs 100% of the time, but my point is its something to be aware of, and salaries need to be more transparent so better-educated salary decisions can be made (for all participants of the tech ecosystem).
- consz 13y agoDo you have any proof of that, other than your own anecdotal evidence?
- ntomaino 13y agoNope. Not sure how one might prove something like that. I'm citing it based on experience. Again, not saying that this is always the case, just that it is a counter intuitive phenomenon to be aware of.
- droithomme 13y agoI doubt he has anecdotal evidence or he'd have mentioned specific cases in his article. It's a theory he's working on as part of his efforts to convince the best and the brightest to work for his company, a high risk unstable start up, for below market rates. There's one of these articles out from some guy at a VC backed firm who is unable to afford competent people every few weeks. The best idea these guys ever have is to write articles telling all the "coders" that they are not as special as they think they are and would be lucky to work for a fine firm such as theirs in return for vague promises of magic beans. Meanwhile I have no problem at all hiring the best and the brightest. It's super easy to find good people and hire them and how to do so is not a secret at all.
- chrisbennet 13y agoWhy the down votes folks? Counter his experiences with your own examples or theory, tell him you disagree with what he thinks he saw (even though you weren't there) but sheesh, its not like he said something worth down voting. (I'm going to feel silly if the down voted post was full of racial slurs and has been edited since the down votes to remove them.)
- mhuffman 13y agoI think the keyword "optimal" in your 4th sentence is what he meant. There is an old saying that "You should pay employees enough so that they don't have to worry about making more money, but not enough so that they won't have to continue working." *edit: One thing to keep in mind is that everyone is not out to do the best job they can, and it is difficult to determine this until after you have worked with them for a while.