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The Gervais Principle, or The Office According to "The Office"
- lionhearted 17y agoIt gets this half-right/half-wrong: > While some may be losers in that sense too, they are primarily losers in the economic sense: those who have, for various reasons, made (or been forced to make) a bad economic bargain: they’ve given up some potential for long-term economic liberty (as capitalists) for short-term economic stability. Halfway with the author so far. Generally, being salaried is a bad economic bargain for people with the self-discipline and perseverance to go off on their own. There's other reasons it can be good - a friend of mine is a business consultant that's really good, really brilliant, could definitely run his own shop. But he makes decent enough coin and loves his work and coworkers, and said he doesn't want to deal with the highs and lows of self employment. He's trading off lifetime net income, most definitely, but maybe he's happier? I keep trying to convince him to do some kind of entrepreneurial project with me and failing, but maybe someday. He certainly is extremely happy. But anyway, I'm still with the author mostly. Next point: > Traded freedom for a paycheck in short. They actually produce, but are not compensated in proportion to the value they create... This is sometimes true. If your work isn't set on incentives, then you aren't compensated in proportion to the value you create. This relates to the above: If you want lifetime net income, look to get compensation tied to incentives as closely as possible. Being self employed and only getting paid for performance gets you there the fastest, but that doesn't only mean you only make more money! Some months you work very hard, and have LESS money at the end of the month for your troubles. This sucks quite badly when it happens. > ... (since their compensation is set by sociopaths operating under conditions of serious moral hazard). And herein lies the author's mistake - the reason people aren't compensated accordingly to their production is that it's incredibly hard to judge production. Jack Welch, one of the better HR people of all time, said he only got 2/3rds of his hiring decisions correct at the very end of his tenure and peak of his skills at GE. The person who holds back the coin from the productive salaried employee is not his boss or the company owner. It's the unproductive salaried employee. Great companies recognize highly productive people and try to compensate and reward them accordingly, but production is notoriously fickle and variable. Bosses and especially owners don't scheme to keep pay for productive people down - they want to pay stars, because they want to retain their stars. And if a competitor isn't paying their stars, they'll happily give them a raise and a signing bonus for jumping ship. It's just that it's so damn hard to evaluate who really is producing. The guy that produces 10x the normal amount of production for his job isn't having his pay thwarted by any "sociopaths", he's having it thwarted by colleagues who shuffle papers, schedule meetings, and make themselves appear busy while producing nothing of value. There's reasons (primarily stability, but others too) to stay in this arrangement, but if you want to maximize your net income, you need to move to a way where you get paid based on what you produce, and be willing to accept the swings and bad things that come with that. That's easy to do in measurable fields like sales. To do it in a more intangible field you might have to open your own company.
- gsmaverick 17y agoYou're last point was well presented. I have never looked at salary based compensation in that way. But it does make a lot of sense now.
- mr_luc 17y agopg wrote an essay about it. http://www.paulgraham.com/wealth.html http://www.paulgraham.com/wealth.html Subheading "What a Job Is", 5th paragraph down or so: In a company, the work you do is averaged together with a lot of other people's. You may not even be aware you're doing something people want. Your contribution may be indirect. But the company as a whole must be giving people something they want, or they won't make any money. And if they are paying you x dollars a year, then on average you must be contributing at least x dollars a year worth of work, or the company will be spending more than it makes, and will go out of business. And in the next subheading: I think the single biggest problem afflicting large companies is the difficulty of assigning a value to each person's work. For the most part they punt. In a big company you get paid a fairly predictable salary for working fairly hard. .... the company has no way of measuring the value of your work. Salesmen are an exception. It's easy to measure how much revenue they generate, and they're usually paid a percentage of it. If a salesman wants to work harder, he can just start doing it, and he will automatically get paid proportionally more. Gosh, that's a good essay.
- mrbgty 17y agoJust want to point out that "stars" doesn't always equate to value. There's lots of developers out there that create amazing software (produce a lot and do things which are technologically very difficult) which does nothing for the customer. If it does nothing for the customer, then what's the value? It's also not usually (at megacorp) the developers responsibility to decide what will be valuable to the customer.
- roc 17y ago"The guy that produces 10x the normal amount of production for his job isn't having his pay thwarted by any "sociopaths"" While it suits the company to identify and retain the productive, management's incentive is to minimally reward producers. Productive losers are, by definition, not those who will take a risk to ensure maximal compensation. Their wages are therefore easy pickings for a sociopath manager who is willing to take risks to ensure their own maximal compensation. The author has simply assumed that at some point any budget will cross a sociopath's desk, thereby guaranteeing the productive loser's compensation will be depressed in the sociopath's self-interest.
- deleted 17y ago[deleted]
- boredguy8 17y agoThis is the first blog post that's ever been good enough that I donated to the author merely for having written it. Both brilliant textual analysis and insightful social commentary - definitely worth the read. Or maybe I'm just constructing my delusional world to justify having spent $3 on a public blog post!
- Alex3917 17y agoYou're right, the author is insanely smart. My only real critique is that he is overly embracing of the sociopath concept, probably because his only personal experience comes from within organizations. If he ran his own business I think he'd be able to see this more objectively. Still, he gets a ton of credit for creating all the insights that he does.
- megaduck 17y agoI think if he ran his own business, he'd be completely unable to see his own position objectively. People always think that they're doing the right thing, often with the caveat of "under the circumstances". That's why having a cofounder can be so helpful. Hopefully, your self-serving instincts cancel out and only decisions that are mutually beneficial will make it through.
- netsp 17y agoI think he has a certain admiration for the sociopath.
- gaius 17y agoThey get the job done, no arguing with results.
- danspodcast 17y agoNah, me too. I hit that donate button without even a double take. Bravo author.
- chops 17y agoGoogle Cache, since the site isn't responding for me: http://74.125.95.132/search?q=cache:7rjRSf4HfywJ:www.ribbonfarm.com/2009/10/07/the-gervais-principle-or-the-office-according-to-the-office/+the+gervais+principle&hl=en&client=firefox-a&gl=us&strip=1 http://74.125.95.132/search?q=cache:7rjRSf4HfywJ:www.ribbonf...
- balding_n_tired 17y ago"Protestant Ethic will-to-power". Was that the wind in the weatherstripping, or Nietzche's ghost howling?
- RevRal 17y agoMacLeod’s “Loser” layer had me puzzled for a long time, because I was interpreting it in cultural terms: the kind of person you call a “loser.” While some may be losers in that sense too, they are primarily losers in the economic sense: those who have, for various reasons, made (or been forced to make) a bad economic bargain: they’ve given up some potential for long-term economic liberty (as capitalists) for short-term economic stability[....]The good news is that losers have two ways out, which we’ll get to later: turning sociopath or turning into bare-minimum performers. That makes all kinds of crazy sense.
- orangecat 17y agoYes, although I'd disagree that it's objectively a "bad bargain". You won't get rich quick, but if you have a basic understanding of finances and a moderate amount of self-discipline you can get rich slowly. If you don't want to go into management, I'd say that's a good bargain.
- seigenblues 17y agobut why should it be this way at all? The fact that their compensated wealth has become totally disconnected from the reality of productivity makes this a pretty shocking way to run a world. But one very compatible with our simian social organizing. Or to put it another way, why should someone who is (arguably) producing most of the value have to stand for getting rich slowly, when the clueless middle managers fail upwards into nicer cars & long vacations, and sociopaths -- who seem to spend most of their "workday" jockeying for position, power, & prestige rather than doing useful things -- get 6, 7, 8 figure salaries & giant stock options? The real crime is that the productive, competent people are encouraged & incentivized to coast because of the ludicrousness of the system. Sounds objectively like a bad bargain to me. So much so that those productive losers should start a company & try to keep the sociopaths out. in fact, if you buy that web -> lower barriers to entry -> less need for predatory sociopathic apes. They'll always try to get in, but that's another story...
- jwesley 17y ago
- incandenza 17y agoThis is a pretty amazing analysis. I think a lot of really talented engineers in Silicon Valley fit into a kind of hybrid category I might call 'loser with sociopathic tendencies' (gotta love these terms--hey, I didn't invent them, I'm just following the article). Although they deliberately choose to remain at the 'loser' level in terms of the org chart, they have a 'sociopathic' level of awareness of how the business operates (maybe from being an early employee or founder of previous startups). They're never truly comfortable at the 'loser' level, but maybe not willing or capable of making a move to the 'sociopath' level, and consciously avoid the 'clueless' level (which I think they eventually enter anyway, even if they avoid becoming managers, by entering some kind of 'emeritus' engineering position). The article suggests that Toby might be in this category, which I didn't think fit at first, but maybe it does--this type of person seemed to me to generally be laconic, cultivated a high degree of irony about the nature of the organization and their role within it, and usually carried an 'escape plan' as a prominent part of their mental outlook (based on either past actual or future fantasized stock option earnings) --all quite similar to the Toby character. I also think there's a type of person who views anyone at the 'sociopath' level as being inherently morally corrupt, and therefore preemptively excludes him/herself from ever reaching that level, even if they'd otherwise be capable of it. I don't think this is a correct view; the 'sociopath' type may just be the type of person who is more willing to face the full reality of how the business is run and make tough decisions that involve firing and so on. For example, even in the show I don't think the David Wallace character is portrayed as being particularly corrupt. Ryan, on the other hand, is purely selfish and greedy for power--but this actually causes him to fail at the higher levels (which I think often happens in real life as well). (By the way, in case it's not obvious, I'm trying to use these terms in the sense they're defined in the article--I don't mean them to be truly pejorative to anyone operating at any of these levels.)
- ajju 17y agoI have never read a more apt description of large organizations or a better deconstruction of a tv show. The author should turn his incisive intellect onto startups next (although I don't know of any "The Office" like shows to aid his analysis)
- philwelch 17y agoThere was actually a story arc in The Office where Michael gets fired and founds a competitor. All the normal dynamics are upset--Michael is freed from the role of the clueless middle manager and manages to put his sales skills to use, Pam elevates herself to a sales position, and the now disgraced, out-of-the-industry Ryan seizes the opportunity to get back into the game.
- keeptrying 17y agoThis is just the most amazingly accurate description of working in a corporation that I have ever read. This is mindblowing. Simply amazing. The one thing that I think he may have missed is that people do go from clueless-loser to checked-out loser. Amazing amazing amazing. I've been aware of this for a long time as I do work in a BigCorp but I've never seen it written down so well. Amazing.
- keeptrying 17y agoI bought the guy a coffee too. Amazing. I wish my command of the english language was half as good as this guys. I'm really gushing here. I just cant get over this post. Wow.
- Harj 17y agoi've never felt as happy about not working in a large organization as when i finished reading this
- gamble 17y ago"The simple reason is that if you over-perform at the loser level, it is clear that you are an idiot. You’ve already made a bad bargain, and now you’re delivering more value than you need to, making your bargain even worse." I'm surprised this post is so popular on HN. Isn't working for a startup - pouring your time into someone else's company for below-market wages and some piddly fraction of a percent in equity - basically the definition of cluelessness, according to the author?
- strlen 17y agoThe article handles the case of people who derive a meaning from outside of their work and the people who are looking for financial success and power/status within a corporation. As I've mentioned in a previous comment, the article doesn't take into account the fact that there are people who a) look for a meaning that isn't centered around money or power b) derive it from their work If you're an engineer working for a start-up (taking a below market wage, working long hours, so on) only because you are hoping for a large pay day, then you are a fool. If you're working for a start-up because you enjoy programming or because you're looking to learn what it takes to run your own start-up then you can get a lot of a start-up so the equation doesn't apply. On the topics of start-ups and money, Paul Buchheit said best: http://paulbuchheit.blogspot.com/2007/12/is-there-more-to-life-than-money.html http://paulbuchheit.blogspot.com/2007/12/is-there-more-to-li...
- bd 17y agoI think the author has these options covered: - If you do it because you enjoy it, then you are, by article's definition, a "loser" (in terms of potential monetary gains) [1]. - If you do it in order to learn about running your own startup, then you are "sociopath-in-training" (ala Ryan from The Office). And that's it. The author doesn't claim you cannot have happy and meaningful life as "loser" (by his definition), deriving pleasure from the work itself. He just tells that for "losers" somebody else will reap a significant part of the monetary reward for the value that their work creates. ----- [1] Similar principle works for "sexy" jobs - that's why poor game developers get abused so much.
- netsp 17y agoDarwin has contributed so richly to our metaphysical vocabulary.
- eru 17y agoI guess he just replaced other phrases. And Lamarck could have done the word trick just as well.
- netsp 17y agoI'm using Darwin to mean Evolution by Natural Selection. Perhaps Lamark. I honestly know very little about Lamark, but my understanding is that his theories didn't turn out to be very strong. Interestingly, even if they don't describe biology important ideas metaphysics. I don't think so. Darwinian evolution is not just a description of a natural process. It is a powerful metaphysical principle. IE, Darwinism could happily exist in theory, without any physical form. It just happens to have a physical form, biology. But this fact is the reason that it has had such an impact on our vocabulary. People that have used Darwinian-like thought before can apply it elsewhere. This kind of analysis draws a lot from that. I think there are few philosophical principles that have this power. I cannot think of a many pieces of philosophical work with this kind of an impact.
- allenbrunson 17y agoi tried to read this, since so many of you seem to like it. i couldn't make myself read more than two or three paragraphs before i had to give up. i am really surprised this is popular amongst this particular group of entrepreneurs. i think if you have to put this level of thought into how crappy your workplace is, you should have quit years ago.
- alecco 17y agoA great movie on corporate darwinism: The Method (2005) Spain/Argentina http://www.imdb.com/title/tt0427582/
- known 17y agoYou weren't meant to have a boss http://paulgraham.com/boss.html http://paulgraham.com/boss.html