You don't get paid based on your work done
Think about how much you get paid. What your salary is, what your bonuses and bonuses are. On what basis are you earning exactly that much? Perhaps your education or seniority helps you? Maybe experience, or the overall performance of the company you work for. Maybe your salary would be based on the cost of living in your city. Or on how you handle your own work?
Many workers argue that for them the most important factor is individual performance
But what if we start talking about how do we measure that factor, because that's mostly what people in management positions do. And for the most part, and for them, the most important pay factor is the individual employee's productivity.
The belief that the quality of your work performed is the primary and decisive factor deeply affirms the sense of individualism inherent in American culture. Thus, ordinary workers tend to look for the cause of their own economic failure or success solely in themselves, rather than in the more global economic or political realms.
Is this true?
Not really. We can identify some wage myths that are quite common among working people and affect their perceptions of their own wages. All of these myths have a serious impact on wage inequality and inequity.
1. You will be able to separate your contribution to the work process from another
It is often quite difficult to measure a person's individual contribution to the work process. In some professions, like salespeople, it's not so hard. We simply measure the number of customers served and from that we calculate the salary the person should receive. But what if the work process depends on the coordinated work of a large team, when the limits of individual contribution are blurred.
Today there are really a large number of jobs selling an invisible product: consultants, managers, marketers. The measure often does not exist, or it is almost impossible and impractical to calculate.
2. In your job it is possible to measure productivity objectively
Sometimes it's hard to define even a clear task and the final product of your work. In that case it is not possible to distinguish between good or bad performance at all.
Let's take work in a scientific community as an example. Often, their salary depends on the number of students in the group and allocated grants for a particular professor. But often professors give extra classes to underperforming students to make them graduates, or they publish their own articles in various journals, for example. In that case, their extra work will not be paid in any way, and that would not be entirely fair.
Even if we can still identify the key success factors and measure performance, it won't always lead to good consequences. It can often lead to abuse and to cheating the firm's clients for profit, even if potentially the employee does make money for the firm, but it can seriously damage the company's reputation and lead to litigation in the future.
In the end, we come to the conclusion that it is impossible to truly define "good work. Productivity involves different trade-offs of different ways of doing work.
3. paying for individual performance will improve company performance
Rarely will we see a job in which one employee works separately from the rest, in complete isolation, on a product and sends it up the chain of organization after completion. In fact, each employee is on the same team where they can learn from each other, help their colleagues, and find new methods to do the job successfully. This interaction will have a positive impact on the results of each individual employee.
Why, though, do few companies come up with individual measures of accomplishment? Because it can often lead not only to good competition, but also to unhealthy animosity, sabotage, and a sense of being underpaid.
Employees may begin to refuse to help their co-workers because they will realize that instead of doing their job, they are wasting time helping and prompting their co-workers. The reward system will only work for one employee, and it is almost impossible to construct it so that it objectively evaluates employees' successful cooperative interactions. Employees will start poaching clients from each other, which will lead to chaos in general, and will force colleagues to constantly "go over their heads.
What ultimately determines our salaries
To begin with, we must understand that wage determination is a prerogative of the government. The authorities can settle issues and various claims related to the division of the common pie. Organizational inertia also seriously affects the course of wage determination. Once a wage has been determined in an organization, it is unlikely to change dramatically.
Mimicry is when a company simply borrows salaries from other companies. This way we can study our competitors, understand how we can attract more qualified workers to our organization, and sort out all the issues related to the unfairness of a certain wage. In any case, it is a good idea not to just copy the salaries, but to make our own bonuses/benefits/changes based on the specifications of your company. Don't forget that norms tend to change (at least because of inflation), so remember to adjust to the market so that workers are always motivated and don't feel unfair. In many organizations, it is even forbidden to find out the salaries of your colleagues to avoid questions about unfairness and inequality.
Discovering such basic metrics will help us understand why wages vary by general criteria. Of course, individual performance is still important, and if an employee absolutely can't do their job, then their salary should be at zero. But when we have a certain group of people in which everyone knows their job, then other factors intervene, each of which affects wages in its own way.
In the last few decades, the economy has changed, and as a result, certain groups of people have gotten serious advantages and good money at the expense of a few. Can we say that every billionaire's dollar was made at the expense of hard work, while millions of ordinary hardworking Americans have low wages because they don't work well enough and have low job performance? Attempts to correct such injustices have often turned out to be utterly foolish, based on false economic models.
But we can hope for the best, since wages are not something permanent. It has a way of changing, and it is because of this that we can hope that the process of enriching some at the expense of others can be reversed and people will actually begin to receive fair wages.
If we want to build a fair economic system, we need to make some adjustments to the existing system: raise the minimum wage, increase the average wage, and lower the ceiling. An increased minimum wage should allow ordinary workers to feed themselves and live at least minimally comfortably. An increase in the average wage would make it possible to revive organizations that fight for workers' rights (trade unions). At the moment such organizations are being suppressed and are not even given the opportunity to revive and fight for workers' rights. If we lower the wage ceiling, then excessive bonuses and cash payments for the already privileged classes will be reduced. The most sensible option would be to raise tax rates (e.g., capital gains).
All in all, these steps would provide a working version of a fair economy for most working Americans.
Was this article helpful?4 Posted by: 👨 Brian C. Clark