3 ms·
> Why would an employee work for less than the value they are creating? Because if the employee worked for greater than or equal to the value they created, the
by tmoertel 12y ago
> Why would an employee work for less than the value they are creating?
Because if the employee worked for greater than or equal to the value they created, the expected return on hiring them would be less than or equal to zero, and nobody would choose to hire them.
- ghshephard 12y agoI understand why employers won't pay employees more than the value they create - my question was the opposite direction. Why (outside of a monopolistic or otherwise non competitive market) would an employee who is delivering a lot of value based solely on their contribution chose to work for significantly less than that value. Clearly there needs to be some profit for their employer, but, using my example of a lawyer - there are thousands of law firms, and if a Lawyer is capable of driving $500K/of billable value, based solely on their effort - why would they chose to work for $50K when they could go to another law firm and work for $100K (or $150K, etc...) I'm using an extreme example, but the same concept applies elsewhere. The reasons I can think of why a person might not do this: o Lack of information - the employee may not realize how much value their effort drives. o Monopoly for the purchaser of their services - they may work in a niche field, in which their is only one purchaser for their service.